Why OpenAI’s Board Faces Investor Backlash and How it Could Impact the Company

Something unexpected happened on Friday when the board of OpenAI, the AI startup responsible for creations like ChatGPT, announced they had removed CEO, Sam Altman.

Despite appearing well within their right, it seems that many of OpenAI’s investors, partners, and employees were more comfortable with the power the board held rather than the execution of that power, especially given Altman’s significant influence within the tech world.

Within just 24 hours of this announcement, rumors began to spread that the board was discussing bringing Altman back as CEO, indicating a profound shift in opinion possibly influenced by the ire and panic of investors.

Reports surfaced suggesting that Microsoft, a major OpenAI partner, was “furious” about Altman’s removal and was seeking to reinstate him. Meanwhile, venture capital backers are considering legal action against the board for their lack of advance notice regarding Altman’s firing.

Khosla Ventures founder Vinod Khosla expressed support for Altman and suggested that the fund would stand behind him in his future endeavors.

It’s clear that Microsoft holds significant leverage, as OpenAI has received only a fraction of their recent $10 billion investment. Withholding this funding could severely impact OpenAI’s operations.

The aftermath of Altman’s removal saw the departure of several top AI researchers and executives from OpenAI, leading to speculation of a power struggle within the board. The decision to remove Altman was deemed necessary by some, while others in the tech community and within OpenAI expressed immediate support for him.

The future of OpenAI remains uncertain as Altman and Brockman explore new ventures, leaving the board with an uncomfortable about-face in their decision-making process.


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