ChatGPT developer OpenAI is bracing for a staff exodus and uncertainty around a planned $86 billion share sale after a coup by the company’s board led to the ousting of Sam Altman as CEO.
Altman will now join software giant Microsoft to lead a new advanced artificial intelligence (AI) research team, the OpenAI-backer’s CEO Satya Nadella announced on X, formerly known as Twitter.
Meanwhile, Emmett Shear, the former chief of streaming platform Twitch will take over as the interim CEO of the startup behind the global generative AI boom.
Shear co-founded Twitch and had stepped down from the Amazon.com-owned live video streaming platform earlier this year.
“We look forward to getting to know Emmett Shear and OAI’s new leadership team and working with them,” Microsoft CEO Satya Nadella posted on social media platform X. He added Microsoft remains committed to its partnership with OpenAI, amid media reports that Altman’s exit caught him off guard.
Microsoft reportedly owns 49% of OpenAI, while other investors and employees control 49%, with 2% owned by OpenAI’s nonprofit parent.
We remain committed to our partnership with OpenAI and have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners. We look forward to getting to know Emmett…
— Satya Nadella (@satyanadella) November 20, 2023
The OpenAI board fired Altman on Friday, sending shockwaves through the tech world. But investors, including Microsoft, and employees of the firm attempted to steady the ship by bringing him back.
Investors reportedly pushed the OpenAI board to restore Altman as CEO, fearing a mass exodus of talent without him.
Eventually, Altman also said he was discussing a possible return to OpenAI and changing the company’s governance structure, while also considering launching a new AI venture. But the OpenAI board ultimately decided not to reinstate Altman.
OpenAI’s Chief Operating Officer Brad Lightcap wrote in an internal company memo that Altman was ousted over a “breakdown of communications.”
Directors of the company, now worth about $80 billion, cited a failure to be “consistently candid in his communications.” Further details of what ultimately led to Altman’s ousting were not immediately clear
Exodus to Microsoft
OpenAI-cofounder Greg Brockman also stepped down from the AI firm’s board as chairman as part of the management shuffle.
Brockman said he quit OpenAI over Altman’s firing on Friday. Their departures blindsided many employees who discovered the abrupt management change from an internal message and the company’s public blog.
Sam and I are shocked and saddened by what the board did today.
Let us first say thank you to all the incredible people who we have worked with at OpenAI, our customers, our investors, and all of those who have been reaching out.
We too are still trying to figure out exactly…
— Greg Brockman (@gdb) November 18, 2023
Nadella said Brockman would also join Microsoft.
Altman and Brockman joined executives at the company’s headquarters on Sunday after then interim CEO Mira Murati told staff she invited Altman, The Information earlier reported on Sunday.
Altman posted an image of himself on X on Sunday wearing an OpenAI guest badge with the caption: “First and last time I ever wear one of these.” In a separate post on X, he reshared Nadella’s message with a comment “the mission continues”.
Responding to Altman’s post, Nadella wrote, “We’ve learned a lot over the years about how to give founders and innovators space to build independent identities and cultures within Microsoft, including GitHub, Mojang Studios, and LinkedIn, and I’m looking forward to having you do the same.”
Some researchers including Szymon Sidor have also left the company following the CEO change, two people familiar with the matter said. Sidor confirmed the reports.
Shortly after the internal announcement of Shear’s appointment, distraught employees “streamed out” of OpenAI headquarters in San Francisco, The Information reported.
Dozens of staffers internally announced they were quitting the company on Sunday night, it said, citing a person with knowledge of the situation.
A large number of OpenAI employees were seen posting “OpenAI is nothing without its people” on X.
AI wizard, talent magnet
Before Nadella’s announcement that he was joining Microsoft, several OpenAI employees expressed support for joining Altman in starting an AI company.
Khosla Ventures, an early backer of OpenAI initially said it wanted Altman back at the firm. But the fund’s founder Vinod Khosla posted on X on Saturday he “will back [Altman] in whatever he does next.”
Altman, seen by many as the face of generative AI, is credited with almost singlehandedly convincing Microsoft CEO Satya Nadella to commit $10 billion to the company.
He also led the company’s tender offer transactions this year that fuelled a nearly three-fold valuation bump from $29 billion to over $80 billion.
Altman’s aura also helped attract AI engineering talent in what may be the most competitive market seen in tech circles in years. He successfully recruited from Google, Microsoft and other established tech giants with surer pay packages, promising to let them in on the ground floor of a world-altering technology.
Altman’s moonshot ethos likely played well among ambitious engineers tired of toiling away for blue chip tech firms.
“As long as you are right, being misunderstood by most people is a strength not a weakness,” wrote Altman in a blog post three years ago. “You and a small group of rebels get the space to solve an important problem that might otherwise not get solved.”
i love you all.
today was a weird experience in many ways. but one unexpected one is that it has been sorta like reading your own eulogy while you’re still alive. the outpouring of love is awesome.
one takeaway: go tell your friends how great you think they are.
— Sam Altman (@sama) November 18, 2023
Uncertainty around OpenAI tech plans
Altman and Apple’s former design chief Jony Ive were discussing building a new AI hardware device, the Information reported in September. It reported that SoftBank CEO Masayoshi Son had been involved in the conversation.
A planned sale of OpenAI employee shares that would value the startup at about $86 billion on paper also hangs in the balance after Altman’s sudden firing and a slew of top executive departures, the Information reported.
The tender offer, which Thrive Capital is leading, has not yet closed but has been in its final stages and was expected to be completed as soon as next month, the report added, citing a person familiar with the matter.
The company has, meanwhile, reassured staff that it would be fine without Altman.
But the Silicon Valley superstar, who once ran the best known startup incubator YCombinator, or YC, leaves the company with a big hole to fill in its fundraising efforts – maintaining the software costs some very real money. It also takes talented engineers, who are quickly flocking to Altman.
- Reuters, with additional inputs from Vishakha Saxena