Inside Sam Altman's 'extraordinary firing' from OpenAI

AI superstar joins Microsoft after 'philosophical disagreement' with his old board that stunned tech world

Sam Altman
Sam Altman will be joined at Microsoft by Greg Brockman, his fellow co-founder of OpenAI
(Image credit: Justin Sullivan/Getty Images)

OpenAI co-founder Sam Altman has been hired by Microsoft days after being fired as CEO of the company that he helped to create.

The suddenness of his sacking on Friday, and "the Icarus-like fall it represents for Altman, is difficult to overstate", said The Atlantic. It's "as if Bill Gates was abruptly shown the door at Microsoft in 1995".

Employees at OpenAI, along with Silicon Valley's big guns, rallied behind Altman over the weekend. Leading investors led by Microsoft, which has put $13 billion into OpenAI so far, explored the possibility of reinstating him to his former role. 

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These efforts fell through on Sunday when OpenAI's board announced that former Twitch CEO Emmett Shear had been hired to replace Altman. This was swiftly followed by news that Altman and his fellow OpenAI co-founder Greg Brockman would be joining Microsoft to lead a new advanced AI research team.

Why was Altman fired?

"Healthy companies led by competent, commercially successful and globally beloved founders generally don’t tend to fire them," said Bloomberg, and on the surface at least, "all those things could have described [Altman's] role at OpenAI".

Altman had "kicked off a global race for artificial intelligence supremacy, helped OpenAI surpass much larger competitors, and was, by this point, regularly compared to Bill Gates and Steve Jobs", said the financial news site.

Now he is out. A blog post on OpenAI's website on Friday said the board "no longer has confidence" in Altman's leadership because "he was not consistently candid in his communications with the board".

Reading between the lines of the "extraordinary firing", said the BBC's technology editor Zoe Kleinman, "this suggests there was something he either had or had not told them – and somehow he's been caught out. The wording is so powerful, it almost sounds personal."

It wasn't a case of "one big problem", a person with direct knowledge of the board's decision told the Financial Times (FT). "The board reached the point where they couldn't believe what Sam told them."

According to "people familiar with the matter", the FT said, Altman was ousted "because of concerns about his commitment to OpenAI’s mission of ensuring safe and beneficial AI".

Such a "philosophical disagreement wouldn't normally doom a company that had been in talks to sell shares to investors at an $86 billion valuation, but OpenAI was nothing like a normal company", said Bloomberg. Structured as a non-profit but with a for-profit subsidiary that had aggressively courted venture capitalists and corporate partners, this "novel – and, as OpenAI critics see it, flawed – structure put Altman, Microsoft, and all of the company's customers at the mercy of a wonky board of directors that was dominated by those who were skeptical of the corporate expansion".

The most popular theory, put forward by Kara Swisher of New York magazine, is that the rest of the board, assembled by its chief scientist Ilya Sutskever, disagreed with Altman on how the firm should balance making money with the safe release of its models. This appears to have influenced the decision to appoint Shear as the new CEO.

"In spite of now being at the helm of one of the world's most powerful AI companies – and being a self-described 'techno-optimist' – Shear has expressed concerns about what he sees as the potential existential threat posed by the technology," reported the BBC.

What will happen next?

While Microsoft's CEO Satya Nadella said it would "remain committed to our partnership with OpenAI" following the change in leadership, the manner in which the board unceremoniously dumped Altman has not gone down well with either its key backer or its employees. 

The company was in "open revolt" today, said Wired, as more than 500 employees signed an open letter "threatening to leave unless the board resigns" and reinstates Altman and Brockman.

According to Axios, Microsoft was left "blindsided", learning about the news only a minute before it was announced, "which was one minute earlier than employees at OpenAI reportedly found out", said The Atlantic.

By hiring two OpenAI co-founders who have a "broad and dedicated following among staff", said the FT, Microsoft is "likely to gain the upper hand over rivals who are attempting to tap talented AI researchers and engineers from OpenAI".

OpenAI is currently in talks to raise funds at a valuation of nearly $90 billion but following the drama of the past few days, and now deprived of Altman and Brockman – the face and engineering brains of the start-up – that valuation may now be tested.

The impact on the wider industry is "less clear", said The Economist. Under Altman, OpenAI shipped new products into the world "which gave it a first-mover advantage" and as a result its competitors were "forced to move faster to keep pace". 

A more "safety-focused OpenAI will therefore slow down the whole industry, allowing competitors to catch up", while "AI startups that were building products with OpenAI's technology may now think twice before tying themselves too closely to one company".

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