How rapidly the mighty fall. Sam Altman, who has symbolized the surge of conceptual artificial intelligence since the launch of ChatGPT a year ago, experienced a dramatic downfall. Speaking at the Asia-Pacific Economic Co-operation conference in San Francisco on November 16, the co-founder and CEO of OpenAI extolled the virtues of AI to industry professionals and global leaders. However, the very next day, he found himself ousted. The board lost confidence in Mr. Altman’s leadership, citing a lack of transparency in his communications as the reason for his dismissal, as stated in a blog post on the OpenAI website. Shortly after, another bombshell hit as Greg Brockman, a co-founder and president of the company, announced his resignation in solidarity with Mr. Altman’s termination.
Given Mr. Altman’s perceived pinnacle of success, his abrupt removal came as a shock to many. Not long ago, luminaries like Emmanuel Macron and Narendra Modi sought meetings with him following his global tour. During OpenAI’s recent developer day on November 6th, he unveiled a range of new AI tools, drawing parallels to Steve Jobs—a comparison that now carries a sense of irony considering Jobs’ own ousting from his company in 1985. A company insider likened Mr. Altman and Mr. Brockman’s departures to a scenario where Google would have parted ways with Larry Page and Sergey Brin in its early stages.
The decision blindsided both OpenAI’s employees and stakeholders. Mr. Brockman later revealed in a tweet that neither he nor Mrs. Altman were privy to the developments leading to their ousting until the last moment. Forbes reported that even Microsoft, which holds a 49% stake in the company, was kept in the dark until the eleventh hour. Microsoft’s stock took a hit, dropping by 2%, likely due to the crucial role OpenAI’s technology plays in helping the company achieve its AI objectives, including the highly anticipated “copilot” for its Office suite.
The unexpected dismissal raises several pressing questions: the underlying reasons behind it, the implications for a company at the forefront of relational AI, and the potential impact on future technological advancements. The ensuing developments will hinge on the responses of OpenAI’s staff, the tech industry, and the broader community.
The committee has yet to provide a comprehensive rationale for its actions. According to a prevailing theory put forth by Kara Swisher of New York Magazine, a divergence in views between Mr. Altman and the rest of the board, particularly chief scientist Ilya Sutskever, on balancing revenue generation with model release security may have precipitated the upheaval. An OpenAI employee bluntly described the situation as a “coup d’état.” However, Mr. Sutskever refuted this characterization in a subsequent meeting with the staff, asserting that the board was merely fulfilling its duties.
If Mr. Altman’s dismissal indeed stemmed from disagreements over AI safety, it would mark a significant escalation in a longstanding debate that has shaped OpenAI and the industry as a whole. Founded as a non-profit in 2015 by, among others, Mrs. Altman, Brockman, and Sutskever—an accomplished AI researcher—OpenAI took a notable turn in 2019 when Mr. Altman spearheaded the creation of a “capped-profit” entity within the nonprofit structure, securing a $1 billion investment from Microsoft to support the escalating computational demands of training AI models. The divergence in business focus in 2021 led to the departure of a faction of senior employees who went on to establish a rival company, Anthropic. The launch of ChatGPT was just one phase in Mr. Altman’s vision to evolve the organization from a modest research lab into a nimble, product-centric entity.
The repercussions of Mr. Altman’s ousting on OpenAI are immediate and profound. In addition to Mr. Brockman, three other top executives have departed, with the possibility of further exits, especially if the dismissal was driven solely by strategic disagreements. Financially, there may be implications as well. A stakeholder at OpenAI previously highlighted Mr. Altman as the linchpin of the startup due to his exceptional talent in recruitment and fundraising, likening him to a significant asset akin to Elon Musk. However, given the company’s established reputation and Microsoft’s backing, Mr. Altman’s departure may not impede OpenAI’s ability to attract talent and secure funding. The exit of Mr. Brockman, often regarded as the startup’s strategic brain, compounds the sense of upheaval.
As one of the premier private tech entities globally, OpenAI is currently in talks to raise funds with a valuation nearing $90 billion. A confidential market source noted a strong demand for OpenAI’s shares before the recent developments, indicating that the company’s valuation will now face scrutiny.
The broader economic impact remains uncertain. OpenAI, under Mr. Altman’s leadership, gained a competitive edge by swiftly introducing new products to the market. This proactive approach compelled rivals to hasten their pace to keep up. A shift towards a more safety-centric approach at OpenAI could potentially slow down the sector as a whole, providing competitors with an opportunity to catch up. Startups reliant on OpenAI’s systems for product development might exercise caution before heavily committing to a single entity. Mr. Altman’s cryptic statement hinting at future plans suggests that the repercussions of this crisis may just be unfolding.
