Sam Altman’s firing affects the future of OpenAI

Sam Altman: CEO of OpenAI Inc. When AI Meets Silicon Valley Investors: The Challenges of Steady-State

Sam Altman always insisted that he wasn’t the most important person at OpenAI despite being its CEO. As he traveled the world this year meeting world leaders—the world’s unofficial ambassador of AI—Altman would soft-pedal his role, even as he stole glances at his phone to keep up with what was happening in OpenAI’s luxe San Francisco offices.

“We have an incredibly great team here that can do a lot of things, so mostly, I defer to them,” he told me in May when I asked him how the company ran in his absence. There are some things a CEO can do, like HR or a project with a major partner, that only a CEO can do. Those items would accumulate on his phone and at the end of the day he’d bat out responses. He would return to speechifying, meet the developers and have some tea with the prime ministers.

One of the sources says some investors had previously feared OpenAI’s remaining independent directors—with little background in corporate governance—could end up failing in their oversight duties. Less thought was given to the possibility of aggressive action like that taken against Altman. “I never expected them to be activists,” the person says.

It was difficult Sunday to get the current directors to choose replacements for the board because they had a conflict of interest.

The 11-page bylaws OpenAI Inc. established in January 2016 give board members the exclusive right to elect and remove fellow directors and also to determine the board’s size. If a majority of the board provide written consent, a majority of the board can take any action without prior notice.

Nathan Benaich, general partner of Air Street Capital and coauthor of the “State of AI Report,” says OpenAI’s corporate structure has proven to be at odds with the need to support cutting-edge research through huge amounts of equity investment. He says that it appears that physics won out in the experiment.

When Sam Altman, Elon Musk, and other investors formed the startup behind ChatGPT as a US not-for-profit organization in 2015, Altman told Vanity Fair he had very little experience with nonprofits. He said he was not sure how it would go.

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