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OpenAI Employees Threaten to Quit Unless Board Resigns

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OpenAI Employees Threaten to Quit Unless Board Resigns

More than 700 OpenAI workers, including a board member, demand the reinstatement of ousted CEO Sam Altman

By Keach Hagey, Deepa Seetharaman and Berber Jin, WSJ

Updated Nov. 20, 2023

More than 700 OpenAI employees have demanded that former CEO Sam Altman be reinstated after the company’s board fired him on Friday.

The future of iconic startup OpenAI was in jeopardy Monday, as the vast majority of employees threatened to quit if the board that fired its CEO, Sam Altman, didn’t resign itself and restore him to power.

At the same time, it seemed like a demand that might have arrived too late. Microsoft said late Sunday that it was hiring Altman and Greg Brockman, OpenAI’s president who resigned in protest after Altman was ousted, and was opening its doors to more joining from the company behind viral chatbot ChatGPT.

The OpenAI board also found someone else to take Altman’s spot, former Twitch CEO Emmett Shear.

More than 700 employees of OpenAI have threatened to leave the company in a letter to the board of directors. Among the signees was Ilya Sutskever, the company’s chief scientist and one of the members of the four-person board that voted to oust Altman. OpenAI currently has about 770 workers.

OpenAI is governed by a nonprofit with a board devoted to advancing artificial intelligence for humanity’s benefit over profits. By that measure, the board acted as it was designed and ethically obliged to do, people familiar with the board’s thinking said.

One factor driving the board’s decision last week to oust Altman was a lack of clarity around Altman’s pursuits outside of OpenAI and whether there was a risk that OpenAI’s intellectual property could be used in ways that made the board uncomfortable, the people said. Further details couldn’t be learned.

In the months leading up to his dismissal, Altman had been spending more and more time exploring two new business endeavors. The first was a new consumer hardware device that he would create with Apple’s former chief design officer, Jony Ive. The second was a new startup that created low-cost chips that OpenAI could use to train its AI models. Altman had spent weeks in the Middle East trying to raise money for this second endeavor.

This is also not the first time Altman has been asked to depart a company. A few years ago, senior leaders at Y Combinator, the venture firm Altman used to run, also asked Altman to leave his role as president following mounting concerns about the time he was spending on other business endeavors, including at OpenAI, The Wall Street Journal reported Sunday.

Microsoft said late Sunday that it hired Altman and Brockman to helm a new advanced artificial-intelligence research team. The move came after Altman’s bid to return to the company he co-founded fell apart, with the board that fired him declining to agree to the proposed terms of his reinstatement.

The employees said in their letter they may leave the company and join Altman and Brockman at Microsoft if their demands aren’t met, adding that Microsoft had assured them that there would be jobs available for all of them. Microsoft has invested $13 billion in OpenAI.

OpenAI had been in talks to complete a sale of employee shares with outside investors that would have roughly tripled the stock’s value to almost $90 billion from earlier this year.

Despite the company’s nonprofit roots, many OpenAI employees were Silicon Valley engineers and researchers who were attracted to the vast financial upside offered by working at a startup, and some negotiated salaries in the millions of dollars. That upside could be vastly diminished should they work for Microsoft.

The abrupt firing of Altman has paused the share sale, which was first reported by the Journal in September. Many investors purchasing the shares from employees were attracted to Altman’s business acumen and vision, and are balking at investing more in OpenAI without him at the helm. Earlier in the year, investors including Thrive Capital and Founders Fund had purchased shares at a valuation a little under $30 billion.

On Monday morning, Sutskever posted on X trying to repair the damage.

“I deeply regret my participation in the board’s actions,” he wrote. “I never intended to harm OpenAI. I love everything we’ve built together and I will do everything I can to reunite the company.”

Members of the OpenAI board, left to right: Adam D'Angelo, Helen Toner, Ilya Sutskever and Tasha McCauley.

In addition to Sutskever, OpenAI’s board consists of Adam D’Angelo, a former Facebook executive and the founder of the question-and-answer website Quora; Tasha McCauley, an adjunct senior management scientist at Rand, and Helen Toner, a director at a Washington nonprofit.

During intense negotiations Sunday, Altman and his supporters pressed for a new board, floating names including Bret Taylor, the former co-CEO of Salesforce; Brian Chesky, the CEO of Airbnb and a longtime confidant of Altman’s; and Laurene Powell Jobs, founder and president of Emerson Collective, people familiar with the matter said.

The employee letter also demanded the addition of two independent board members, such as Taylor and Will Hurd. Hurd, a former Texas congressman, left OpenAI’s board earlier this year.

In their letter, the employees said senior leadership at OpenAI attempted to listen to the board’s concern and cooperate with them.

“Despite many requests for specific facts for your allegations, you have never provided any written evidence,” the employees wrote. OpenAI’s leadership team “also increasingly realized you were not capable of carrying out your duties, and were negotiating in bad faith.”

On Sunday, a person familiar with the board stood by the board’s Friday statement citing Altman’s lack of candor, the Journal reported then. This person said there was no single precipitating incident but rather a mounting loss of trust over communications with Altman that led it to remove him as CEO. The person declined to offer examples.

The new OpenAI chief, Shear, said in a post on X early Monday that he had accepted the job and would hire an independent investigator to generate a report on events leading to the upheaval at OpenAI.

“It’s clear that the process and communications around Sam’s removal has been handled very badly, which has seriously damaged our trust,” Shear said, adding he would push strongly for significant governance changes if necessary.

Altman was at OpenAI’s San Francisco office Sunday trying to negotiate his return. He had told friends that he would only consider returning if the board that fired him was completely gone. Ultimately, that insistence doomed his counter-rebellion, people familiar with the matter said.

Despite pressure from investors, including Microsoft and venture-capital firm Thrive Capital, the board members fended off their attempts to reinstate Altman, empowered by an unusual corporate structure that gave them more power than investors that poured billions into the AI company.

Altman was shocked by OpenAI’s decision, previously feeling confident he would be able to return to the company, according to a person familiar with his thinking.

Microsoft CEO Satya Nadella, in his X post announcing the hire of Altman and Brockman, said that Microsoft was committed to its partnership with OpenAI and that it would move quickly to provide the two men with “the resources needed for their success.”

“The mission continues,” Altman wrote on X, reposting Nadella’s message.

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