UPDATES on Sam Altman Ousted from OpenAI & Meet the Board

Sam Altman, co-founder and CEO of OpenAI, has been ousted by his board. Greg Brockman, chairman of the board, also a co-founder of OpenAI, left in solidarity with him.

One of the craziest stories in tech to happen, in quite some time, is playing out in real time. I posted an update about it yesterday. Well, we have more information now. And though we have more information, this story has become perhaps no less baffling than it was.

So let's dive into everything that has happened in the last, I don't know, 15 hours since yesterday's episode and what the current theories are as to what the heck has happened.

Okay. Yesterday when we spoke, it was still a little up in the air, what this whole thing was even really about. And while there are still questions around that, what has become somewhat clear is that this was a business/communications dispute between Sam and the board.

This was not about something personal in Sam's life. This was business. And also, everyone was blindsided. I mean, everyone.

Microsoft, who has invested $13 billion in OpenAI, did not know until a minute before the announcement was made public, that Sam was being ousted. This, despite the fact that Sam had spent lots of time with Satya Nadella, the CEO of Microsoft, I believe as early as last week.

Microsoft did put out a statement saying that the relationship with OpenAI was stable, that they believed in the company. And yet Kara Swisher has reported that behind the scenes, they are not happy.

There was this very funny tweet by Chris Bakke. It's a screenshot of Roman from succession, with the caption:

"Satya Nadella learning from his lawyers that despite investing $13 billion into OpenAI, they have zero information rights, or say, in the day-to-day management and will continue to get their information on X like the rest of us,".

Since I reported on this yesterday, we also got a statement from Sam Altman and Greg Brockman. This was a joint statement they made around midnight of last night, this is Eastern time, Friday night. Greg said, "Sam and I are shocked, and saddened, by what the board did today,". They went on to thank everybody they worked with an OpenAI. They said they were still trying to process what had even happened.

This was their version of events:

Apparently, Sam got a text from Ilya. That is the chief scientist at OpenAI who is very central to the story, it turns out, so we'll talk more about him in just a moment. Sam got a text from Ilya to talk at noon on Friday. So that was yesterday. He got this text Thursday night. Sam joined a Google Meet, best part of the story for what it's worth is that this Microsoft owned company doesn't even use Teams. Like nobody wants to use Teams. They use Google Meet. And Ilya informed Sam he was being fired and that the news was going out very soon.

15 minutes later, Greg, Greg Brockman, who is chairman of the board, got a text asking him for a call. He joined and was told that he was being removed from the board, that Sam had been fired. And a few minutes later, essentially, the announcement, the blog post went out saying that this had happened.

They also said, Greg said in the statement that as far as they know, the rest of senior management at OpenAI was not informed about this before the news went out with the exception of Mira Marati, who was named the new interim CEO. She had been this chief technology officer at OpenAI. She has been the chief technology officer at OpenAI. She apparently was informed the night before of all of this, but the rest of the management team was left just as blindsided literally as the rest of the world and as Microsoft and Sequoia and other players in this.

Greg Brockman closed this message or this joint statement of him and Sam saying, "Thank you for the outpouring of support. Don't be concerned. We will be fine. Greater things coming soon,".

So the way that this has happened is wild. And I think there are really two theories forming as far as I can see, which is you have a cohort of people saying something serious must have happened. Right? Sam must, there must have been some inciting incidents that led the board to make this decision seemingly so swiftly without giving any of the requisite heads up. I mean, Microsoft really should have had at least 24 hours notice of this, if not days of notice of this.

So you have folks like Kevin Roosw, who's the New York Times tech reporter, going on hard for his podcast saying like, something doesn't add up. Something must have happened. I mean, Sam Altman is somebody who has created $90 billion of value in this company. I mean, what he has done is, is pretty staggering and he's a well liked and respected CEO by his team.

