OpenAI’s future remains uncertain after extraordinary efforts by employees and investors to oust the board failed to convince its directors to resign and bring back co-founder Sam Altman.
By the end of Monday, 747 of OpenAI’s 770 employees had signed a letter threatening to resign and join Microsoft if the three holdout managers refused to resign and reversed their decision to fire Altman on Friday, according to people with direct knowledge of the matter. .
Meanwhile, venture capitalists backing the generative AI startup have swung behind employee demands and were exploring legal measures to force the board to reverse course, according to several people familiar with their thinking. “Legal action could come as soon as tomorrow,” said one person at a venture fund invested in OpenAI, without specifying what form that action would take.
But the board remained firm and was willing to test employees’ willingness to resign, according to a person with direct knowledge of negotiations between employees and board members. In their letter, the employees said the directors “undermined our mission and our company” in the way they fired Altman and stripped his co-founder Greg Brockman of his board position. Brockman subsequently left the company.
Ilya Sutskever, the last remaining co-founder on the board and chief scientist at OpenAI, signed the letter from employees after he apologized on social media for his role in Altman’s firing, without saying he would leave the board. He came under increasing pressure from staff to reverse his position over the weekend, according to people familiar with the situation.
Altman’s dismissal caused the most famous startup in Silicon Valley to slide into a deep crisis with no clear solution. OpenAI has been at the forefront of the boom in artificial intelligence, which many consider the most important technological breakthrough since the advent of the smartphone or the creation of the Internet.
It has also presented a business opportunity for competing AI companies affected by OpenAI’s release of its wildly popular chatbot ChatGPT last year. On Monday, companies including Anthropic and Cohere were dealing with an uptick in interest from OpenAI customers looking to hedge their bets in case the startup continues to harden, according to people with direct knowledge of the matter. Competitors have also been “crawling all over” employees at OpenAI in an attempt to lure talented researchers away, according to one of the startup’s investors.
In a social media post on Monday, Marc Benioff, CEO of software company Salesforce, asked OpenAI researchers to send him their resumes and offered him the equivalent of their salaries. Mustafa Soliman, founder of AI startup Inflection, posted that events at OpenAI were “very sad” but that his company was expanding. “Come run with us!” he added.
In their letter, employees threatened to leave the company “imminently” if the board did not reverse course. Microsoft on Sunday committed to hiring Altman, Brockman and any other OpenAI employees who choose to join them in a new AI research subsidiary.
Aside from Sutskever, OpenAI’s directors are Adam D’Angelo, CEO of question and answer service Quora, technology entrepreneur Tasha McCauley, and Helen Toner of the Center for Security and Emerging Technology at Georgetown University.
On Sunday night, they snubbed Altman, who reappeared at OpenAI headquarters, and appointed Emmett Sherr, co-founder of the video streaming service Twitch, as interim CEO. He replaces Mira Moratti, the chief technology officer who was promoted to interim CEO on Friday. By Monday afternoon, Vinod Khosla, an early investor in OpenAI, called on Scheer to resign.
As the two sides stick together, Altman’s main backer, Microsoft CEO Satya Nadella, said he would stand by the OpenAI co-founder. In radio interviews on Monday, Nadella said he couldn’t say who would be CEO Tuesday morning, but that he would continue to support Altman whether he returns to OpenAI or works internally at Microsoft. The software giant has been OpenAI’s biggest backer, providing hardware support and a series of investments.
Nadella said the 38-year-old entrepreneur will be able to pursue his side projects while working at Microsoft. Altman has a nuclear fission project and a cryptocurrency project, and has sought to start a hardware company and a chip company, according to people familiar with the matter. “We will work through the governance aspects of it,” Nadella said.
Ibrahim Ajami, head of ventures at Mubadala Capital, part of Mubadala Investment Company, a $284 billion Abu Dhabi sovereign wealth fund, said the chaos at OpenAI highlighted why these companies are “difficult to underwrite today.” Mubadala has a partnership with Microsoft but has not invested in OpenAI.
“As long-term investors, we value companies for their customers, deep partnerships, talent, and a defensible moat over the long term,” he said. “Where does this all fall today with OpenAI?”
Additional reporting from Camilla Hodgson in San Francisco