OpenAI descends into chaos as nearly 500 staff threaten to leave unless board resigns

OpenAI, the artificial intelligence market leader and creator of ChatGPT, descended into chaos Monday amid reports that hundreds of its staff have threatened to leave the group following the controversial dismissal of founder Sam Altman.

Altman, 38, was ousted late Friday following a decision by the OpenAi’s four-person board amid suggestions that he had not been ‘consistently candid’ with respect to what the company called a “deliberate review process” that it did not detail. 

“We are grateful for Sam’s many contributions to the founding and growth of OpenAI. At the same time, we believe new leadership is necessary as we move forward,” the company said in a statement.

OpenAI chairman Greg Brockman, a close associate of Altman’s, resigned in protest, while scores of other employees unveiled their intention to leave the San Francisco-based tech group, potentially following Altman to Microsoft  (MSFT) – Get Free Report, where he now heads the tech giant’s new AI research team.

Wired magazine, meanwhile, reported Monday that around 490 employees have threatened to leave en-masse, and join Altman at Microsoft, if the board does not resign. 

“The process through which you terminated Sam Altman and removed Greg Brockman from the board has jeopardized all of this work and undermined our mission and company,” the letter stated, according to Wired’s update “Your conduct has made it clear you did not have the competence to oversee OpenAI.”

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

— Ilya Sutskever (@ilyasut) November 20, 2023

The rebellion creates an immediate and possibly existential challenge for new CEO Emmet Shear, the former head of Amzon’s  (AMZN) – Get Free Report Twitch platform, following his appointment by the board late Friday, just hours after the group had named Mira Murati as interim boss. 

Shear himself, meanwhile, said the communications surrounding Altman’s exit were “handled very badly” and vowed to to appoint an independent investigator to “dig into the entire process leading up to this point and generate a full report”.

Today I got a call inviting me to consider a once-in-a-lifetime opportunity: to become the interim CEO of @OpenAI. After consulting with my family and reflecting on it for just a few hours, I accepted. I had recently resigned from my role as CEO of Twitch due to the birth of my…

— Emmett Shear (@eshear) November 20, 2023

Microsoft CEO Satya Nadella, who lobbied for Altman’s return to the helm of OpenAI in the chaotic aftermath of his ousting late Friday, said the tech giant would continue working closely with the ChatGPT creator and CEO Shear in the weeks and months ahead, but major questions remain as to how it can survive its corporate governance crisis.

“In a nutshell, the JV 4 Person Board at OpenAI was at the kids poker table and thought they won until Nadella and Microsoft took this all over in a World Series of Poker move for the ages with the Valley and Wall Street watching with white knuckles throughout the weekend,” said Wedbush analyst Dan Ives.

Microsoft, which has invested around $13 billion in OpenAI, did not hold  seat on the board. However, it holds a 49% equity stake in OpenAI, and the group was last valued at round $86 billion ahead of a pending private share sale.

Microsoft has touted the potential of ChatGPT, a tool that uses human language to process instructions and which is being embedded in the tech group’s also-ran search engine Bing, to close the gap on market leader Google, the eponymous lead product of parent company Alphabet  (GOOGL) – Get Free Report.

Investors are betting that AI adoption will help Microsoft — which generated just $3.2 billion in search revenue last year — challenge the market dominance of Google, which churned around $43 billion.

Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.

Related Posts