Does anybody know who is currently CEO of OpenAI? Friday, Sam. Saturday, Mira. Sunday was a day off, Monday it was Emmet so who is it for today?
Kidding aside, the board is under more and more pressure but - surprisingly - they haven't folded yet. I am interpreting that as that they are trying to get something out of it that nobody is willing to give them. The new CEO is also surprisingly not to be found at all, no public statements, nothing to reassure employees that the ship is in good hands. Not the best showing for a captain of a ship in crisis.
I don’t think the board is under any pressure. If they don’t do anything else they just need the employees to fold on their threat to resign. Even if the employees resign, ChatGPT is still running and there are lots of people willing to take the defecting employees spots.
The only thing they are pressured on is to fill in the story for the media point of view which is irrelevant to the actual functioning of OpenAI.
These words are gonna get ate one way or another. There is no outcome where the current board wins.
Emmet is already threatening the board with resignation unless they provide evidence of wrongdoing [1]. Which they don't have, because they would have revealed it already.
Why? The board announced the removal of a CEO which they have the power to do. It upset a bunch of employees who liked the CEO. The board is in search of a new CEO.
OpenAI’s valuation isn’t because Sam Altman is worth $90B it’s the tech. The tech is fine. Investors have no reason to worry about their investment in the tech.
The people under pressure are Sam Altman trying to reclaim his job he was fired from and Satya Nadella who is running a campaign to eat OpenAI. None of that is related to the functioning tech of OpenAI, all of it is related to the drama of what happened. Drama is not equal to money.
I was sad when my favorite pet died too, but then eventually you get a new pet that’s just as good as a Worldcoin guy, maybe better.
> The board announced the removal of a CEO which they have the power to do.
They have the power to remove him momentarily, do they have the power to keep him out? we're still finding out.
> OpenAI’s valuation isn’t because Sam Altman is worth $90B it’s the tech.
OpenAI's valuation is nominally because of the tech. It's fundamentally because of the people. 90% of the staff is threatening to follow Sam to $MS so that's the whole ball game. They went to OpenAI to make themselves rich. The board fired the guy that was trying to do that for them.
> I was sad when my favorite pet died too, but then eventually you get a new pet that’s just as good as a Worldcoin guy, maybe better.
Doesn't matter if you or I am sad. It only matters if the talent at OpenAI is sad. The board made them sad. Sam and Sataya make them happy.
About the 90%, this is very much a game of musical chairs and game theory in general. If your perception is that there is a high likelihood that Altman might return it's prudent to sign the letter. That's why I think the past few days were about shaping a narrative on Twitter and in the media in general.
If it’s fundamentally about the people, can you name some of these 90% that OpenAI couldn’t live without? Other than Ilya? From where I’m sitting the 90% are replaceable in a flooded market of available software engineers.
If Satya and Sam make them happy then go work for Microsoft. The board is calling their bluff right now.
> From where I’m sitting the 90% are replaceable in a flooded market of available software engineers.
The market is flooded with junior engineers who have recently graduated from coding boot camps, and who might be good at building the specific types of software they have been shown. However, there is, as I understand it, still a dearth of senior engineers who can do the sort of work that OpenAI engineers are doing: building a novel product, with novel, cutting edge algorithms, at massive scale.
If lots of people could easily replicate OpenAI’s product, it seems strange that has nobody released a competitor to gpt4. Why is Microsoft - a company with one of the largest pools of software engineers in the world - clambering to hire all the engineers at OpenAI?
It’s because those people aren’t replaceable. There is probably a global pool of maybe ten thousand people who can do the work that OpenAI is doing. And OpenAI has assembled a high performance team of ~800 of them. Those people are currently worth their weight in gold.
It is not flooded with junior engineers, it's engineers of all skill levels. I happen to know as someone who is senior looking for work right now. Most of the open positions are for senior and staff level positions.
Microsoft isn't clambering to hire them, they're clambering for the IP. The OpenAI employees will get significantly less if they go over to Microsoft.
> Most of the open positions are for senior and staff level positions.
So what you're saying is that companies are struggling to find qualified senior and staff level engineers to fill their open roles? Doesn't sound like a flooded market to me.
Do you think they hired those people because they're useless?
> The board is calling their bluff right now
The board is not doing much of anything. They picked a CEO then she went to team sam. Then they picked another CEO and now he's threatening them with resignation. Not to mention the 3 other people they tried to bring into the role who refused.
No I think they hired them because they can do the job the agreed to pay them. I don’t think these people are irreplaceable, that would be silly. That’s what Sam Altman wants you to think.
> I don’t think these people are irreplaceable, that would be silly.
Maybe go and spend some time to bone up on who exactly works for OpenAI, what their track record is (education, publications and so on) and then tell me where you are going to find another 700 people that talented who will want to work for a company this damaged.
I can't name them, no, but they're the people who built the thing that is being valued 90B. If they migrate (leadership included), so does the potential for future value. My feeling is that the 90B are moving. Sure, IP, existing contracts, licensing, you name it, will have residual value - but if I consider its board a clown car I will refrain from building on top of its API because they might not be around by lunchtime tomorrow. Enough people think like this, it starts spiraling down the drain.
