Sam Altman, CEO of OpenAI, during an interview at Bloomberg House on the opening day of the World Economic Forum in Davos, Switzerland, on January 16, 2024.
Chris Ratliff | Bloomberg | Getty Images
DAVOS, SWITZERLAND — Sam Altman, founder and CEO of OpenAI, said the night the board fired him was “wild,” and he felt “very overwhelmed” and “very surprised.”
“But that’s the structure, and I immediately went to think about what I would do next,” Altman, OpenAI’s CEO, said in a private meeting at Bloomberg House on Davos Promenade on Tuesday.
“I didn't really think about coming back until some of the board members called me the next morning,” Altman continued, reflecting on the dramatic turn of events that led to his ouster — and later reinstatement — in November. “But, like, the board had all the power there.”
In fact, it was the unusual corporate structure of OpenAI — which created the AI tool ChatGPT — that led to Altman's sudden ouster.
Typically, it's rare to see a founder forced out of their company, but Altman's power differs from that of other major tech founders, in part because he has no actual ownership of the entity itself.
“I don't have any shares in OpenAI,” Altman said at a May Senate hearing on artificial intelligence.
Senator John Kennedy quipped, “You need a lawyer or an agent,” a remark that proved true.
The organizational chart for the AI startup, which is valued by private investors at $86 billion, is very confusing. It ultimately proved to be bad for its founder, both in terms of protecting control and retaining a financial stake in the company.
At the top of the power hierarchy is the OpenAI Board of Directors, the union of voices responsible for governing the 501(c)(3) charitable organization, OpenAI Inc.
Between the board and the nonprofit is a for-profit company called OpenAI Global, with which Microsoft signed a $10 billion investment deal in January last year. There are also a few other entities, including the holding company, which houses a rather complex organization behind the biggest name in generative AI technology.
I wanted to make a significant amount of money for all stakeholders, but it was very clear to me what people's priorities were.
Sam Altman
CEO of OpenAI
In November, the board said it had lost confidence in its leader and expelled the CEO from the organization. The events that followed in the subsequent hours were chaotic and involved all of the OpenAI employees who had threatened to quit following their founder's departure.
Concerns about the safety of AI and OpenAI's role in security were the focus of Altman's brief expulsion from the company.
Despite Microsoft's significant investment in the startup, the tech giant had no seat on the board and no say in Altman's firing.
Within days, Altman was restored to his original position, but speculation swirled around the OpenAI drama that dominated the news cycle during Thanksgiving week.
“In the middle of those crazy few days,” Altman said at an afternoon meeting in Davos, roughly 98% of the company signed a letter saying they would resign if Altman was not reinstated as CEO.
“That would have set everyone's stock on fire, and for a lot of our employees, like this is all or the vast majority of their wealth, and I think people are willing to do that, I think it's quite extraordinary,” Altman said of his team. Adding that OpenAI investors were also about to watch their stakes drop to zero, including Microsoft.
“I would love to make a bunch of money for all shareholders, but it was very clear to me what people's priorities were,” Altman said of the solidarity of his employees and investors.
Altman, who had vetoed countless invitations from the press to speak publicly about his abrupt firing and reappointment, questioned the supervisor about pursuing the line of questioning in the first place.
“He is [this] Is it really what we want to spend our time on, like this TV series and not what AGI is going to do?” Altman asked seriously.
When asked if OpenAI would overhaul its structure and become a traditional for-profit Silicon Valley company, Altman was adamant that his startup wouldn't go that way.
“We will never become a traditional company,” he said. “But the structure, I think we have to take a look at the structure. Maybe the answer we have now is the right one, but I think we have to be willing to look at other things.”
Altman added that now is not the time to reconsider the company's structure. Instead, he said the focus was on the painting first.
“I think one of the things that's hard to fix for us about OpenAI is how committed our team and the people around us are, or invested in us or whatever, to this mission,” Altman said.
— CNBC's Rohan Goswami contributed to this report.
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