OpenAI Leadership Shake-Up: Sam Altman Ousted as CEO - Mira Murati Steps In as Interim CEO Amidst Board Reshuffle

The 501(c)(3) nonprofit that oversees OpenAI, Inc., the AI startup that created ChatGPT, DALL-E 3, GPT-4, and other extremely powerful generative AI systems, has fired Sam Altman. He will resign as CEO and leave the company's board of directors.

ltman's departure, according to OpenAI, comes after a "deliberative review process by the board," which found that Altman "wasn't consistently candid in his communications" with other board members, "hindering its ability to exercise its responsibilities." The company makes this announcement on its official blog.

The blog post states, "The board no longer has confidence in [Altman's] ability to continue leading OpenAI."

In addition, Greg Brockman, who along with Altman was a member of the team that co-founded OpenAI, will resign as chairman of the board but continue in his role as president, answering to Mira Murati, the company's recently appointed interim CEO, as part of OpenAI's significant leadership transition. Murati was the CTO of OpenAI before.

According to OpenAI, a formal search for a permanent CEO will start right away.

In a joint statement, the board stated that "OpenAI was deliberately structured to advance our mission: to ensure that artificial general intelligence benefits all humanity." "The board is still totally dedicated to completing this task. We are appreciative of Sam's numerous contributions to the development and establishment of OpenAI. However, we think that as we proceed, new leadership will be required. Being in charge of the company's safety, product, and research departments, Mira is highly qualified to take on the position of acting CEO. We have complete faith in her to steer OpenAI through this phase of change."

Ilya Sutskever, chief scientist at OpenAI, Adam D'Angelo, CEO of Quora, tech entrepreneur Tasha McCauley, and Helen Toner, director of strategy at Georgetown University's Center for Security and Emerging Technology, currently make up the board of directors.

Altman's dismissal is, to put it mildly, unexpected. Altman emceed the company's inaugural developer conference, OpenAI DevDay, which took place just last week. On Thursday, Altman gave a speech at an event in Oakland, California, and at a conference on Asia-Pacific Economic Cooperation. Additionally, staff members at OpenAI were informed of Altman's termination upon its public announcement, according to The Verge and The New York Times, which cited numerous internal sources.

Altman has led OpenAI for a very long time. Altman, who previously headed startup accelerator Y Combinator and also holds a seat on the board at Worldcoin, the ambitious cryptocurrency project, initially served as co-chair of OpenAI alongside Elon Musk. Altman co-founded the company with Peter Thiel, Reid Hoffman, and other investors. In order to avoid a conflict of interest with Tesla, Musk departed in 2018.

During the course of the last few months, Altman actively participated in shaping the way regulators responded to AI. He testified at US congressional hearings and had in-person meetings with a number of international leaders, including French President Emmanuel Macron, German Chancellor Olaf Scholz, and US President Joe Biden.

Right now, it's unknown what mistakes Altman may have made in leading OpenAI. However, it appears that they are related to his views on OpenAI's unusual board composition and corporate governance structure, as well as the company's ongoing discussions to raise a sizable amount of new funding.

OpenAI's nonprofit organization maintains complete control over its for-profit subsidiary, OpenAI Global, LLC, as recently examined in a VentureBeat article. Although the nonprofit's goal of achieving artificial general intelligence (AGI), or AI that can — in the words of OpenAI — "outperform humans at most economically valuable work"— is not affected, the for-profit subsidiary is allowed to market its technology.

The board of the nonprofit OpenAI has the authority to decide when the company reaches AGI and to exempt this AGI from commercial agreements and IP licenses, such as those with Microsoft, one of OpenAI's largest backers and a staunch integrator of OpenAI's diverse technology. 

Microsoft now owns a 49% stake in OpenAI after investing $13 billion in the startup. After Altman's departure was made public, the former's stock price dropped by more than 1% in the final 30 minutes of trading. According to Axios, Microsoft was informed "minutes" in advance of Altman's departure.

In order to raise money, OpenAI, which was initially established as a nonprofit in 2015, reorganized as a "capped-profit" business in 2019. This move was made in recognition of the enormous expenses involved in educating state-of-the-art AI systems. To emphasize the point, Altman stated in a Financial Times interview this week that he "hoped" Microsoft would boost its investment to help cover the "huge" impending costs associated with model training.

OpenAI's press relations declined to comment on anything other than the official blog post when contacted by email. Nonetheless, Frank Shaw, the company's chief communications officer, provided the following statement through Microsoft PR: "We have a long-term partnership with OpenAI and Microsoft remains committed to Mira and their team as we bring this next era of AI to our customers"

A statement was later released by Nadella:

"As demonstrated at Microsoft Ignite this week, we're making over 100 announcements spanning the entire tech stack, from Copilot to AI systems, models, and tools in Azure. We're continuing to innovate at a rapid pace for this AI era. Above all, we're dedicated to providing all of this to our clients while making future development plans. We are dedicated to our partnership, Mira, and the team. We have a long-term agreement with OpenAI that gives us complete access to everything we need to deliver on our innovation agenda and an exciting product roadmap. We will keep bringing this technology's significant advantages to the world together."