Do you know the board is a clown car or is that what the media surrounding “the chaos” has told you. The board has been quiet is all. Does that automatically mean they’re in the back flushing documents down the toilet and juggling balls? Or is there a better reason they feel no reason to publicly respond to a bunch of media flurry?
> OpenAI’s valuation isn’t because Sam Altman is worth $90B it’s the tech. The tech is fine. Investors have no reason to worry about their investment in the tech.
The following story is only about an hour old, but the investors are reportedly considering legal action against the board:
Technology is not made out of thin air but it is made - and maintained - by people; and when 500 out of 700 people threaten to quit on the spot and leave for competitors, or for Microsoft, investors might not be happy at all.
> OpenAI’s valuation isn’t because Sam Altman is worth $90B it’s the tech.
The IP might be worth something (no idea what kind of patents they hold), but the valuation is fundamentally based on the current products they have and promise of future tech the company can create. And the future value stream far outweighs the current product.
And none of the future product is going to happen without people.
Of course, OpenAI without Sam will hire new people. But if they have already hired the best and they already had worthwhile experience, hiring new people has almost zero chance to recreate their ability to create new products at least in short/medium term.
Finding the right people and hiring them is far more difficult than it is assumed. Dropping money on the problem does not solve more than half of it.
"It upset a bunch of employees. The tech is fine". Uhmm, it upset 98% (not figuratively, but mathematically) of all 700 employees who signed a petition to quit unless he's reinstated and for the board to resign. As for the tech... who... exactly do you think created, maintains and is developing future enhancement for the tech? Is it doing it by itself? Sorry, we're not there yet.
I think one lesson we learned from Twitter is that you can cull a large amount of a tech workforce and the product will keep humming along, albeit at a reduced rate of change.
Also, unlike Twitter, OpenAI pays engineers very competitive salaries and can aggressively re-hire roles.
Twitter seemed to be adult daycare with a HUGE amount of positions that openly did nothing all day, many many positing publicly about how they only actually worked a few hours a week. Along with a Huge business support staff that seemed to really be pointless
I do not see that analog at OpenAI which has mainly engineering positions.
Also the idea that you just just "aggressively re-hire role" engineering positions in a emergent field like AI seems to be bit naive to me. How many experience people outside OpenAI are their int he first place??
It seems to me to be very ironic that in other situations is seems to be common for people to hate on corporations that treat their employees like interchangeable widgets that can just be replaced on a dime with a new human, yet here we see people claim that exact thing. Very odd
There is no comparison between the cadre at Twitter and and the talent pool at OpenAI, I don't think you can replace the bulk of them at all, and nobody worth that kind of compensation is going to touch OpenAI with a 100 foot pole as long as the current board is there.
Twitter is a very different animal. A twitter clone can be thrown together over a weekend with average web stack coders, making it scalable is a bit more work true but nothing fundamentally new or revolutionary. OpenAI on the other hand is working on new, challenging hard problems in a complex feild of math/computer science.
You learned the wrong lesson. Twitter is dying and operating at a significantly degraded level, including moderation, content filtering, ad positioning, which caused a third or fourth mass advertiser exodus just few days ago.
Also. Leading the world in revolutionary AI is not exactly like maintaining a pre-existing message app.
Twitter:
- Had 7500 employees before Musk fired most of them.
- Now 1300, of which 550 are full-time devs.
- That's a company valuated at less than $16 billion currently, and losing about $2 billion a year.
OpenAI:
- Has 700 employees, including world-leading scientists and researchers that are practically irreplaceable.
- If they resign, it'll have 14 employees.
- For a company that before Sam Altman was fired was valuated at $90 billion.
> Uhmm, it upset 98% (not figuratively, but mathematically) of all 700 employees who signed a petition to quit unless he's reinstated and for the board to resign.
And they have yet to leave as far as I know. Seems like no one is in an actual hurry to quit.
Sam Altman is currently talking to the board. You want them to spin up drama by quitting in the middle of the talks? You're trying too hard to copy paste your desired narrative on this and it fits so, so, so poorly.
If Sam comes back it’ll be under heavy changes. The board isn’t going to leave. You don’t get ousted and then get to call the shots, no matter how many employees you think you have on your side. Furthermore the fact that Sam is in talks is further proof that he won’t be coming back on his terms. As the board why would you fold to the employees just because they like a guy?
Sorry to be blunt, but literally everything you said so far was nonsense, so I'll understand your opinion as a sign that Sam Altman will come back and the board will resign.
"We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new initial board of Bret Taylor (Chair), Larry Summers, and Adam D'Angelo.
We are collaborating to figure out the details. Thank you so much for your patience through this."
Sure if you’re one of the first names to sign. But let’s say most of the company has signed, you earn a 19-bit salary, there’s now a good chance that this guy will come back and be your boss again. Are you really going to refuse to sign and withhold your support for him? No way.
According to Stratechery, Microsoft does not just have the rights to use the source code and model weights for GPT-3.5 and GPT-4, but a clause saying that Microsoft could not use the models as foundations for their own projects was recently removed.
> Investors have no reason to worry about their investment in the tech.
If Stratechery is correct, this means that if Microsoft successfully poaches Sam Altman and friends, and vacuums OpenAI clean of talent, they will even be able to use the actual GPT-4 to build a Microsoft GPT-5. That should make investors sweat. If you lose the people and (possibly) the technology, what's left?
