OpenAI board fires influential CEO Sam Altman with ease

In a surprising move, OpenAI's board of directors fired Sam Altman, the CEO and creator of the popular chatbot ChatGPT. The decision came as a shock to investors and the tech industry as a whole. The board cited a lack of confidence in Altman's ability to lead the company as the reason for his dismissal.

What is particularly notable about this development is that the board did not provide any advance notice to its investors, including major shareholder Microsoft. Microsoft has invested over $10 billion in OpenAI and reportedly owns up to 49% of the company. This lack of communication has raised concerns about the governance model of OpenAI.

Some industry figures, such as Yahoo's former CEO Marissa Mayer, have criticized OpenAI's governance model, calling it "crazy" and blaming it for Altman's abrupt removal. Mayer also accused the board of being "broken and underadvised." It seems that the board's actions have not been well received by industry insiders.

OpenAI's unique structure may have played a role in these events. The company was founded as a non-profit organization in 2015, with a focus on developing responsible and beneficial AI technology for the public. In 2019, OpenAI created a capped-profit company, OpenAI LP, to raise investments while limiting profits. This structure may have contributed to Altman's vulnerability, as most board members do not own shares in the company, and Altman himself chose not to take any equity.

This stands in contrast to companies like Google and Meta, where founders like Mark Zuckerberg have greater control and are virtually unfireable due to dual-class stock structures. Altman's decision to forego equity in OpenAI may have been inspired by a desire to prioritize the company's goals of changing the world over personal financial gain.

Overall, the dismissal of Sam Altman from OpenAI has raised questions about the company's governance model and the decision-making process of its board of directors. The lack of communication with shareholders, including Microsoft, has further fueled criticism. It remains to be seen how this will impact OpenAI's future and its reputation in the tech industry.


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