Business Developments

Sam Altman Reinstated to OpenAI Board

Company Concludes His Ouster Stemmed From 'Breakdown in Trust'
Sam Altman Reinstated to OpenAI Board
OpenAI reinstated Sam Altman to its board of directors on Friday, March 8, 2024. (Image: Shutterstock)

Generative artificial intelligence leader OpenAI returned company CEO Sam Altman to its board of directors Friday in a bid to put to rest a leadership crisis that rocked the San Francisco company during the last months of 2023.

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The announcement came as OpenAI published a synopsis of an external investigation into a mid-November weeklong tumult during which the board fired Altman, nearly all employees threatened to quit and major backer Microsoft said it would hire Altman to lead a research lab. An almost completely reformed board of directors rehired Altman on Nov. 21 (see: Founder Sam Altman Back as OpenAI CEO Under Revamped Board).

The investigation, conducted by law firm WilmerHale, concluded that Altman's behavior did not merit his dismissal. "There was a breakdown in trust between the prior Board and Mr. Altman," states OpenAI's summary of WilmerHale's investigation. That breakdown led to his departure - not concerns "regarding product safety or security, the pace of development, OpenAI’s finances, or its statements to investors."

"I'm pleased this whole thing is over," Altman said on a call with reporters, reported Axios.

"We have unanimously concluded that Sam and Greg are the right leaders for OpenAI,” stated Bret Taylor, chair of the OpenAI Board - referring to the company's president, Greg Brockman, who quit the company after Altman's ouster. He joined Altman in returning to OpenAI.

The board announced efforts meant to strengthen internal governance, including opening a whistleblower hotline, a stronger conflict of interest policy and a new board committee "focused on implementation and advancement of the core mission of OpenAI."

Also joining the board are Sue Desmond-Hellmann, former CEO of the Bill and Melinda Gates Foundation; Nicole Seligman, former executive vice president and general counsel at Sony Corp.; and Fidji Simo, CEO and chair of Instacart.

Although Altman is now restored to his previous position of power, fallout from the incident may yet reverberate for OpenAI since it publicly demonstrated Microsoft's tremendous influence over the company and ended with the computing giant obtaining a nonvoting seat on the OpenAI board.

Competition authorities from the United Kingdom, the European Union and United States are reviewing the magnitude of Microsoft's connections with OpenAI although they've stopped short of initiating formal inquiries (see: US FTC Launches Investigation Into Tech Giants' AI Influence).

The Redmond company has reportedly invested $13 billion into OpenAI and is integrating functions from its ChatGPT large language model into products such as the ubiquitous Office suite of productivity apps.

The New York Times reported Thursday that key OpenAI executives apparently discussed with previous board members their reservations about Altman's leadership. Mira Murati, OpenAI chief technology officer, and co-founder Ilya Sutskever said Altman created a toxic work environment, company insiders told the newspaper. Murati, the Times reported, told the board that Altman manipulated executives to get what he wanted, alternating between flattery and undermining their credibility.

Previous reporting from the Times pegs the current value of OpenAI at $80 billion following a February funding round.

Sutskever in November tweeted regret over "participation in the board's actions." Murati in a Friday tweet accused the previous board of using her as "scapegoat" in a "last-ditch effort to save face in the media."

"I am immensely proud of the leaders I have hired here," Altman said Friday, CNN reported.

About the Author

David Perera

David Perera

Editorial Director, News, ISMG

Perera is editorial director for news at Information Security Media Group. He previously covered privacy and data security for outlets including MLex and Politico.

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