Yeah okay Microsoft poaches them but they still have to restart building everything from scratch which wouldn’t benefit Microsoft. Microsoft doesn’t want to poach talent, they can always do that with or without this incident. Microsoft wants the whole bundle. Hence the media campaign Satya is doing.
That only happens if Microsoft acquires all of OpenAI, not if they just poach the employees. Poaching means starting again even if they have the road map in their head.
"Microsoft’s original agreement with OpenAI also barred Microsoft from pursuing AGI based on OpenAI tech on its own; my understanding is that this clause was removed in the most recent agreement."
(It's hidden under a citation bubble you need to click after the third paragraph.)
I see. Pursuing AGI sounds distinct from commercializing future versions of ChatGPT based on OpenAI IP. I imagine the exact legal wording in the contract makes all the difference.
The WSJ article from June he cited indicates the license still comes with restrictions.
They claimed to remove the CEO with cause. They have not provided cause. Even the twitch dude is asking for the cause.
The board just firing off half-cocked and then going silent is probably a larger source the issues for employees than altman the person/leader. There is effectively nobody in the driver seat and the board can't be trusted to do anything in the best interests of the company.
Is it the tech that is worth that much or the tech and the people that built the tech when future iterations of the product rely so heavily on the people? Losing 95 percent of the employees will definitely impact delivering future products and that will definitely impact future profits and that has to impact valuation.
Have you ever maintained the software where the original team left? I have. And though it was much less complex and cutting edge than what OpenAI is doing, it was a massive pain with loss of knowledge and time.
Yes I have. I’ve even added features to legacy software and have made that a part of my mentoring to engineers to not reinvent the wheel and be good at reading and understanding code. I don’t think it’s a loss because the company has chosen to invest in that software. I include that time as onboarding for a project.
It's not about what the board can or can not do. It's about whether they can make it stick. I'm thinking they can't but plenty of clever people here on HN think they can. Time will tell.
> OpenAI’s valuation isn’t because Sam Altman is worth $90B it’s the tech.
It's the current AND future tech. If most of the people who made that tech jump ship, that does not bode well for the future development of the technology. Maybe if the tech were something more ordinary, sure, but I think we both agree that it's not. For an investor, the future prospects of the company are generally a lot more important than its present state.
Seeing the amount of employees that are willing to follow him, yes I'd say he is.
If you have a mass exodus of employees, sure you can hire people to maintain ChatGPT 4, but they won't complete a GPT 5 or 6. That valuation is definitely based on the assumption that they will continue advancing AI and that they will consistently stay ahead of competitors for some time. They just axed both of those assumptions.
ChatGPT 4 as the endgame is not worth 90 billion dollars.
I'd be surprised if Sam was by himself, but I wouldn't be at all surprised if some of the people who signed that letter do hold the secret to the next big thing (GPT-5 probably isn't the next big thing; if it exists already it's likely just a nice iterative improvement and not a fundamental change).
> Investors have no reason to worry about their investment in the tech
What? They have a MASSIVE reason to worry: 3/4 board members are clearly not aligned with the profit motive. And D'angelo has a massive conflict of interest with monetizing their models.
are you serious? they're board members of the non-profit... they don't have any shares in the for-profit subsidiary and thus no financial incentive for commercializing the IP
meanwhile, all the employees are paid via a profit sharing scheme. 98% of them are backing Altman because they don't want to see their compensation nuked.
How does ousting Altman nuke compensation? If they keep working there and bring in a new CEO equivalent to Altman with less dishonesty then everyone still wins, except Altman.
In a normal corporation, they would be empty shirts, because ultimately they serve at bequest of the share holders. But this is a non-profit so they actually have a lot of power and don't need to answer to anyone.
They need to comply with any profit-sharing or loan repayments, but funders can't have any control. The only person who would have input into whether or not the board is properly fulfilling its non-profit mission would be the Delaware attorney general.
SERIOUSLY! They all just decided to wake up that day and say let's go fire Sam and blow up the company because "lack of candor" that they can't even give details on?? These are serious people doing serious stuff. These are not idiots. What the heck is going on? Can anyone explain?
That's very well possible but there is as of now no evidence to substantiate that. But that is what it ultimately could have boiled down to and if there is even a remote chance that it can be spun that way you can be sure that chance will be exploited - even if it wasn't originally the case!
My guess, and it is just a guess, is that there's some deep and fundamental position that the board members hold to, which Sam cannot describe well enough to pass the Ideological Turing Test[0], and this failure was perceived as being deliberately dishonest.
Happens a lot. I know some on the very extreme outskirts of the left wing who look at the "splitters!" scene in Life of Brian and see themselves; I've seen it in arguments over programming language features; there's plenty of religious disputes that look like this from the outside; most of the Brexit arguments painted everyone who didn't agree with the speaker as being part of Team Other and merely an attempt to undermine Team Us; and so on.
People can get very seriously angry about things that seem totally pointless from the outside.
Ok, you have a higher threshold for the use of the word pressure than I do.
> If they don’t do anything else they just need the employees to fold on their threat to resign. Even if the employees resign, ChatGPT is still running and there are lots of people willing to take the defecting employees spots.
