Sam Altman, CEO of OpenAI, is interviewed at Bloomberg House on the first day of the World Economic Forum in Davos, Switzerland, on January 16, 2024.
Chris Ratliff | Bloomberg | Getty Images
DAVOS, Switzerland — Sam Altman, founder and CEO of OpenAI, said the night he was forced from his board of directors was “wild,” “very confusing,” and “very much a surprise.” He said that he felt that.
“But this is the structure, and I immediately started thinking about what to do next,” OpenAI CEO Altman said Tuesday at Bloomberg House on the Davos Promenade. He spoke at a private gathering.
“I didn’t even really think about coming back until I got a call from some directors the next morning,” Altman continued, recalling the dramatic events that led to his firing in November and his subsequent reinstatement. “But the board had all the power.”
In fact, the unusual corporate structure of OpenAI, the developer of the hot AI tool ChatGPT, led to Mr. Altman’s abrupt firing.
It’s usually rare to see a founder forced out of a company, but what makes Altman’s power different from other big tech founders is that he has no actual ownership of the company itself. It’s the cause.
“I have no equity in OpenAI,” Altman said during a May Senate hearing on artificial intelligence.
“You need a lawyer or an agent,” Sen. John Kennedy presciently quipped.
The organizational chart of the generative AI startup, valued at $86 billion by private investors, is clearly in disarray. That ultimately turned out to be bad for the founders, both in terms of protecting control of the company and in terms of retaining a financial stake.
OpenAI’s Board of Directors sits at the top of the power pyramid and is a consortium of voices responsible for managing OpenAI Inc., a 501(c)(3) charitable organization.
Between the board and the nonprofit is a company with limited profits called OpenAI Global, with which Microsoft signed a $10 billion investment deal last January. Behind the biggest names in generative AI technology are several other organizations, including a holding company, making for a somewhat complex organization.
I want to make a lot of money for all my shareholders, but it was very clear to me what people’s priorities were.
In November, the board announced it had lost confidence in its leadership and had expelled the CEO from the organization. The events that followed in the next few hours were chaotic, with nearly all of OpenAI’s staff threatening to resign following the founder’s departure.
Concerns about OpenAI’s role in AI safety and protection were at the center of Altman’s brief ouster from the company.
Despite Microsoft’s huge investment in the startup, the tech giant had neither a seat on the board nor a say in Altman’s firing.
Within days, Altman was reappointed to his original post, amid speculation surrounding the OpenAI drama that dominated the news cycle during Thanksgiving week.
Mr. Altman told an afternoon rally in Davos that “during those crazy few days,” roughly 98% of the company signed a letter saying that Mr. Altman would resign unless he was reinstated as CEO. Ta.
“It would have burned everyone’s assets, and for many employees this is all or most of their assets, so it’s highly unusual that people would be willing to do that. I think so,” Altman said of his team. Additionally, OpenAI’s investors, including Microsoft, were also looking to see their stakes drop to zero, he added.
“We want all of our shareholders to make a lot of money, but it was very clear to me what people’s priorities were,” Altman said of uniting employees and investors.
Mr. Altman, who has declined countless invitations from reporters to comment on his abrupt firing and rehiring, questioned the host about pursuing the line of questioning in the first place.
“teeth [this] Do we really want to spend our time on something like this soap opera instead of what AGI is trying to do? asked Altman seriously.
When asked if OpenAI would reinvent itself and become a traditional Silicon Valley for-profit company, Altman was adamant that his startup would not go in that direction.
“We will never be a traditional company,” he said. “But I think we need to look at structure, structure. Maybe the answer we have right now is correct, but I think we need to be willing to consider other things.”
Altman added that now is not the time to overhaul the company’s structure. Instead, he focused first on the board, he said.
“I think one of the things that’s hard for us to fix about OpenAI is how committed our team and the people around us are to this mission, including investing in us,” Altman said. Ta.
— CNBC’s Rohan Goswami contributed to this report.
