Light shed on ouster of CEO
SAN FRANCISCO>> More than three months after Openai’s board of directors briefly ousted Sam Altman, the CEO of the high-profile artificial intelligence company, questions remain about exactly what led the board to make such a dramatic move.
A report from an outside law firm, which is expected in the coming days, could shed more light on the board’s decision as well as the chaotic five days before Altman returned to the company.
But as anticipation for the report grows, previously unreported details are emerging about the role that Mira Murati, Openai’s chief technology officer, played in the ouster of Altman.
Murati wrote a private memo to Altman raising questions about his management and also shared her concerns with the board. That move helped to propel the board’s decision to force him out, according to people with knowledge of the board’s discussions who asked for anonymity because of the sensitive nature of a personnel issue.
Around the same time, Ilya Sutskever, a co-founder and chief scientist of Openai, expressed similar worries, citing what he characterized as Altman’s history of manipulative behavior, the people said. Both executives described a hot-and-cold relationship with Altman. Although it was not clear whether they offered specific examples, the executives said he sometimes created a toxic work environment by freezing out executives who did not support his decisions, the people said.
Murati’s interactions with the board offer insight into problems festering at the senior levels of Openai, though both executives publicly backed Altman’s return to the company.
Wilmerhale, the law firm conducting the investigation, is expected to wrap up the process imminently. The company is expected to announce a new board of directors at the same time, some of the people said. Several directors left the board after Altman returned to the company in November.
Hannah Wong, a spokesperson for Openai, said in a statement that the company’s senior leadership team, led by Murati during her time as interim CEO, unanimously asked for Altman’s return, as did an open letter signed by 95% of Openai’s employees.
“The strong support from his team underscores that he is an effective CEO who is open to different points of view, willing to solve complex challenges, and who demonstrates care for his team,” Wong said. “We look forward to findings from the independent review versus unsubstantiated claims.”
Altman declined to comment. Murati did not respond to a request for comment. Sutskever’s lawyer, Alex Weingarten, said claims that he had approached the board were “categorically false.”
(The New York Times sued Openai and Microsoft in December for copyright infringement of news content related to AI systems.)
Since November, Openai and its investors have scrambled to contain the fallout from the incident, which threatened to upend one of the tech industry’s most important startups. Openai was valued at more than $80 billion in its last financing round.
Much of the remaining 700-plus employees at Openai — many of whom threatened to quit when Altman was fired — hope to put the events in November behind them. (Some employees refer to that period as “The Blip.”)
But there are others who are hopeful that the Wilmerhale investigation will provide a thorough accounting of the events surrounding Altman’s dismissal. It is not clear if the full report or a synopsis of it will be released to the public.
At the time of Altman’s firing, Openai’s six-person board included Sutskever; Helen Toner, an AI researcher who works at a Georgetown University think tank; Adam D’angelo, a former Facebook executive; Greg Brockman, a cofounder and president of the company; Tasha Mccauley, an adjunct senior management scientist at the RAND Corp.; and Altman.
As a condition of Altman’s reinstatement, executives agreed to shuffle Openai’s board to include a more diverse and independent set of directors. Openai’s six-person board was whittled down to an interim board of three: Bret Taylor, a former Salesforce and Facebook executive, joined as a board chair helping to appoint a new set of directors. Lawrence H. Summers, the former Treasury Secretary, also joined. D’angelo remains on the board.
In October, Murati approached some members of the board and expressed concerns about Altman’s leadership, the people said.
She described what some considered to be Altman’s playbook, which included manipulating executives to get what he wanted. First, Murati said Altman would tell people what they wanted to hear to charm them and support his decisions. If they did not go along with his plans or if it took too long for them to make a decision, he would then try to undermine the credibility of people who challenged him, the people said.
Murati told the board she had previously sent a private memo to Altman outlining some of her concerns with his behavior and shared some details of the memo with the board, the people said.
Around the same time in October, Sutskever approached members of the board and expressed similar issues about Altman, the people said.
Some members of the board were concerned that Murati and Sutskever would leave the company if Altman’s behavior was not addressed. They also grew concerned the company would see an exodus of talent if top lieutenants left.
There were other factors that went into the decision. Some members were concerned about the creation of the Openai Startup Fund, a venture fund started by Altman. Unlike a typical company investment fund, which is a legal extension of the corporation, Altman held legal ownership for the Openai fund and raised money from outside limited partners. Openai said that the structure was temporary.
The Openai fund used that money to invest in other artificial intelligence startups. Some members of the board grew concerned that Altman used the fund to skirt accountability from Openai’s nonprofit governance structure. They confronted Altman about his legal ownership and operational control over the fund last year. Axios has previously reported on Altman’s control of the Openai fund.
Members of the board began discussing their next steps after they were approached by Murati and Sutskever. By mid-november, the board planned to name Murati as interim CEO while conducting a search for a new CEO, the people said. The board ousted Altman on Nov. 17.
In the days after, Altman waged a public fight to regain his position, using a mix of public pressure and powerful allies in Silicon Valley to push for his reinstatement. Most of Openai’s 770 employees threatened to quit if he were not reinstalled as CEO. Murati and Sutskever quickly — and publicly — said they supported Altman’s return to the company. Sutskever has not returned to his regular duties at the company, some of the people said.
After five days of public back and forth, Altman returned to his job.