I wouldn't be so sure of that.
> The only thing they are pressured on is to fill in the story for the media point of view which is irrelevant to the actual functioning of OpenAI.
Their investors, employees and donors might disagree with that.
>> If they don’t do anything else they just need the employees to fold on their threat to resign. Even if the employees resign, ChatGPT is still running and there are lots of people willing to take the defecting employees spots.
>I wouldn't be so sure of that.
What about all those people who just pivoted from web3 to ai?
I am not going to bet against that.
There are only two possible outcomes and neither has Emmet as a CEO.
1, Sam comes back and thus obviously Emmet leaves.
2, Sam does not come back and OAI just dissolves into being a series of drawn out investor lawsuits, something Emmet probably don't want to get involved in.
Given that a bunch of the staff are acting like they're Heavens Gate members you also expect them to sabotage it? Or literally have a flavor-aid session in the office?
> Their investors, employees and donors might disagree with that.
Nobody wants to invest in a personality cult that's sworn an oath of fealty to one guy, dude. That's basically flushing money down the toilet, as this fiasco demonstrates. These lunatics are ready to sacrifice their children on twitter. You cannot work with people like that!
> Nobody wants to invest in a personality cult that's sworn an oath of fealty to one guy, dude. That's basically flushing money down the toilet, as this fiasco demonstrates.
Are you aware that Microsoft and Salesforce CEOs have both offered to hire any OpenAI employees who want to switch boat, while Nvidia CEO and Meta's FAIR team have both made similar but slightly lesser "call me" offers to all of them?
> made similar but slightly lesser "call me" offers to all of them
Sure, it's in their interest to break up a unified bloc of talent. Doesn't mean they genuinely want them.
> ???
The behaviour demonstrated by many of the staff on twitter is, for want of a better word, unhinged. Odd declarations of loyalty. 4am posts. Retweeting hearts. Acting very 'ride or die.' It's weird.
> Sure, it's in their interest to break up a unified bloc of talent. Doesn't mean they genuinely want them.
Doesn't fit. In the scenario where they're all thinking that, nobody has to follow up with the same offer after the first person says it.
> The behaviour demonstrated by many of the staff on twitter is, for want of a better word, unhinged. Odd declarations of loyalty. 4am posts. Retweeting hearts. Acting very 'ride or die.' It's weird.
How is any of that "sacrifice their children on twitter"?
I mean, jeez, this is major drama even for the rest of the tech community — this whole thing is even front-page on the BBC news site as I write — of course the people who work there are going to say things on Twitter.
Yes, different companies have to follow up with the same offer in order to break up the talent bloc. Otherwise the bloc will move en-masse to one firm.
> How is any of that "sacrifice their children on twitter"?
> Yes, different companies have to follow up with the same offer in order to break up the talent bloc. Otherwise the bloc will move en-masse to one firm.
Or just… not hire all of them. Much easier.
And in the scenario where Microsoft, Salesforce, NVIDIA, and Meta actually think the OpenAI staff are mad (rather than the more plausible scenario where they think the OpenAI board is mad and are looking for a big pile of skilled proven talent that already know each other and can work well together on big projects), the only sane response would have been "not only don't hire them, don't offer them jobs, what are you even thinking this is the real world we don't do things like the script of a Marvel film".
Then a competitor might hire all of them. If you're in the AI business you don't want that. You want to grab either all of them or balkanize them. Come on, this isn't a hard concept to grasp.
> And in the scenario where they actually think they're mad ... the script of a Marvel film
Then you hire them on a 5 year exclusive contract so they can't rejoin Hydra.
> It makes you look like the mad one
It's normal human writing style, hyperbole, sarcasm, exaggeration, wit, irony, you know. Adult writing, for adults to consume.
I'm throwing out suggestions as to why various differing parties here may be doing what they're doing. There's no need for internal consistency because it's not a unified top-down scenario, it's multipolar game theorizing.
'If A does B, then why would C do D, that isn't consistent' well the answer is that A and C are competing, not cooperating.
> Sure, it's in their interest to break up a unified bloc of talent
And
> If you're in the AI business you don't want that. You want to grab either all of them or balkanize them.
And
> Nobody wants to invest in a personality cult that's sworn an oath of fealty to one guy, dude. That's basically flushing money down the toilet, as this fiasco demonstrates. These lunatics are ready to sacrifice their children on twitter. You cannot work with people like that!
They might be willing to take the spots, but given that OpenAI has been vacuuming up all of the real talent they could find those surely aren't going to be in the same class as the team that they already have.
Even if only 1/4 of the people threating to resign, resigns, its still like 20% of the company leaving abruptly without any sort of handover. They might keep the light on for chatgpt and the API's, but its going to blunt growth and re-hiring isn't done in a heartbeat. You need to vet, test and onboard new employees. You're looking at a setback of at least 9-12 months of growth and research
Even if all the employees don’t quit, losing even a quarter would be devastating. They will have a reputation as a shit show and lose all the best people to anthropic, Microsoft and google. They have the best product right now but everything improving so quickly means they will get left behind.
