After being forced out of one of the most valuable private companies in the world, Sam Altman is back as the leader of OpenAI in less than five days. The company announced that Sam Altman was restored as OpenAI’s chief executive late Tuesday this week, successfully undoing his removal by OpenAI’s board last week Friday after a campaign led by his supporters, staff and investors. Along with Sam, Greg Brockman is also back as the President of OpenAI. He had resigned in solidarity with Sam. The return of Sam and Greg brings order to OpenAI, one of the world’s most prominent artificial intelligence companies and the creator of ChatGPT chatbot, which was thrown into disarray by a tumultuous five-day turmoil.
Almost all of OpenAI’s roughly 770-person staff threatened to join Microsoft if the former CEO was not brought back at the helm. The reasons for Altman’s departure were not clear, as board members and employees denied any involvement of “wrongdoing” or “safety” issues, creating an information void.
The past week has been like a drama movie, but there are many things that need to be mended: the board’s composition (fix initiated), the employee confidence, the capped-profit vs. non-profit status, and the strained relationship with Microsoft are all critical factors as the company embarks on its next phase.
The board of directors is rightfully being restructured, removing several members who had ousted Sam Altman. The only remaining member of the existing board will be Adam D’Angelo, the chief executive of Quora. OpenAI made this announcement in a post on X. OpenAI termed the revamped board as “a new initial board,” signaling that more changes are in the offing to the board composition. The newly-added two board of directors are Bret Taylor (an early Facebook officer and former co-chief executive of Salesforce) and Lawrence Summers (the former Treasury secretary and former President of Harvard University). Adam D’Angelo (a current board member and chief executive of Quora) will continue to serve on the board and act as its chairman. It’s clear that the board’s composition is likely going to shift from researchers and scientists to public service officials, corporate executives, and investors – in line with a typical board of an AI startup.
Sam Altman expressed his optimism in his post on X, “I love OpenAI, and everything I’ve done over the past few days has been in service of keeping this team and its mission together. When I decided to join MSFT on Sunday evening, it was clear that was the best path for me and the team. With the new board and with Satya’s support, I’m looking forward to returning to OpenAI and building on our strong partnership with MSFT.” Microsoft is the biggest investor in OpenAI, having pumped approximately $13 Billion into the world’s highest-valued AI startup.
Microsoft CEO Satya Nadella has been the kingmaker behind the scenes during the 5 days of unprecedented frenzy at OpenAI. He openly supported the reinstatement of Sam and Greg and the revamping of the Board when he posted on X, “We are encouraged by the changes to the OpenAI board. We believe this is the first essential step toward more stable, well-informed, and effective governance. Sam, Greg, and I have talked and agreed they have a key role to play along with the OAI leadership team in ensuring OAI continues to thrive and build on its mission. We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners.”
While it all sounds hunky dory at the end of the saga, there is work to be done at OpenAI. Sam and Greg being back at the helm brings normalcy back and ends the era of instability that plagued the company for almost a week. But some fundamental cracks need to be repaired. The board governance structure needs a refresh. The first step has been taken by replacing the current board with a new initial board, but it is clear that more board members need to be added to augment the ease of decision-making in such a complex organization. There is still no board representation from Microsoft and other investors, as well as from the company’s founders. Secondly, the complex corporate structure of blending a capped for-profit entity under a non-profit has triggered questions and sparked confusion in the minds of outsiders. The perception of an organization maneuvering the thin demarcation between driving a mission while maximizing shareholder returns via profits is akin to tightroping a line of fire, to say the least. This funambulism, while it seems tricky in perception to tread, has given OpenAI the AI leadership status it has achieved. Thirdly, the employee morale and focus must have taken a short-term dip due to the distractions caused by the OpenAI saga. Employees seem relieved now to see their favorite leadership back at home. Fourthly but most importantly, OpenAI’s relationship with Microsoft needs to be managed more carefully. I am sure Satya Nadella is pondering how to prevent his biggest AI bet from being catapulted into a risk trajectory again by the board’s naive decision-making. Lastly, there have been concerns about a conflict of interest for the board member Adam D’Angelo since his company, Quora, runs a product called Poe, a question-and-answer service seemingly in competition with ChatGPT. He is also one of four OpenAI’s earlier board members who voted to fire Sam Altman and demote Greg Brockman.
Amidst all these lingering questions, Sam Altman has emerged stronger as a CEO and a leader with overwhelming support from his loyal employee base. Sam has the opportunity to usher in an OpenAI 2.0 era, which can further turbocharge the meteoric rise of its product adoption trajectory. Time will answer the questions and angle out the trajectory’s slope, but it’s crystal clear that OpenAI will continue to maintain its AI leadership spot for the foreseeable future and even venture beyond software into AI-based hardware products. As Greg Brockman posted on X, “We are so back.”
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