By Gabriela Riccardi, Quartz Media
Nov 22, 2023
The last five days have marked the corporate coup heard around the business world—the coup, of course, being the surprise shakeup at near-$100 billion startup OpenAI, developer of ChatGPT.
But which of the coups, one might wonder, was the coup to topple them all? Was it the board’s, for overthrowing its chief executive and president in service of responsibly slowing down AI development? Was it the company’s remaining leadership, for making convincing calls to bring back their chief? Was it Microsoft’s, for power-grabbing the globe’s most visible AI leader to helm its own GPT division? Or was it Sam Altman’s, for managing to rally much of the public to his cause before ultimately securing his return as CEO late last night?
The story is still unspooling. If you’re already up to date on the AI company’s rapid unraveling, feel free to skip ahead. On Friday afternoon, OpenAI’s corporate board made a shock announcement: CEO Sam Altman, along with president Greg Brockman, was fired. The news came as a surprise to just about everyone, no less than the company’s own investors. Microsoft’s $10 billion commitment to OpenAI, apparently, afforded it a mere one-minute notice before the news went public.
What followed was a weekend whirling with negotiations. Altman returned to the offices, guest badge in tow, to negotiate a potential return; instead, the board elevated a new CEO in former Twitch chief executive Emmett Shear. By Monday morning, Microsoft CEO Satya Nadella announced Altman would lead a new advanced AI research team—and that any OpenAI employee who wanted to follow had a job waiting for them at Microsoft. But negotiations continued, and last night in San Francisco the company announced Altman would be reinstated at OpenAI’s top spot—while most of the board members would be replaced.
The former board, for its part, has become the helipad for critiques of how to not steer a major decision (like, say, firing your top leaders without providing a precise explanation why). But although OpenAI’s five-day tangle of coups is a cautionary tale in corporate leadership, the story also contains an admirable B-plot: how its employees responded.
While Altman and other chief leaders took talks to the boardroom, OpenAI staffers began an advocacy campaign. Staffers reportedly refused to join a Sunday all-hands meeting with new CEO Shear. They’ve also signaled their support on social media thorough (coded) messages. “OpenAI is nothing without its people,” scores of employees wrote in individual tweets, flash-interim CEO Mira Murati included. More quoted each other with heart emojis, reportedly a symbol of staffers who would follow Altman where he lands.
But they made an overt gesture, too: More than 730 of OpenAI’s roughly 770 employees also signed a public letter saying they might quit and join Sam Altman at Microsoft unless the board put their former CEO back in place—and resigned.
Some of those staffers are even willing to risk their working rights for the cause. “I am on an H-1B, in the process of getting my green card and relocating my family to the US. Me and many other colleagues in a similar situation have signed this letter,” wrote technical staffer Reiichiro Nakano. “I’m on a research visa too that I will lose if I resign,” added Boris Power, the startup’s head of applied research. “These are details - onwards with the mission! 🚀”
Since that Friday announcement, OpenAI employees have advocated as a collective—and last night in San Francisco, that advocacy succeeded.
The staff’s rapid-response organizing is striking, too, in a year when workers’ movements have risen across sectors worldwide. Now they have a place beside Hollywood writers and Swedish mechanics, Japanese retailers and Icelandic prime ministers, plus throngs of other employees challenging leaders—with care—about what they want from their workplace.
Don’t miss this part: When OpenAI’s board leadership failed, its people organized. It remains to be seen what credit will be given to their collective action—for the future of their work, and the very fate of the AI industry.
ONE LEADERSHIP DIAGNOSIS
But what else can leaders take away from the OpenAI breakup? For a searing (and succinct) analysis of how the corporate board’s support collapsed, look to one sharp-eyed executive: Marissa Mayer.
On X, the former Yahoo CEO and Google leader takes a scalpel to the news and emerges with a biopsy of where the board went wrong. Among her diagnoses:
1️⃣ The composition problem. A fundamental flaw, as Mayer and others point out, is OpenAI’s strange structure: The for-profit company is controlled by a nonprofit. The board consists of just four independent directors, and none of them has a financial stake in the company. A team of decision-makers should represent all the stakeholders—including, yes, dollars and cents.
2️⃣ The size problem. “Most companies of OpenAI’s size and consequence have boards of 8-15 directors, most of whom are independent, and all of whom ha[ve] more board experience at this scale than the 4 independent directors,” Mayer writes. Leadership teams should have a broader sweep of input—and legal advisory—before undertaking large-scale decisions.
3️⃣ The communication problem. “They call them board deliberations because you are supposed to be deliberate,” Mayer adds, pointing to how hastily the board ousted its executives. (Altman, remarkably, spoke on behalf of OpenAI at the APEC CEO Summit just a day before his firing.) “The fact that [chief scientist Ilya Sutskever, who reportedly led the firing push] now regrets it just shows how broken and underadvised they are/were.”
To date, OpenAI’s former board has reportedly given no parties—employees, investors, or the public—a precise explanation for how Altman was “not consistently candid in his communications with the board,” as it wrote in its Friday announcement.
“I’m fundamentally an AI optimist,” Mayer writes, “and realizing the structural flaws in OpenAI’s governance has given me serious pause.”