It's one of the most innovative and impactful companies in a long time. I'm sure they'll be able to run gpt4, but good luck delivering gpt 5 (or 6 depending on how far along 5 is) when you lost entire teams that dreamt up and built previous iterations.
> Does anybody know who is currently CEO of OpenAI?
Emmett Shear.
Altman won't be back.
Investors like success and returns but they don't like companies where all the employees have basically sworn out an oath of fealty to the CEO, as it means they (the investors) have basically no control over anything.
> where all the employees have basically sworn out an oath of fealty to the CEO, as it means they (the investors) have basically no control over anything.
Another interpretation: those closest to the internal workings of the business believe that a certain person is best capable of managing the business. Turns out that person is also who the investors believe in. So rather than fealty to a person, they are simply voting (with their feet apparently) against the board.
Have you _seen_ the bizarre behaviour that's occurring on twitter? Retweeing heart emojis, making weird declarations of faith, acting in lockstep? They're 100% swearing fealty and it's incredibly weird.
It's objectively weird to see staff - almost all of them researchers and head-down types - unite so firmly behind a non-technical CEO.
Those staff usually have their private champions within the company - usually technically focussed project managers who can run interference against the commercial side - but nod along with the CEO who they view as the ugly necessity of having to have a 'business guy.'
Does it not seem odd to you that they all just retweet heart emojis and copy/pasted statements, instead of composing their own separately written statements of support?
These are meant to be top-tier researchers, you'd think they'd put their thoughts in their own words. That too would avoid uncertainty and make their position easier to understand.
Just retweeting a heart emoji because their dear leader (lol) did it is... odd, to me. Unless it's specifically intended to send the message that they'll literally do whatever he tells them to do. Which is about a thousand times weirder.
> Investors like success and returns but they don't like companies where all the employees have basically sworn out an oath of fealty to the CEO, as it means they (the investors) have basically no control over anything.
Investors love such companies. I, as an investor would love such a company, as long as I was sure that the CEO would stay. Investors tend to not have control over much of anything anyway unless they have a board seat. Other than that it's a shareholder meeting once per year where you get to sign off on the actions of the execs for the preceding year. But the better interpretation is that the people there have said "we are not loyal to the board" rather than that they are more loyal to Altman, that only goes for those that will follow him wherever he goes.
The best time for an investor to influence things is when you come on board. The best way for an investor to continue to be able to influence things is to have a controlling interest or very good relations with enough of the stockholders to effectively have a controlling interest.
> I, as an investor would love such a company, as long as I was sure that the CEO would stay.
As an investor you have no way of obtaining that surety. So, you would not love this company.
> But the better interpretation is that the people there have said "we are not loyal to the board" rather than that they are more loyal to Altman
Dude they're retweeting heart emojis and carrying water in _the most disturbing_ fashion on twitter. They're 100% declaring that they're his personal army, ride or die. I don't know how you aren't seeing this. It's completely abnormal behaviour for adults.
That will last until Sam gives up and drops them all when he moves on to whatever he’s doing next. They may be dogmatic about it but it’s only because they think they have cards to play.
Dude, you’re all over this thread and have such a strange bias against Sam and the current employees. Can I ask, out of genuine curiosity, why you find the board to be OK in this situation and why you find Sam / the employees behind him so off-putting?
> why you find Sam / the employees behind him so off-putting?
To me it's the 100% committed 'vibe' they're giving off. It's weird. It's not how staff, especially technical/researchers (who usually bicker like anything over the most trivial of differences) behave.
Anyone who's managed a big research team knows that competing rivalries and internecine warfare is the order of the day. Literal slapfights have broken out over whether big or little endian encoding will be more efficient for any given scenario, for example.
Dude I’m all over this thread because people are responding to me. It’s called conversation. You want me to run and hide because 20 people jumped on me with opposing thoughts?
Oh yeah I think Sam is sleazier than most people seem to think. I also don’t think he’s in the right because the board has been quiet. The whole thing is insular and one sided. Everything they’re doing/saying is to try and control the board. That is off-putting because it’s detrimental to the board’s intent. I’m sure they’re all very nice people and hard workers.
No, I think you're mistaking my tone. I was genuinely curious, because it's rare to see someone with a sure view on this mad saga! And I wanted to learn a bit more from the somewhat-less-popular side (I do think there is an odd cultish energy around Sam at the moment from some folks).
I don't know enough about Sam or the board at all, so curious as to reasons why he might be sleazy/sneaky.
The board being quiet, in my opinion, is not doing them any favors!
> The board being quiet, in my opinion, is not doing them any favors!
The board being quiet is adult behaviour. Release a discreet and generic press release then direct all further enquiries to the lawyers. That's how things should be done.
The frenzy of reporting and contradictory articles and froth and spin that's coming from the other side makes them look deranged, IMHO. It's incredibly childish and just makes it look like they have tentacles everywhere that they can drag these weird articles out of so many different outlets. It's not a good look unless you're really trying to look like HYDRA.
IMO opinion the board is quiet because they owe the media and public nothing as they are not a publicly traded company. The entire frenzy around this is seated with the employees, Microsoft CEO, and outlets looking for clicks. In a week or so when this is over everyone will see how much of a nothing burger this will have turned out to be…IMO.
Employees hate working for companies where they have no voice too. Morale will drop and attrition will skyrocket. New talent won't consider OpenAI, existing talent will leave.
