Firing Sam Altman: Can OpenAI save its $90 Billion Brand

Microsoft didn’t get the seat on OpenAI’s board of directors so they got Altman

After one year of (public) life with ChatGPT, OpenAI has again rattled the markets. This time, however, the transformation is not what some of us hoped to see. On November 17th, OpenAI's board announced that their CEO, Sam Altman, was departing for reasons that remain unclear to many. While the sequence of events have been summarized by the Generative AI LinkedIn account, there's much more to the story.

“he was not been consistently candid in his communications with the board, hindering his ability to exercise its responsibilities”

Just two weeks ago, 6th of November, OpenAI introduced a platform that allows users to create personalized versions of ChatGPT tailored to specific needs, all without the need for coding. OpenAI will make these customized GPTs, accessible through the GPT Store - basically open the AI floodgate open to anyone.

It seemed that it will be exciting times for the OpenAI team - from building and AI assistant to building a full AI assistant ecosystem in a year(+) from the public launch of ChatGPT to becoming a $90 Billion Valuation company that is much hotter than Nvidia.

“you might be wondering how I got here?”

While there are plenty of speculations about what happened, there are four theories that the society of the internet is continuing to fuel:

AI Safety

There have been reports that with pushing the boundaries of AI, AI is getting smarter and faster. AI might not even shared the same goal with the humanity. That’s why many AI worriers always start with a question: “What is the probability that AI poses a truly existential risk?” as “0” is not an answer, given a non-zero risk of total extinction, shouldn’t we be truly cautious? While Sam and his exec team are very optimistic about AI lowering than raising existential risks the board might not share the same views on the topic?

Full read: https://www.bloomberg.com/opinion/articles/2023-11-18/sam-altman-s-exit-from-openai-is-ai-safe-will-ai-kill-us-all

Communication issues

OpenAI’s chief operating officer Brad Lightcap wrote: “We can definitively say that the board's decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices. This was a breakdown in communication between Sam and the board.”

It's quite surprising that the investors like Khosla Ventures, which has a significant stake in OpenAI, as well as Andreessen Horowitz and Sequoia Capital were not initially informed about Sam's dismissal. No one has clarified how and why the communication and level of trust broke down, especially since the investors were trying to rehire Altman to his previous role of CEO after the firing. The communication breakdown, and more importantly, the discussion around the new capital raise, might have been the reason for the abrupt dismissal.

With Altman's ambition to push the new capital raise and valuation to an impressive $90B and his new business venture in mind (a new microchip development company), the potential pool of investors from the Middle East or SoftBank’s founder Masayoshi Son could have been a cause of concern for OpenAI’s board.

Further reading: https://www.ft.com/content/ebe403b5-150a-4768-b0df-80156a5156fc

Profit v. non-profit motivations

According to Techcrunch, OpenAI’s for-profit subsidiary, OpenAI Global, LLC, is fully controlled by OpenAI’s non-profit. While the for-profit subsidiary can commercialize its tech, it is subject to the non-profit’s mission: attaining artificial general intelligence (AGI), or AI that can, as OpenAI defines it, "outperform humans at most economically valuable work."

The non-profit OpenAI’s board has the power to both determine when the company has achieved AGI and exclude this AGI from IP licenses and other commercial terms, including with Microsoft, one of OpenAI’s biggest investors and a steadfast integrator of OpenAI’s various technologies.

Full read: https://techcrunch.com/2023/11/17/sam-altman-is-out-as-openais-ceo/?utm_medium=TCnewsletter&tpcc=TCdailynewsletter

and now to my favourite one:

Partnership with Microsoft

Microsoft and Satya Nadella wanted a board seat. Many have criticized the Microsoft CEO for allowing the tech giant to become dependent on Altman’s AI startup without any guarantee for at least one seat on OpenAI’s board of directors. Did Altman try to secure that board seat and upset the board? Did the partnership with Microsoft fracture the unity and vision of OpenAI?

After today’s announcement by Chairman and the CEO of Microsoft, Satya Nadella, this theory might be plausible:

"We're extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team. We look forward to moving quickly to provide them with the resources needed for their success." This argument becomes even more plausible. While the WIRED reports that OpenAI staff threatened to quit and join Microsoft unless the OpenAI board resigns, Microsoft must be enjoying its upper hand.

Further readings: https://www.theinformation.com/articles/microsoft-eyes-seat-on-openais-revamped-board

“i love the openai team so much”

While Altman was parading his love to OpenAI’s team, he definitelly didn’t do any favours for the OpenAI as a brand. Like at any messy divorce the one that shows love and compassion wins both hearts and minds, which is exactly what Sam did. By staying unphased (at least to the external eye) he showed that there’s power in personal brand.

As Lana Del Rey once sang: “Sometimes love is not enough and the road gets tough but I don’t know why” - do we have enough love for OpenAI’s brand to make it “untarnished” or the winners (Microsoft & Altman) take it all, OpenAI craze and valuation will die down and we’ll all be forced to flock to Microsoft if we want to stay ahead of the transformative AI curve?

Can OpenAI save its $90 billion brand?

Definitely not. Especially because the OpenAI’s board of directors reasoning was so vague. There’s power in clarity, and with a lot of power, comes a lot of responsibility, therefore, a deep need for transparency.

While Altman might have broke the trust with the board of directors, OpenAI’s board definitely broke OpenAI’s brand.

But can it be fixed?

We’ll see on what’s being valued by the end user - freedom, (potential) transparency and non-profit idealism of OpenAI or the visionary of Sam Altman.