Summary Bullets:
• Sam Altman, former CEO of OpenAI, was ousted by the company’s board and now works for Microsoft, where he will head a new AI research unit.
• Emmett Shear, former CEO of game-streaming platform Twitch, has been appointed as CEO of OpenAI after the defection of swaths of employees.
It would be an understatement to say that the events surrounding Sam Altman’s dismissal as CEO of OpenAI during the weekend came as a surprise. The shocking news left Silicon Valley and the tech world at large reeling, and the timing (on a Friday evening) meant only mainstream outlets were covering the news on Saturday, with much of the specialist trade press caught unawares. By Monday morning, and in classical GenAI fashion, several light years had gone by: Sam Altman was employed again, only to head a new specialized AI research team at Microsoft, and CEO Satya Nadella had announced on X that Altman, together with other defecting colleagues at OpenAI, was joining Microsoft to lead a new advanced AI unit. Microsoft’s Nadella added: “We look forward to moving quickly to provide them with the resources needed for their success”. No kidding.
It all started on Friday as some of us were blissfully getting ready for the weekend ahead. The OpenAI board dismissed then-CEO Sam Altman, allegedly because he hadn’t been “consistently candid in his communications with the board.” Although the statement didn’t specify the reasons for the breakdown in communications, it was rumored that it could have been Altman’s penchant for pursuing outside interests such as the controversial eyeball-scanning company Worldcoin. There is also the possibility that during the weeks leading up to Altman’s ousting, internal divisions on the safety implications of the rapid pace of rolling out GenAI technologies had escalated.
Regardless, the dramatic ousting of Altman resulted in a chain of events that saw co-founder and president Greg Brockman immediately quitting and Mira Murati, formerly the chief technology officer at OpenAI, being appointed interim CEO on Saturday. Murati, who worked for Tesla before joining OpenAI, was one of several top brass employees at OpenAI expressing public support for Altman on Saturday, and rumors that she was planning to reinstate Altman reached fever pitch when he posted a photograph brandishing an OpenAI corporate badge on social media on Sunday. Cue Monday morning, with the company rushing to contain the situation, and naming Emmett Shear, former CEO of video-streaming platform Twitch, as the new CEO of OpenAI. Shear’s appointment means that at present, Ilya Sutskever is the only remaining co-founder on OpenAI’s board.
The events have highlighted the unusual legal structure of OpenAI (please see Generative AI Watch In Focus: Large Language Models, August 28, 2023 for more details), which was founded in 2015 as a non-profit company and adopted a new structure in 2019, following Microsoft’s involvement and financial backing. OpenAI is controlled by its non-profit board, which has no fiduciary obligations toward stakeholders or investors. The company, which recently held its first developer conference with a slew of announcements including GPT-4 Turbo with Vision and Dall-E 3 API, also attracted headlines (please see GlobalData’s report Generative AI Newsletter Q4 2023) when it started talks with investors to seek a valuation of $86 billion, an unusually high figure for a startup with a history of low revenue sales.
It will be interesting to watch how OpenAI, arguably the most high-profile AI company in the world, fares after the rushed ousting of its famous, and occasionally controversial, former CEO. The departure of other senior employees, including the possible defection of Murati in the coming days or weeks, means that the financial backing from Microsoft may dry up, but also that OpenAI will now be free to pursue its own vision. But at what cost, with hundreds of employees having signed a letter threatening to resign? And what will be the implications for other key players as well as for the industry at large? Will this herald a new era of tighter safety guardrails or quite the opposite? Will it accelerate or thwart the development of the technology? Exciting times ahead.