The investment goes to zero anyway without talent.
I think you can assume that there's a large pool of talent that would love to work at OpenAI, they were just turned off by the ... vibes ... coming from the e/acc locksteppy types.
It may be very easy to re-hire talent that's actually a lot smarter, if a bit less 'mission focussed.'
>>I think you can assume that there's a large pool of talent
Why would we assume that? Every company in the US currently is complaining endlessly about the lack of talent, in IT especially I see posts from hiring managers being unable to find tech talent, and the fact that several companies are making very aggressive plays at getting OpenAI worker right now tells me there is not infact a "large pool of talent" that will just back fill all of these roles.
you have confused "tech company layoffs" with "tech worker layoffs"
Alot of Tech companies have been laying off alot of support staff in HR, Recruitment, Sales, and other business functions
and yes some Technical roles as well, but dont think because you see "Google Lays of X,000 employees" means they just laid off that many AI Researchers, programmers, etc...
Say, what agenda are you trying to push, spaceman? This is the second comment of yours in this thread trying to make it seem like everyone at OpenAI is irreplaceable, so maybe you missed the hundreds of thousands of tech layoffs this year in the US.
If you know where to find a hundred or so people of the caliber that OpenAI has managed to attract so far you should get into the recruiting business pronto because you could make a few million easily.
> all the employees have basically sworn out an oath of fealty to the CEO
Objectively not true. Employees were quiet on Friday. It was after Ilya told employees that Altman was fired partly because he tasked two people with the same job, that they then organized.
@OpenAI
We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new initial board of Bret Taylor (Chair), Larry Summers, and Adam D'Angelo.
We are collaborating to figure out the details. Thank you so much for your patience through this.
If the board resigns that may be good for the company, but it may not be good for those on the board. If, on the other hand, the board prevails OpenAI may still turn out to be fine regardless.
What do the board members have to loose by holding their ground?
Hehe, as a Dutchman I wonder how many people pick up on that joke, but yes, chance missed. Too busy. On a less busy day I would have seen my chance and jumped for it. But don't worry, you're not off the hook yet.
The employees won’t resign and I doubt Microsoft will match the hypothetical 90B valuation for their profit participation units, otherwise they would’ve left already (Microsoft has agreed to match).
The investors have no power here and are effectively irrelevant. The remaining board had little to lose. The charter explicitly calls investment risky, so they’re good there too.
> The Company's duty to this mission and the principles advanced in the OpenAl, Inc. Charter take precedence over any obligation to generate a profit. The Company may never make a profit, and the Company is under no obligation to do so.
Even if the employees left I’m sure there is a class of person who would join still.
My questions are who will be permanently ceo, and why did they foolishly accuse Altman of lying. Luckily for them everyone lies and they can just pick something, but it was a bad move.
The investors have extremely deep pockets and good lawyers. I would not want to be on that board even with very good D&O insurance. It's not bulletproof, and a lawsuit by Altman, in particular, could be excluded from coverage and force them to defend themselves out of pocket.
I'm objecting to the comment that the remaining board has little to lose. It's possible for sufficiently motivated investors, former board members, and employees to make their life awfully miserable.
Seconded, the board has a lot to lose and short of making a deal that defangs the tigers I don't see them just moving on with their lives. Especially not those board members that weren't independently wealthy yet.
Defending yourself against several lawsuits can be extremely expensive, not to mention time consuming. While the board members are almost certainly covered by the company's D&O insurance (unless they're not, which would be a ridiculous clown show), there's still a lot of arguing that can happen about which parts are covered by the insurance and which parts may trigger personal liability.
The point is not that these board members would lose the lawsuits - ianal and nobody knows the details well enough - it's that sufficient lawsuits can eat you before you win or lose them if you're not rich. AND subject you to discovery and a huge waste of time.
"I will bury you in legal fees unless you resign" is not a very nice or principled negotiating tactic, but it's a potential one, and it should be weighing pretty heavily on the mind of any board members who don't have a spare million or two to toss in a fire.
> I doubt Microsoft will match the hypothetical 90B valuation for their profit share units, otherwise they would’ve left already (Microsoft has agreed to match)
I doubt it. The ppus at a 90 billion valuation puts even late employees in the 7 figure territory.
They can afford it, but ultimately the brand is what’s valuable. The only reason both Google and meta have not released something like gpt4 is because it’s not profitable and paying hundreds of millions for dozens of employees or billions for everyone isn’t really going to be worth it.
Ironically, it would be better to let OpenAI die and let all of these people start their own things, and if one of them creates agi then pay that person the 90 billion.
Who would buy 500 people for 90B without tech, dataset, company culture they are pretty much your another excellent ML guys or team.
They can make great things for sure but not more than your organisation will allow them
Im pretty sure this big corporations aren't as fast moving and "we dont care about law/copyright" as ML startups, and people working in Meta/Google are as good as your typical OpenAI guy just with massive corporation on their back and this wont change.
Matching 90B valuation for compensations would only equal 90B if you assume that 100% of that valuation went to employees. Which sounds pretty far fetched, if you ask me.
