| Takeaway | Summary |
|---|---|
| Reinstatement of Sam Altman as CEO | Altman was reinstated as OpenAI CEO after pressure from employees and investors. The board that removed him resigned and a new board was appointed, including Bret Taylor as Chairman. |
| Shock at Initial Removal | Altman’s initial removal shocked many and drew comparisons to Steve Jobs’ 1985 ouster from Apple. Prominent Silicon Valley figures advocated for Altman’s return. |
| Role of Microsoft | Microsoft, a major OpenAI investor and partner, played a key role in getting Altman reinstated. Microsoft CEO Satya Nadella expressed dismay at Altman’s removal and worked with him on a new AI lab. |
Sam Altman has been announced as the reinstated CEO of OpenAI, as confirmed by the startup on X post, formerly known as Twitter, in the early hours of Wednesday. This decision comes in response to significant pressure exerted by employees and investors on the board that recently removed him from his position.
OpenAI, backed by Microsoft, has also appointed former co-CEO of Salesforce, Bret Taylor, and former Treasury Secretary, Larry Summers, to join its board. Taylor will assume the role of Chairman. Furthermore, Adam D’Angelo, the co-founder and CEO of the question-and-answer platform Quora, will continue serving on the board.
“We are collaborating to figure out the details. Thank you so much for your patience through this,” OpenAI stated in the X post.
In response to a letter signed by numerous employees, including co-founder and board member Ilya Sutskever, expressing their demand for the board’s resignation and the reinstatement of Sam Altman as CEO, Microsoft’s CEO Satya Nadella made an announcement on X on Monday. Nadella revealed that Altman, along with his co-founder Greg Brockman, would be joining Microsoft to establish a new AI lab.
Prior to this, OpenAI had made public late Sunday that ex-Twitch CEO Emmett Shear would act as Altman’s temporary replacement. The board initially intended for OpenAI technology chief Mira Murati to assume the role, but she later joined the chorus of employees advocating for Altman’s return.
In his own X post, Altman expressed his enthusiasm for his anticipated return to OpenAI, stating, “with the new board and w satya’s support, i’m looking forward to returning to openai, and building on our strong partnership with msft,””
Nadella expressed his commendation for the changes implemented by OpenAI to its board in his X post.
“We believe this is a first essential step on a path to more stable, well-informed, and effective governance,” wrote Nadella. “Sam, Greg, and I have talked and agreed they have a key role to play along with the OAI leadership team in ensuring OAI continues to thrive and build on its mission. We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners.”
The possibility of Altman’s prompt reinstatement gained momentum on Saturday when reports emerged that a prominent group of investors, including Microsoft, Tiger Global, Thrive Capital, and Sequoia Capital, were working towards reversing the board’s decision made just a day prior. Although these firms did not have board seats, they were caught off guard by the sudden ruling.
In a late Saturday night post on X, Altman expressed his profound appreciation for the OpenAI team, stating, “i love the openai team so much.” Brockman, who had resigned from the company after being removed as chairman along with Altman, shared Altman’s sentiment by reposting the comment accompanied by a heart symbol. Many other OpenAI employees echoed this sentiment.
This year, OpenAI, which had reportedly been engaged in discussions as recently as last month regarding selling employee shares to investors at a valuation of $86 billion, emerged as the most buzzworthy startup in the industry. Their release of the ChatGPT chatbot in late 2022 garnered significant attention. ChatGPT enables users to input simple text queries and receive intelligent, creative responses, fostering more comprehensive conversations.
Since 2019, Altman had spearheaded the company, holding dual roles as the principal executive of a rapidly growing organization and a prominent figure in artificial intelligence research and product development.
Unlike the conventional structure of Silicon Valley startups, OpenAI deviated from the norm by adopting a nonprofit model when it was established in 2015. Consequently, it operated without the typical distribution of equity concentrated in the hands of the founders. The board, highlighted in the blog post published on Friday, assumes the role of overseeing the nonprofit and serves as the comprehensive governing body for all OpenAI endeavors.
Both Sutskever and Brockman played integral roles in OpenAI’s inception as part of the founding team. Noteworthy original investors included Altman, Reid Hoffman (LinkedIn co-founder), and Elon Musk (CEO of Tesla), who reportedly made a substantial commitment of $1 billion towards the project.
Sharing his excitement, Brockman stated in an X post on the early morning of Wednesday, “Returning to OpenAI & getting back to coding tonight.”
Following OpenAI’s board’s abrupt decision to terminate Altman, several prominent investors and founders within the Silicon Valley community expressed their strong concerns, drawing comparisons to Apple’s momentous choice 38 years ago to dismiss Steve Jobs. In 1997, Jobs made a triumphant return to Apple, ultimately leading the company to create the iPhone and become the most valuable company in the United States.
Ron Conway, a longstanding investor in startups, voiced his astonishment and disappointment in an X post, stating, “What happened at OpenAI today is a Board coup that we have not seen the likes of since 1985 when the then-Apple board pushed out Steve Jobs, it is shocking; it is irresponsible; and it does not do right by Sam & Greg or all the builders in OpenAI.”
Eric Schmidt, former CEO of Google, affectionately referred to Altman as a personal hero who founded a company that “forever changed our collective world.” Brian Chesky, CEO of Airbnb, lauded Altman as one of the most exceptional founders of his generation, while venture capitalist Vinod Khosla dubbed him a CEO of unparalleled caliber.
The announcement reportedly took Nadella by surprise, and he expressed his dismay. Microsoft, a close technology partner and sizable investor in OpenAI, has invested billions of dollars and hosts substantial GPT workloads on its Azure cloud infrastructure.
Emmett Shear, the interim replacement for Altman, expressed his satisfaction with the resolution in an X post on the early morning of Wednesday, stating, “This was the pathway that maximized safety alongside doing right by all stakeholders involved. I’m glad to have been a part of the solution.”
