(Bloomberg) — OpenAI made headlines when CEO Sam Altman was abruptly ousted, causing shockwaves in Silicon Valley, leaving investors and employees in disbelief. Altman’s leadership had been closely associated with the success of ChatGPT, OpenAI’s chatbot which went viral. Following the news, the company, valued at $86 billion, faced internal turmoil, with key figures, including OpenAI President Greg Brockman, resigning in protest. There are even hints that the entire board may step down in the near future.
Here’s what you need to know:
1. Altman’s Clashes with Board on Safety and Ambitions
According to sources familiar with the situation, Altman’s dismissal stemmed from ongoing disagreements with the board. These disputes revolved around AI safety, the pace of technological development, as well as the commercial direction of the company. Additionally, Altman’s plans to secure funding from Middle Eastern investors to launch an AI chip startup, along with courting SoftBank for a substantial investment in a new hardware company, raised concerns about conflicts of interest and governance.
2. Chief Scientist Appeals to the Board
OpenAI’s co-founder and chief scientist, Ilya Sutskever, reportedly played a pivotal role in the clash between Altman and the board. After experiencing a reduction in his responsibilities within the company, Sutskever took the matter to the board, gaining support from influential members.
3. Altman’s Shocking Dismissal
In a surprising turn of events, Altman was informed of his firing during a Google Meet chat, leaving him blindsided. Brockman and Altman posted a joint statement about this unexpected turn of events.
4. Microsoft Caught Off Guard
Despite being a major supporter of OpenAI, Microsoft was taken by surprise by Altman’s dismissal. CEO Satya Nadella pledged to support Altman in his future endeavors and reaffirmed the company’s commitment to their partnership with OpenAI.
5. Share Sale Uncertainty
Following Altman’s departure, the planned sale of OpenAI shares at an $86 billion valuation was thrown into uncertainty. Trading in these shares has been put on hold, with some transactions even being cancelled outright, impacting key players like Thrive.
6. Pressure to Reinstate Altman
Investors are pressuring OpenAI’s board to reconsider Altman’s firing, with the potential return of Altman to the company and the possibility of the current board stepping down under discussion. The situation remains fluid and could have wide-reaching implications.
–With assistance from Brad Stone, Ashlee Vance, Dina Bass, Ed Ludlow and Emily Chang.
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