It's not reported as much as it should be, but at one point in 2021 the OpenAI board had 10 people on it. In the beginning of 2023 it had 9 people. 3 stepped down over the course of 2023 and were not replaced, leaving only 6 in place by the time of last week's fiasco. 2 of the 6 were then removed on Friday leaving 4. The typical large company will have 10-12 people on the board. Apparently, OpenAI's bylaws do not set a fixed size for the board and allow the board itself to elect and remove members and allows a simple majority to take any action without even requiring a formal meeting. It's a glaring failure of governance that OpenAI now has a 4 person board that seems split and paralyzed over what to do next. The path forward has to include not only all 4 of the current board members resigning but a change in bylaws to establish a larger board with a balance of insiders and outsiders and much clearer operating procedures.
>It's not reported as much as it should be, but at one point in 2021 the OpenAI board had 10 people on it. In the beginning of 2023 it had 9 people. 3 stepped down over the course of 2023 and were not replaced, leaving only 6 in place by the time of last week's fiasco.
Something bothered me when I read the board members' bios after Altman's firing but didn't figure out until today; it's not so much what they say, as much as what they don't say. There is no greybeard, some seasoned current/former C-level at another company (no, the CEO of Quora does not quality). There is no VC representative.
My question: Did the board ever have such people?
(I realize that OpenAI has this weird nonprofit/profit ownership arrangement which I still don't get, and that the VC board members/observers are presumably on the profit side, but that still doesn't answer the implied question!)
> Apparently, OpenAI's bylaws do not set a fixed size for the board and allow the board itself to elect and remove members and allows a simple majority to take any action without even requiring a formal meeting.
For their sake I do hope they read the bylaws and that your 'apparently' doesn't come back to haunt them because then they are in even more trouble.
> The path forward has to include not only all 4 of the current board members resigning but a change in bylaws to establish a larger board with a balance of insiders and outsiders and much clearer operating procedures.
Amen to that. It might even end with the removal of the oversight board and the whole non-profit construct.
If not removal then at least a clear split into two separate (for-profit and non-profit) entities with no parent-sub relationship. Then have an agreement where the for-profit entity commits to a specified funding level for the non-profit in exchange for a license to commercially use/resell the IP.
But it does seem that the concentration of power was getting a bit high. And the fact that the nonprofit that was created to balance exactly that had disintegrated is not a good sign.
This structure of the nonprofit seems to be a very smart move by some very smart people. Visionaries. I’d say it needs to be restored and rebalanced.
This is not a structure that will actually work in the real world and everyone involved knows it.
Why? Because the profit half is why the non-profit would ever have power.
If the company is led to slow progress down or reduce profit motivations, other companies will fill that gap and the non-profit doesnt have power over AI anymore.
To be the source of AI, to control it, means to have the money to pay the best, to build the sort of place that AI dev can thrive. Only then can you control what gets out there. This will lead a rift between the pro-profit and non-profit halves and when the investors and clients get limited by the nonprofits, they will work to kill the non-profit. This is what reality, not dream company world, looks like.
Might I add, the board was stacked from the start. They have a competitor on the board regulating the profit half. Few if any of them are actually respectable or successful leaders.
This ends with the Board gone and replaced with one pro-profit for MS, or MS holding all the cards internally. No version of this actually will work long-term and it never would. People inventing it thought they could make a dream company of sorts with no downsides, just non-profit smarts running a profitable company...but it isn't a balanced system. The money wins out.
OpenAI is incorporated in Delaware, so it would be up to the Delaware attorney general to make any direction as to the non-profit purpose, which she has thus far ignored.
"A potential return of Sam Altman as OpenAI’s CEO will likely strengthen Microsoft’s strategic positioning, especially if it’s able to procure a seat on the new board. This could also be the preferred outcome for Microsoft, given a high legal risk if it hires a majority of OpenAI employees. We see little to no likelihood that Microsoft will buy OpenAI amid ongoing regulatory hurdles."
> given a high legal risk if it hires a majority of OpenAI employees
What legal risk would that be? All they have to do is to claim that they are protecting their interests, besides it is not as if Microsoft has ever been afraid of a legal challenge.
MS and OpenAI certainly have non-solicitation clauses in their contracts. MS could afford the legal battle but isn't it better for them to wait it out and see what happens first?
The letter from OpenAI employees to the board expressly says:
"We, the undersigned, may choose to resign from OpenAl and join the newly announced Microsoft subsidiary run by Sam Altman and Greg Brockman. Microsoft has assured us that there are positions for all OpenAl employees at this new subsidiary should we choose to join."
I think it's safe to say there probably isn't any non-solicitation clause; or at least, it's a very weak one or specific one that Microsoft isn't violating (i.e. you won't reach out over LinkedIn).
It is different between JV partners or between vendor and customer . If non solicit agreement were not legal for those , consulting companies either tech or management consulting will not be able to operate at all .
Do you mean to say that if non-solicitation agreements were entirely unenforceable, consulting companies would see all of their best consultants poached by clients?
I've yet to see a more clear example of solicitation and MS is very much out front with this, presumably their ability to protect their interest in OpenAI outweighs the risk that the competition (Google, etc) would snap up the employees. Think of it as a stop-gap move to ensure that people won't leave and it looks different already. If there is any legal risk (which I doubt) then it is more than offset by their most simple excuse to ignore it, besides the legalities involving non-poaching agreements to begin with.
