OpenAI, the company behind ChatGPT, ousted its CEO and co-founder, Sam Altman, on Friday afternoon. By Saturday, Altman had entered into negotiations with the board to potentially return to the company.
The condition of his return was the board absolving Altman of wrongdoing, something that could have opened the board to liability.
As of Sunday night, the negotiations had collapsed and the board hired former Twitch boss Emmett Shear to step in as interim CEO.
And Microsoft (MSFT) -), whose $13 billion investment in OpenAI amounts to a 49% stake in the company, hired Altman — in addition to an unspecified number of his colleagues — to lead an advanced AI-research team at Microsoft.
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"The mission continues," Altman wrote in a post on X.
The ouster, according to a company statement on Friday, followed a "deliberative review process by the board," which found that Altman had not been "consistently candid in his communications with the board, hindering its ability to exercise its responsibilities."
Neither the company nor any of the people involved have yet to elaborate on Altman's candor or lack there of. The company on Friday declined to comment.
OpenAI got its start in 2015 as a nonprofit research lab but was restructured into a hybridized "capped profit" company in 2019, after co-founder Elon Musk left. Within the structure of the current company, the nonprofit board — which fired Altman — controls the for-profit subsidiary.
"The nonprofit’s principal beneficiary is humanity, not OpenAI investors," the company said in June. Each director on the board must adhere to the board's mission: the safe creation of artificial general intelligence, AI that possesses human-level intelligence.
As part of this arrangement, Altman does not hold equity directly in the company. It is up to the board to decide when the company has created AGI.
"No one person should be trusted, here," Altman said in June. "The board can fire me and that's important."
Related: OpenAI CEO Sam Altman says that ChatGPT is not the way to superintelligence
Big Tech behind closed doors
Even as Altman moves into his new position as the CEO of Microsoft's new AI group, a partnership Microsoft Chief Satya Nadella likened to the company's relationship with GitHub, Mojang Studios and LinkedIn, questions linger about the true cause of the ouster and the implications for AI safety that might have.
An AI expert, Gary Marcus, said that the board's decision to remove Altman was a "Hail Mary." The board, knowing the decision would be intensely unpopular, must have "seen danger in something" Altman was doing.
OpenAI's co-founder and chief scientist, Ilya Sutskever, told staff, according to The Information, that he and the other three board members stood by their decision to remove Altman as the "only path" to defend the company's mission. He reportedly said that Altman's behavior undermined the board's ability to supervise the company's development of AI.
Sutskever has since said in a Monday morning statement on X that he deeply regrets his "participation in the board's actions. I never intended to harm OpenAI. I love everything we've built together and I will do everything I can to reunite the company."
As of Monday morning, 505 of the company's 700 employees, including Sutskever, called on the board to resign, in a letter that contends that the board has yet to provide any evidence for its allegations against Altman.
Marcus said Sunday that the result of the saga is that the financially interested stakeholders will "emerge victorious," something Microsoft's position indicates.
"The tail thus appears to have wagged the dog — potentially imperiling the original mission, if there was any substance at all to the Board’s concerns," Marcus wrote. "If you think that OpenAI has a shot, eventually, at AGI, none of this bodes particularly well."
"Three orgs filled with brilliant minds tried to create AI independently of the tech giants, and all three have been subverted," he said.
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The Elon Musk of it all
Marcus's perspective is one that Musk, who co-founded OpenAI and recently started his own challenger, xAI, agrees with.
"I am very worried," Musk wrote in a post Sunday. "Ilya has a good moral compass and does not seek power. He would not take such drastic action unless he felt it was absolutely necessary."
Musk reiterated in several additional posts that it is "very important for the public to know why the board felt so strongly about their actions."
"If it was a matter of AI safety, that would affect all of Earth," he said.
Musk and Altman both have touted their fears of the extinction-level risks of an out-of-control superintelligent AI, fears that several prominent AI researchers have dismissed as lacking a legitimate scientific basis.
"I disagree with him on many points but he was definitely ahead of the curve on this one," Marcus said of Musk.
Ryan Greene, a member of OpenAI's technical staff, wrote in a post on X that he has "great respect for Ilya, and trust in his intentions. But I can't comprehend the lack of transparency in his decision."
Shear said in a statement that he "checked the reasoning behind" the board's decision to oust Altman before taking the job.
"The board did *not* remove Sam over any specific disagreement on safety, their reasoning was completely different from that," he said. "I'm not crazy enough to take this job without board support for commercializing our awesome models."
Related: Tesla chief Elon Musk targets Google, Microsoft and Sam Altman with latest AI move
Wall Street and Big Tech
While the result of the saga at OpenAI has some researchers, like Marcus, concerned about the future of AI safety and independent AI research, it has investors and analysts excited.
The board at OpenAI was "at the kid's poker table and thought they won until Nadella and Microsoft took this all over in a poker move for the ages," Wedbush analyst Dan Ives wrote, referring to MSFT's CEO, Satya Nadella.
Ives added that Microsoft is now in a "stronger AI position than before."
Shares of Microsoft at last check ticked up 1.5% to above $375. The company, up more than 50% for the year, is fast-approaching a $3 trillion market cap.
Nadella said in a statement that Microsoft remains committed to its partnership with OpenAI and has "confidence" in the company's product roadmap.
Deepwater's Gene Munster said that while Microsoft snagging Altman is a "win" for the company, the motion of talent at OpenAI represents a "huge opportunity" for competitors like Google (GOOGL) -) and Apple (AAPL) -).
The key, he said, is how many OpenAI employees will be moving to Microsoft.
"This is the biggest jump ball for paradigm-shifting tech talent," Munster wrote. "This is a great example of the power of 1-in-a-billion founder. These founders are the soul of the company and have more power than the boards."
Related: Meet Sam Altman, the man behind OpenAI's revolutionary ChatGPT
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