Scott Galloway, echoing these sentiments, being like boards don't just make the decision to A, get rid of a CEO who is by a lot of measures doing this well. And B, throw shots at him as he leaves the company. This is something we talked about yesterday, but the language that the board released here was, was pretty harsh as far as board language comes. I mean, it says that "He was not candid in his communications with the board," that they "no longer had confidence in his ability to run OpenAI,".

Those are strong statements that were being made by the board. So you have folks saying, like, something serious must have happened here.

And then you have another cohort of people that are saying, or this board is incompetent, or at a minimum, minimum inexperienced.

So let's talk a little bit more about who is on this board that made this decision, this major decision.

Okay. First up, you have Greg Brockman and Sam Altman. They were both on the board. They of course constitute this, this one cohort that clearly is, was not in cahoots on this decision and was not in agreement with this decision. And they have now both of course, left the company.

You have Ilya Sutskever, not sure if I'm pronouncing that last name right. But he is really emerging as the central figure in all of this. I mentioned him earlier. He is the chief scientist at OpenAI. He was recruited actually by Elon Musk. At one point, Elon had gone on the Lex Friedman podcast and talked about Ilya and the lengths that Elon went to, to recruit Ilya, who is, you know, by, by all accounts of brilliant individual, but he seems to have been really leading this charge to oust Sam.

Now, again, we don't know exactly what's going on, but it seems to me that there was some really fundamental disagreement around the direction of this company and. specifically. around how for profit or not for profit it should be. And I talked about this a bit yesterday; this is this very strange company that has both a nonprofit entity, but it's also this strange hybrid where there's a for profit component to it now, though their profits are capped. I mean, it's a, it's a really weird beast of a corporate entity.

And there have long been debates about where the line should be drawn between it being a for profit and a not for profit. And so seemingly Greg and Sam were the entrepreneurs who wanted to move fast, who wanted to move more in the for profit direction, wanted to ship new products, et cetera, et cetera. Whereas folks like Ilya wanted this to be slower, more thoughtful, more researched, et cetera, et cetera.

Okay. Also on the board, you have Adam D'Angelo, who is the founder of Quora, the, the website Quora. You have Tasha McCauley, who... This is fascinating to me. She seems to get reported as a quote, tech entrepreneur, which just seems like an astoundingly vague description for somebody who was on the board of such a major company, one of the most important company companies, arguably of the last decade, arguably of this generation, certainly of the last five years.

OpenAI is just, is incredibly impactful and important.

And this woman gets reported as like a tech entrepreneur, which sounds like the kind of thing you put in your Tinder profile if you are unemployed.

Digging a little deeper though, she is not unemployed. She, well, she's currently, I guess the adjunct senior management scientist at Rand Corporation, but for the past many years, she was the CEO of GeoSim Systems, which is also a company she co-founded. This is a geospatial technology startup where she served as the CEO. As I said. She is also married to Joseph Gordon Levitt, which is interesting.

And then the last piece of information about her is she seems to be in some way affiliated with Effective Sltruism. We can, we in the tech world cannot get away from two things, men named Sam and Effective Altruism.

And this woman is on the UK board of the Effective Ventures Foundation, which is apparently the parent organization for the Center of Effective Altruism. Now this isn't entirely surprising in the sense that Effective Altruists tend to be very concerned about the AI risks.

This is something that they are somewhat focused on. Sam Bankman Freed is worried about this. And so, not entirely surprising that she and, I think even other board members, were interested in, or affiliated with, Effective Altruism.

But of course it has been a, it's been a bad year for Effective Altruists. Finally, we have Helen Toner who was on this board, and she was the Director, she is the Director of Strategy and Foundational Research grants at Georgetown's Center for Security and Emerging Technology.

And that's it. I mean, this is a very small board, all things considered, and it's filled with a lot of people who, in the scheme of things, don't necessarily have a ton of business operational experience. So I think this is emerging as one of the leading critiques of the board for folks who lean more toward this theory that, maybe this is an issue with this board. It'ss like, you have a bunch of researchers and academics and, and maybe ideologues who wanted a very slow paced, slow growth, measured, but some might argue an effective way of growing and leading this company.