The clauses are common in the UK but I see them all the time from startups incorporated in Delaware. Maybe they're there for the deterrent factor. Also, hi!
Yes, they get put in but if you try to enforce them you'll find that you can't.
We sign contracts with non-poaching elements in them all the time because the companies we look at are afraid that we will use our inside knowledge to go after their best talent. But I suspect that just the basic protections an employee has under employment law would be enough to stop a company from trying to enforce this (we have a term for this in Dutch which is called 'broodroof' but I don't know any good English translation).
That said: for Execs and consultants it is a different matter. But they are not rank-and-file employees.
Firing Sam Altman was a truly great move and I hope the board wins out. Investors are furious... Who cares? That's why it is a nonprofit, to protect them from being forced towards maximizing growth and profit at the expense of their mission. Let Sam and whoever wants go to Microsoft and copy the chat product, wishing them the best.
does this story remind anyone of when Facebook investors started crying about needing new leadership?
same story here - investors knew what they were buying into. A profit capped for profit, OWNED BY A NON PROFIT. Said non profit could, at any time, make decisions that are not optimal for profit. Surprise surprise.
Of course they'll push, but I doubt they'll get any sympathy.
In aggregate they are secret sauce why GPT4 only exists in OpenAI not anywhere else. Data/compute are hard too, but some competitors do have the capacity.
As of yesterday this situation has crossed into omnishambles territory.
Sunday you could still have reversed this and treated it as a blip. Now it's Tuesday—there's not really an option anymore that doesn't cause some kind of lasting damage.
The form says "Your company email address" gmail/hotmail/outlook will be denied ha
edit: it is curious about this... you could get past that with mailgun but then they ask for company address, company phone number, etc... vs. OpenAI where you can sign up with a gmail account. Anti abuse?
Does anyone know what control the investors have over their funds? I've seen mention that it might be cloud credits that they could pull, but I'm not sure I understand how they could do that unless it was part of their contract.
Assuming Altman has already signed paper with MSFT, how would this work exactly? Break whatever contract clause there was involved? Maybe it's customary to have an easy backout period in situations like this.
I think that's a large thing to assume. That announcement could also have been easily just damage control before the markets opened on Monday and nothing has yet to be truly hashed out and agreed on.
I am not sure the enforceability of non-competes in California. They're certainly not for ordinary workers but I know that it is often enforceable in other places for executives even when deemed not for workers.
All they need is another 2% and at a measly two billion that would be an easy settlement. The board members get to save face and Satya is off to the races, employees happy, investors happy.
Microsoft couldn't control the OpenAI business even if it owned every unit of every LLC associated with OpenAI (except for the special units owned by OpenAI GP LLC, which is wholly owned+controlled by the non-profit). The operating agreement of OpenAI LLC (which actually operates the OpenAI business) specifies that OpenAI GP LLC (which is wholly owned and controlled by the non-profit) controls it regardless of how many units it owns. See https://openai.com/our-structure
What is interesting is that Sam noted that OpenAI board should go after his shares if he were to go off on the company...which implies some sort of ownership that others had no prior knowledge of.
What's the over-under of his shares being more than 2%?
Based on OpenAI's structure, I would expect his equity would be in the OpenAI holding company, and not OpenAI Global, LLC which Microsoft is a minority owner of and the holding company is a majority holder. The holding company is what employees and investors have equity in.
If Altman had equity directly in OpenAI Global that would be really odd and go against OpenAIs previous disclosures.
My understanding is the OpenAI holding company, which is controlled by the board of directors, owns 51% of the capped-profit company, with Microsoft owning the other 49%. There doesn't seem to be a scenario where Microsoft can buy a controlling interest without the boards approval.
MS doesn't have enough leverage to pull such move.
The board could decide to kill the company in MS not only loses a 10 billion invest but has to reconsider its whole artificial intelligence integration push.
MS did have the leverage, and by offering jobs to 700 people at once they felt safe in their move to pressure the board in a way that I'm still quite impressed by. It's probably the most vivid example of the power of the workforce in the 21st century West.
If you have profit sharing, the drive for commercialization is worth it, as is making the big commercializing partner who could otherwise be a competitor happy.
Profit-based compensation in a firm where profit is nominally at best a secondary goal creates misaligned incentives between employees and employer compared to fixed wage/salary.
How does someone come back without being livid about what just happened?
Without giving it much thought, my first impulse would be that every single person who participated in the ousting would have to resign and go away immediately. I cannot conceive of any way to clear the air and approach the work to be done with a clear mental state.
I'm interested in whether this has potential trickle effect in other startups where the staff threaten to mutiny if they don't like the change in leadership. Flipping crazy and precedent setting for corporate governance.
Yes, the fall-out from all this is going to be much, much wider than just OpenAI. And if it ends up in front of a judge I wouldn't be surprised if it eventually results in adjustments to the law.
Oh that will definitely be a starter condition. Otherwise the rest of the conversation is pointless. Between Ilya and Sam it is going to be plenty of uncomfortable too but that might be repaired, especially with Greg bridging. But the rest of the board isn't going to survive this if Sam goes back to OpenAI.
