After a period of negotiations, late at night on November 21, local time, the artificial intelligence development organization OpenAI announced that it had reached an agreement in principle, and founder Sam Altman returned to the company as CEO, "and formed a new board of directors composed of Bret Taylor (Chairman), Larry Summers (Larry Summers) and Adam D'Angelo. We are working together to find out the details. Thank you very much for your patience with this."
Just over 4 days have passed since the OpenAI board of directors announced the removal of Ultraman. This "palace battle" drama has experienced reversals again and again, and the process has been ups and downs and exciting.
OpenAI co-founder and former CEO Sam Altman
OpenAI co-founder and former president Greg Brockman
OpenAI co-founder and chief scientist Ilya Sutskever
MiraMurati, CTO of OpenAI
Microsoft CEO Satya Nadella
OpenAI interim CEO Emmett Shear
Altman attended the Asia-Pacific Economic Cooperation CEO Summit in California and discussed the future of art and artists at an event in Oakland.
According to Brockman's post on X, formerly known as Twitter, Sutskwe texted Altman that night to ask about arranging a conference call at noon the next day.
Brockman said Mulati learned that night that Altman would be fired.
At noon, Altman attended the biggest party of the weekend in Las Vegas, the Formula One race. After clicking on the Google Meet link in the hotel room, Sutskwe said he would be fired and the news would be announced soon without any explanation.
Brockman said that shortly after noon on the 17th, he received a text message from Sutskwei requesting a call. After receiving the GoogleMeet link four minutes later, Brockman was informed that he would be removed as chairman of the board "but will remain critical to the company and will retain his position as president" and that Altman had been fired.
At about the same time, OpenAI published an article on its blog announcing executive changes - Altman was publicly announced as being fired for "consistent lack of candor in communications with the board of directors, which hindered the board's ability to perform its duties." Mulati was appointed interim CEO.
OpenAI held a general meeting that afternoon, at which Sutskwe defended the board's decision to oust Altman. He dismissed suggestions that ousting Ultraman amounted to a "hostile takeover" and claimed it was necessary to protect OpenAI's mission of "making artificial intelligence benefit humanity."
After the meeting, the executive team reconvened in the conference room. An executive told Sutskvi that the lack of detail in the termination announcement was unacceptable and asked other board members to participate in a video call to explain, according to people familiar with the matter. During the call, the executive team pressed the board for about 40 minutes to provide specific examples of Altman's "dishonor," which the board refused to do, citing legal reasons. Some executives said they received inquiries from regulators and law enforcement agencies such as the U.S. Attorney's Office in Manhattan about Altman's "dishonesty."
The board agreed to discuss the matter with its attorneys. They came back hours later but still wouldn't provide specifics. They say Ultraman is not honest and often does whatever he wants. The board said Altman was too well-versed in the matter for the board to give specific examples, according to people familiar with the executive. Executives requested written examples of board allegations.
Microsoft's Nadella, a major investor and partner in OpenAI, issued a statement: "As you will see this week at Microsoft Ignite conference, we will continue to innovate rapidly for this era of AI. We have made more than 100 announcements across the entire technology stack, including AI systems, models and tools in Azure (Microsoft cloud) and Copilot. Most importantly Yes, we are committed to delivering all of this to our customers while building for the future. We have a long-term agreement with OpenAI that provides full access to everything we need to deliver on our innovation agenda and exciting product roadmap, and we remain committed to our partnership, including Mira, as we work together to continue bringing the value of this technology to the world.”
Altman spoke with Nadella on the phone and said he wanted to continue working on the technology. They came up with various ways to undo the day's events, but also began developing a backup plan for Altman to have a group of his top researchers form a new division at Microsoft, according to people familiar with the matter.
After reading the latest news, Brockman announced his resignation from OpenAI. After he sent a memo internally announcing the news, he also published the text on X simultaneously.
Altman told friends he was considering starting a new company with Brockman and poaching dozens of OpenAI employees.
Following Brockman, three senior OpenAI researchers resigned, including research director Jakub Pachocki and Aleksander Madry, head of the "Get Ready" team, which prepares for the "catastrophic risks" of artificial intelligence.
Altman immediately flew back to San Francisco after being fired. His home became a war room filled with OpenAI employees, including then-interim CEO Murati and other members of the executive team, plotting his return to the company.
An internal OpenAI memo came to light, stating that Altman was fired not because of "malfeasance or anything related to our financial, business, security, or security/privacy practices," but because of "a breakdown in communication between Sam Altman and the board of directors."
In the memo, OpenAI COO Brad Lightcap said yesterday's announcement "came as a surprise to (the management team)" and that management "had multiple conversations with the board to try to better understand the reasoning and process behind their decision." According to the memo, as of the morning of the 18th, discussions were still ongoing.
OpenAI's previous plan to sell employee shares, which would have valued the startup at about $86 billion, may be in jeopardy. Three sources at the company revealed that OpenAI no longer expects the deal, led by Thrive Capital, to happen or, if it does, the deal's valuation will be reduced due to recent developments.
Altman pitched to investors that he planned to start a new venture, and Brockman was expected to join.
