OpenAI Is in Deadlock After Sam Altman’s Ousting

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  • The next few hours will be crucial for OpenAI.
  • Discussions over the future of OpenAI will resume Tuesday morning.
  • Most OpenAI employees have signed a letter saying they will leave if Altman is not reinstated.

Over the past four days, OpenAI has seen three CEOs, several resignations, and perhaps the most dramatic power struggle ever seen inside a tech company. And it’s far from over.

The OpenAI story, which began with Friday’s ousting of CEO Sam Altman, is changing minute by minute (by the time you read this, there’s a good chance there will have been several new twists). But the next few hours may be the most crucial in this saga.

Extremely late Sunday, Microsoft CEO Nadella announced that Altman and OpenAI cofounder Greg Brockman would join Microsoft to lead a new AI research team.

Only 36 hours later, it looks like that may no longer happen.

Per The Verge, Altman and Brockman are willing to return to OpenAI if the remaining board members who ousted them step aside.

One problem: it really looks like those board members don’t want to flip on their decision to push Altman out.

OpenAI vice president of global affairs Anna Makanju told staff last night that the company was in “intense discussions” with Altman and the board that will continue Tuesday morning “when everyone’s had a little more sleep,” Bloomberg reported.

While she acknowledged these discussions can “drag out,” there’s increasing pressure from OpenAI’s workforce, most of whom have signed a letter announcing they will leave to join Microsoft if Altman and Brockman are not reinstated. In one of the strangest twists of the saga so far, OpenAI cofounder Ilya Sutskever, who led the charge to push Altman out, signed this letter and later said he regretted his role in pushing Altman out.

All of this sets the stage for an even greater power struggle in the coming hours as investors pressure the board to bring Altman back, employees threaten to jump ship, and interim CEO Emmett Shear attempts to quell a lot of anger.

Meanwhile (and bizarrely) nobody seems to know why Altman was fired in the first place. Employees were offered some vague reasons that seemed to amount to bad project management at worst, and made no sense to staff, Business Insider’s Kali Hays reported. Some outlets have reported there were tensions between Altman and the board, in particular cofounder Sutskever, over the speed of developing generative AI.

It’s hard to predict how the rest of this saga plays out.

While getting Altman and Brockman initially seemed like a boon for Microsoft, the OpenAI employee revolt has thrown all that up in the air. Let’s say Microsoft ends up hiring the OpenAI employees threatening to walk, to the tune of almost 800 staff. That’s a messy, expensive process and potentially throws up IP issues. What happens to OpenAI’s tech?

The alternative is just having Altman and Brockman lead an internal Microsoft team, while OpenAI continues separately. But that would present plenty of corporate governance headaches of its own, since OpenAI is reliant on Microsoft’s compute (and money). Whatever happens, that latter dynamic will still be a factor. Nadella has made clear he thinks OpenAI’s board needs to change, and he’s the man writing $13 billion checks.

Meanwhile, millions of developers and startup founders who use OpenAI’s products are watching with bated breath. Some of OpenAI’s startup customers are looking to jump ship to other AI model providers including Anthropic and Meta.

Rivals are certainly poised to snap up any OpenAI talent headed to the exits. Google’s DeepMind, which has delayed its highly-anticipated Gemini model, would benefit from a lot of OpenAI’s talent. Salesforce CEO Marc Benioff has already offered to hire OpenAI employees who leave and match their compensation.

But nobody truly knows what’s going to happen.

Just a few days ago the company was looking at an $86 billion valuation. Now it’s facing a mutiny and an increasingly cloudy future. It all hangs in the coming hours.

Got a tip? You can reach Hugh via encrypted email (hlangley@protonmail.com) or the encrypted-messaging apps Signal and Telegram (628-228-1836 or 07796 902273).

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