Sam Altman just got fired from OpenAI by the Board. Microsoft and other investors are trying to reinstate him.

Yes, the father of ChatGPT just got fired by the board of OpenAI. Here’s what the board OpenAI announced regarding his firing

“He was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI.”

They are saying Sam lied during board meetings and they don’t want him to lead the company anymore. But it isn’t entirely clear what this is about. The board currently consists of Chief Scientist, Ilya Sutskever, Quora CEO Adam D’Angelo, Tasha McCauley, Helen Toner of Georgetown Center for Security and Emerging Technology and Greg Brockman. It seems like Greg is on Sam’s side as he resigned from his chairman position and publicly criticized the board’s decision.

As of 20 November 2023, Microsoft has been trying to get Sam reinstated as the CEO of OpenAI but that has faded with the appointment of Emmett Shear (former executive of Twitter) as interim CEO. However, that decision seems to have cost the board also as they have agreed in principle to vacate their board positions. Microsoft and other investors for OpenAI are now looking for new board members instead.

My view is that this looks like a messy power struggle splatted all over the media and public. Sam has been critical of the need to regulate the very AI industry he pioneered in his public engagements, and I think that has ruffled some feathers on the board. For context, OpenAI started as a non-profit enterprise initially supported by the likes of Peter Thiel and Elon Musk. However, interest in the technology has boomed so much that OpenAI is moving towards a profit-oriented objective.

I do think the crux of the power struggle lies with this commercial viability. It could be that Sam is seeking regulations with authorities that could cripple the very commercial objectives of the company, and the board is intervening to prevent those decisions from being passed through.

Why it matters to you: The developments in OpenAI are directly related to big companies such as Microsoft, which has dropped by 1.7% on 17 November 2023. This will also impact other AI-related stocks.