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OpenAI fired CEO on way back. Microsoft!

Never forget the "golden rule"..." he who has the gold makes the rules"...which would be Microsoft. When the dust settles Microsoft will have a seat on the four-member board, and will likely get one or more other board members canned and replaced with folks more to their liking. BAM


BTW: Of the approx 770 employees at the firm, more than 730 signed a letter indicating they'd quit if Sam wasn't reinstated as CEI and the board got canned.


NEWS FLASH: He's officially back! Happened seconds ago. Spritzler news was with Sam in his living room when he got the news. We gave him a big hug.


PS. Larry Summers and ex Salesforce CEO Bret Taylor join board. Board now expands from 4 to 6 members. More dets (link below).



Sam Altman, OpenAI Board Open Talks to Negotiate His Possible Return

Negotiations center on Altman’s reinstatement as CEO

CEO Shear has asked board for proof of Altman wrongdoing


Most of OpenAI Staff Threaten to Quit Over Altman Exit

By Edward Ludlow, Emily Chang, and Ashlee Vance

November 21, 2023


Sam Altman, members of the OpenAI board and the company’s interim chief executive officer have opened negotiations aimed at a possible reinstatement of the ousted CEO at the artificial intelligence startup he co-founded, according to people with knowledge of the matter.


Discussions are happening between Altman, CEO Emmett Shear and at least one board member, Adam D’Angelo, said the people, who asked not to be identified because the deliberations are private and they may not come to fruition. The talks also involve some of OpenAI’s investors, many of whom are pushing for his reinstatement, one of the people said.


If Altman returns, it would be as CEO of the company, according to one person. In one scenario being discussed, Altman would become a director on a transitional board, one of the people said. Former Salesforce Inc. co-CEO Bret Taylor could also serve as a director on a new board, multiple people said.


That the board and Altman are in communication is a significant development because until Monday, the directors largely refused to engage with the executive they fired Friday, several people have said.


OpenAI shareholders angling for Altman’s reinstatement include Thrive Capital, Khosla Ventures and Tiger Global Management, people with knowledge of the matter told Bloomberg. Prominent venture capital firm Sequoia Capital is working alongside the group, another person said.


On Monday, the company’s Vice President of Global Affairs Anna Makanju sent a memo to staff saying the company had been in “intense discussions” with the board, Altman and Shear to unify the company. The message came after the majority of employees threatened to quit if Altman were not reinstated, among other demands.


There is a push to resolve the chaos surrounding the company’s leadership before Thanksgiving, said one person, in the hope that employees don’t spend the holiday with uncertainty looming about the state of their jobs.


WATCH: Sam Altman and members of the OpenAI board have opened negotiations.

The board has come under intense scrutiny for its decision to fire Altman, saying that the CEO was not “consistently candid in his communications.” In the days since, board members and staffers have said that the CEO’s removal was unrelated to “malfeasance” or “safety,” leaving an information vacuum. Satya Nadella, CEO of OpenAI’s largest investor Microsoft Corp., has said publicly that he has been given no explanation.


What Bloomberg Intelligence Says

“A potential return of Sam Altman as OpenAI’s CEO will likely strengthen Microsoft’s strategic positioning, especially if it’s able to procure a seat on the new board. This could also be the preferred outcome for Microsoft, given a high legal risk if it hires a majority of OpenAI employees. We see little to no likelihood that Microsoft will buy OpenAI amid ongoing regulatory hurdles.

— Anurag Rana and Andrew Girard, analysts


Even CEO Shear has been left in the dark, according to people familiar with the matter. He has told people close to OpenAI that he doesn’t plan to stick around if the board can’t clearly communicate to him in writing its reasoning for Altman’s sudden firing.

Until Friday, the company’s board consisted of Altman, President Greg Brockman, Chief Scientist Ilya Sutskever, Quora Inc. CEO D’Angelo, tech entrepreneur Tasha McCauley and Helen Toner, director of strategy at Georgetown’s Center for Security and Emerging Technology. After Altman’s exit, Brockman left the company in protest.


In his negotiations with the board, Altman is being represented by Airbnb Inc. CEO Brian Chesky, while Shear is representing D’Angelo and the board, people with knowledge of the matter said. Taylor, who also served as a board member at Twitter before it was bought by Elon Musk, is playing more of a neutral role in mediations, the people said.

OpenAI declined to comment on the negotiations.


— With assistance from Shirin Ghaffary and Katie Roof


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.”


ONE ALT THING

Quartz AI reporter Michelle Cheng considers another reason OpenAI staffers rebuked their onetime CEO’s ouster: As a leader, Sam Altman cultivates a loyal following.

In his time at tech accelerator Y Combinator, for one, Altman became a mentor to other startup founders, some who would follow him to OpenAI. Plus, Cheng observes, he’s been an effective public-facing representative of their work.


“His outreach to regulators and world leaders has been well-received,” she writes, “earning him a reputation of friendliness and cooperativeness that has eluded other big tech leaders like Mark Zuckerberg and Elon Musk.”


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