Inside the OpenAI Palace Coup - Microsoft and Investors Furious Over Altman Firing

I was the first to call Sam Altman's firing for what it was - a palace coup to overthrow the king.

Speculation has been rampant this weekend, with a wide range of cryptic tweets and social media discussions regarding what actually happened inside the boardroom at OpenAI. What is clear, though, is that the firing of CEO Altman was not discussed with major investors, including primary backer Microsoft, which already has 10 billion dollars at stake in the company and isn't happy about not being consulted over such a dramatic move.

Essentially, between the departure of Altman, Brockman, and the talent in the trenches, OpenAI has gone off the rails and is careening towards total catastrophe.

The board at OpenAI is unique in that it is only made up of six people, with Altman being one of the board members. The other seat of importance belongs to Greg Brockman who, on Friday via Twitter, announced he 'quit' after learning of Altman's dismissal ( and being told he was being removed from the board )

This left just four board members to make the decision on any major move, and here the clarity of the coup comes into focus. As any decision had to receive at least four votes, it meant the remaining board members had to vote in unison and hold ranks to oust the CEO.

What is becoming clear is that there was a power move by Mira Murati who, from the outside, in all the drama of Caesar's murder in the streets of Rome, appears to have taken Altman out by the knees, and then also had Brockman removed from a position of power. With the two men gone - the now seemingly kangaroo court board of directors appointed her as CEO and head of the fastest-growing AI company in the world.

The problem Murati didn't take into account was that you can't go and remove the CEO of a major company without consulting the people who are pumping billions of dollars into its growth.

Like a bad episode of The Apprentice (were there ever any good episodes?), the problem Murati didn't take into account was that you can't go and remove the CEO of a major company without consulting the people who are pumping billions of dollars into its growth. This wasn't some silicon valley start up, this is the leader in AI technology - the same one every tech giant in the world is chasing ever since ChatGPT was unveiled. Over the past 48 hours, the proverbial sh*t has started hitting the fan.

The Clash Between the Reality of Finance and the Ideals of Being a Non Profit

From what we are learning from insiders, Murati and Altman had been at odds for quite some time over the direction of the company - in particular, their fundamental division over profit and investor return. Murati was focused on ensuring the technology OpenAI was creating was for the betterment of mankind and needed to be kept in check - whereas Altman clearly had an eye on the future as to the commercial potential of the technology. The breaking point very well may have been Altman's announcement of the new GPT marketplace - as well as his interview with the Financial Times last week where he openly discussed the importance of Microsoft's continued investment in the company.

With OpenAI being valued at 29 billion - and some suggesting as high as 90 billion dollars - Murati clearly has overstepped her bounds on her vision of a non-profit future for the company. It doesn't take a Harvard MBA to envision Microsoft being furious at the move, which has only been exacerbated by the exodus of several top engineers since Friday. Essentially, between the departure of Altman, Brockman, and the talent in the trenches, all no longer at the company, it has gone off the rails and is careening towards total catastrophe.

Failing a successful bid for Altman to return as CEO, the obvious next step will be for him to either start his own version of OpenAI - or take on the role of running a major competitor's operation.

To magnify the seriousness of this situation, the AI landscape has never been more heated, with Google and Elon Musk all nipping at the heels of the industry OpenAI created.

It is important to also take into account that Microsoft's massive financial investment in OpenAI isn't just about today - they are basing a massive amount of faith in the company being able to be the technology backbone of their move towards the future of artificial intelligence. Essentially, OpenAI is the equivalent of the DOS operating system for their future plans - and someone at the board of directors just went and canned the entire brain trust and leadership of the company.

Despite it being the weekend, those who have funded or are funding OpenAI are clearly upset, to put it mildly, with numerous financial and tech outlets reporting emergency negotiations with Altman in an effort to get him to return as CEO.

One can only imagine the future of Murati if this indeed happens, who has quickly found herself at the center of the biggest story in technology for 2023 and not in a good way.

The playbook, a source told Forbes would be straightforward: make OpenAI’s new management, under acting CEO Mira Murati and the remaining board, accept that their situation was untenable through a combination of mass revolt by senior researchers, withheld cloud computing credits from Microsoft, and a potential lawsuit from investors. Facing such a combination, the thinking is that management would have to accept Altman back, likely leading to the subsequent departure of those believed to have pushed for Altman’s removal, including cofounder Ilya Sutskever and board director Adam D’Angelo, the CEO of Quora.

Failing a successful bid for Altman to return as CEO, the obvious next step will be for him to either start his own version of OpenAI - or take on the role of running a major competitor's operation.

Once again, you don't need a crystal ball or an inside source to see how either of those scenarios aren't going to make Microsoft happy, as they already have a huge investment in OpenAI and essentially in Sam Altman. If he goes elsewhere, Microsoft is looking at a future where their money is now in competition with the person they invested in.

This is a rapidly evolving story, but the smart money is on Altman returning as CEO and quickly determining who was behind the coup and serving up a massive dose of vengeance.

In the meantime, Mira Murati may want to save time and start cleaning out her office and getting her resume ready."

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