Investors, including Microsoft, were outraged by the turn of events and pressured the OpenAI board to reinstate Altman. Meanwhile, some of OpenAI's major venture capital backers are reportedly considering filing a lawsuit against the board of directors. No one, including Reid Hoffman, co-founder of Khosla Ventures and LinkedIn and a former OpenAI board member, was notified in advance of the decision to fire Altman.
A source close to Altman said the board agreed in principle to resign and allow Altman and Brockman to return, but has since hesitated.
Mulati sent a note to employees saying Altman would be returning to the office. When Altman arrived, he used a visitor's pass to enter OpenAI's San Francisco headquarters to meet with the board of directors, and Brockman was invited to join.
Ultraman shows off his visitor's pass.
Altman, Brockman, Mulaty, Lightcap, head of strategy Jason Kwon and other members of the leadership team spent the day negotiating with the board, advocating for Altman's reinstatement and making recommendations for new board members. But predictably, directors are resisting. The board has still not resigned, citing concerns over who could replace them, and is reviewing candidates. Salesforce co-CEO Bret Taylor may be a candidate. Another possible candidate is a Microsoft executive.
Negotiations continued late into the night, with multiple rounds of takeout delivered to the office and reporters from multiple news outlets monitoring the scene like a papal conclave. Inside, employees gathered, some crying.
Ultimately, Sutskwei told employees that Altman would no longer serve as OpenAI CEO. OpenAI appointed Sher, co-founder of video streaming site Twitch, as interim CEO to replace Mulati. At the same time, the search for a new permanent CEO continues.
According to a person familiar with the situation, the office software Slack sent a message to employees announcing an all-hands meeting with Scheer, but several employees responded with a middle finger emoji. Less than a dozen people were present. About 200 people waiting for a solution poured out of the building.
In the lobby, Brockman's wife, Anna Brockman, cried and begged Sutskowe to reconsider. In 2019, Sutskwe officiated at Brockman’s civil ceremony at the OpenAI offices.
Nadella posted on X at midnight, announcing that Altman, Brockman and their colleagues would join a new artificial intelligence research team led by Microsoft. Ultraman retweeted this post to give confirmation. Nadella also opened the door to other OpenAI employees, saying they would receive the resources they need if they choose to join.
The board issued an internal memo to company employees upholding its decision to oust Altman. "Simply put, Sam's conduct and lack of transparency in his interactions with the board undermined the board's ability to effectively oversee the company in the manner authorized to do so. "It is critical that any CEO be honest and transparent with the board."
In an effort to refute theories circulating on social media, the memo added, "This decision has nothing to do with product safety, development speed, or OpenAI's finances."
Nearly 500 of OpenAI's roughly 770 employees, including Sutskvi, signed a letter saying they may resign unless the board resigns and Altman is reappointed. By the end of the day, the number of employees who had signed the letter climbed to 747.
Altman forwarded a large number of posts from OpenAI employees on X saying "OpenAI is nothing without employees." Altman then posted two more posts to appease OpenAI employees, saying he was proud of the company's management team and "I'm excited that we will all be working together in some way."
Sutskevi posted a post on X, saying he regretted the decision to oust Altman. "I never meant to hurt OpenAI. I love everything we have built together, and I will do everything I can to reunite the company." Altman retweeted the post and posted three red heart emoticons.
Altman's deal to Microsoft has not yet been finalized, and Altman and Brockman remain open to returning to OpenAI if the other board members who initially fired Altman resign. Ultraman posted on X that "we will all work together in some way," meaning the fight continues.
That night, when Nadella was asked on a TV show whether Altman would become a Microsoft employee and whether 700 OpenAI employees would join Microsoft, he only said that "this is a choice made by the OpenAI board of directors, management and employees." He said OpenAI needs a new governance structure.
Microsoft has opened up a floor of space at its LinkedIn offices in San Francisco, outfitted with clusters of laptops and GPU chips to provide computing power for artificial intelligence, to accommodate Altman's team in the event his return to OpenAI fails. But a person familiar with Nadella's thinking said Microsoft's first goal is to return Altman as OpenAI CEO.
OpenAI’s board of directors has approached Dario Amodei, co-founder and CEO of Anthropic, a large language model developer, to discuss a possible merger of the two companies, people familiar with the matter said. But Amodei quickly rejected the offer.
Discussions are ongoing between Altman, Schell and at least one board member, Adam D’Angelo, people familiar with the matter said. The talks also involved some of OpenAI’s investors.
The company is trying to resolve the confusion surrounding company leadership before Thanksgiving (Nov. 23), hoping employees will not feel uncertain about their work status during the holiday, one person said.
People familiar with the matter revealed that Altman had previously clashed with board member Helen Toner. She published an academic paper in October promoting the security practices of OpenAI competitor Anthropic, and Altman confronted her, saying she was harming the company.
OpenAI announced on social media that it had reached an agreement in principle, and Altman returned to the company as CEO, "and formed a new board of directors consisting of Brett Taylor (Chairman), Larry Summers and Adam D'Angelo. We are working together to figure out the details. Thank you very much for your patience with this."
Source: TheInformation, TheVerge, Wall Street Journal, Bloomberg, X, CNBC, etc.