And then you had Sam Altman and Greg Brockman. Two entrepreneurs, I mean, Sam Altman is the epitome of move back fast and break things. He ran Y Combinator, which is like the accelerator known for: get it done, get it done quickly, get feedback fast, pivot quickly, like that vein of entrepreneurship.

Now, Axios has reported something very interesting here, which is that they, I guess, got a, they got their hands on an internal memo written by Brad Lightcap, who is currently the COO of OpenAI. And according to this internal memo by Brad, he said that Sam Altman's firing as OpenAI CEO was not the result of malfeasance or anything related to our financial, business, safety or security and privacy practices, but rather that it was a breakdown in communications between Sam Altman and the board.

Now this is interesting. I said yesterday that one of the theories that was out there, was that there had been some sort of security or privacy concerns in a product, or products, that were rolled out at OpenAI's developer Day, a couple of weeks ago. And that perhaps that was at the heart of this.

This internal memo from Brad seems to suggest that's not the case.

This was truly a communications breakdown between the board and Sam and, perhap that communication breakdown is this ideological dispute about the direction of the company. Or perhaps there was very, some very specific inciting incident, where Sam lied to the board in some way, or misled the board in their own opinion. And so that had led to things.

Again, we really don't know still.

I will say again, a very funny tweet by Chris Bakke here: "I'm starting to think that a nonprofit that splits into one, a single member Delaware LLC controlled by a nonprofit, and two, a capped for-profit organization, which is governed by a foundation, but is really managed by Microsoft, who is a single member sugar daddy, but is actually super duper secretly governed by an actor's wife, the CEO of an Answers site that peaked in 2010, a guy who hates technology and a grad student who loves China, is just the wrong structure to build a hundred billion dollar company,".

Yeah. And this actually will lead us to the final piece of speculation here, which is: many are saying that they expect Sam and Brockman will, as soon as this coming week, announced that they have a new company and that they have basically recruited, or poached, all of the best talent from OpenAI, or elsewhere, to build this new company that will move just as fast as they want it to. And, and that this is a real threat, frankly, to, to OpenAI.

And, I will say for people who are saying like: 'There, there has to be something going on here,'. Like one of these arguments I've heard is like 'boards don't just oust CEOs who have created this much value for a company.'. I think that assumes that this is a normal board that cares about a normal kind of corporate value creation.

And I don't know that that's what we have here, right? I mean, this was a company that was founded with this core mission of building AI for the public interest.

And I think you have a board that is made up of people who are very concerned about the ramifications of AI and who are not necessarily concerned as much with profit.

In any case, this is a crazy story that just keeps getting crazier. You either have one of the most respected and, by a lot of metrics, successful corporate tech CEOs, in the world, being ousted by his board, having made some major misstep to lead him to be ousted by a board, or you have a board that is incompetent and inexperienced such that they let go of a major driver of their company's success and did it in a fairly unprofessional way.

There are versions in the middle of that too, but those are two of the options here, which is just a story that doesn't come around all that often.

Also, if you are interested in learning more about AI in general, in a fun way, my friend Gavin Purcell hosts a podcast called 'AI for Humans' with a guy named Kevin Pereira, and they make it fun. They make it like they interview people like Kevin Roost in New York Times tech columnists, but they also run fun experiments with AI all the time. So it's kind of a fun way to learn about this. I'll link to it below. It's a podcast. They also post on YouTube. So if anybody wants to go check that out and learn a little bit more.

All right, folks, that is our episode for today. I will probably not be back tomorrow unless something really major breaks. I'll take a day off, but very well, maybe talking about this still on Monday, because this is truly just one of the wildest stories that has come out of tech in a long time.

All right. Let me know in the comments what you think. If you are team Sam on this, if you are team, the board on this, if you just don't really understand what's happening in general, like the rest of us. And I really appreciate you tuning in. I will see y'all on Monday.