WORKERS POWER
Nearly All of OpenAI Staff Threaten to Go to Microsoft If Board Doesn’t Quit

Ashlee Vance, Ed Ludlow and Vlad Savov
Mon, November 20, 2023 


(Bloomberg) -- Nearly all of OpenAI’s employees have threatened to quit and follow ousted leader Sam Altman to work at the company’s biggest investor, Microsoft Corp., unless the current board resigns, leaving the future of the high-profile artificial intelligence startup increasingly uncertain.

More than 700 of the AI firm’s roughly 770 employees signed a letter on Monday addressed to OpenAI’s board stating that the signatories are “unable to work for or with people that lack competence, judgment and care for our mission and employees.” The letter called for every member of the board to resign and for Altman to be reinstated, or else employees might jump to Microsoft. The software giant “has assured us there are positions for all OpenAI employees,” the letter said.

The extraordinary threat of a mass exodus followed a roller-coaster weekend during which OpenAI’s board defied calls from its investors and top executives to reinstate Altman, who was fired following disagreements with the board on how fast to develop and monetize artificial intelligence. OpenAI executives — including then-interim CEO Mira Murati, Chief Operating Officer Brad Lightcap and Chief Strategy Officer Jason Kwon — were negotiating with the board to bring Altman back to the company into Sunday night, according to a source familiar with the discussions, who requested anonymity discussing private information. Instead, the board named a new leader — former Twitch CEO Emmett Shear — and Microsoft hired Altman and OpenAI co-founder Greg Brockman to head up a new in-house AI team.

The chaos inside OpenAI could reshape the world of artificial intelligence. OpenAI kicked off the global frenzy around generative AI with the launch of its hugely popular chatbot ChatGPT a year ago. With Altman as its figurehead, OpenAI was at the center of the tech industry’s efforts to deploy this technology to businesses and consumers — and also to work with regulators on guardrails for AI. But the tension at OpenAI raises new questions about whether AI startups can balance developing AI responsibly alongside the need to raise vast amounts of capital from investors to support the expensive computing infrastructure required to build these tools.

OpenAI’s turmoil could also set off a race by other tech companies to poach highly-competitve AI talent. Salesforce Inc. Chief Executive Officer Marc Benioff offered on Monday to immediately employ researchers resigning their posts at OpenAI. Salesforce will provide matching compensation to any researcher who has quit OpenAI, Benioff said in a post on X.

Among the many employees and executives who signed the letter were Murati, OpenAI’s chief technology officer who had been named interim CEO on Friday, and Ilya Sutskever, an OpenAI co-founder and board member who has been seen as instrumental in the board’s actions. (Wired previously reported on the employee letter.)

“I deeply regret my participation in the board’s actions,” Sutskever wrote in a post on X, formerly Twitter, on Monday. “I never intended to harm OpenAI. I love everything we’ve built together and I will do everything I can to reunite the company.”

Altman clashed with members of his board, especially Sutskever, the company’s chief scientist, over how quickly to develop generative AI, how to commercialize products and the steps needed to lessen their potential harms to the public, people with knowledge of the matter have said. OpenAI’s other board members included Adam D’Angelo, the co-founder and CEO of Quora; Tasha McCauley, CEO of GeoSim Systems; and Helen Toner, director of strategy and foundational research grants at Georgetown’s Center for Security and Emerging Technology.

Alongside rifts over strategy, board members also contended with Altman’s entrepreneurial ambitions. Altman has been looking to raise tens of billions of dollars from Middle Eastern sovereign wealth funds to create an AI chip startup to compete with processors made by Nvidia Corp., according to a person with knowledge of the investment proposal. Altman was courting SoftBank Group Corp. chairman Masayoshi Son for a multibillion-dollar investment in a new business to make AI-oriented hardware in partnership with former Apple designer Jony Ive.

Altman’s ouster from the company he co-founded also leaves OpenAI and its employees with some immediate unknowns. Thrive Capital had been expected to lead an offer for employee shares, a deal that would value OpenAI at $86 billion. As of this weekend, the firm had not yet wired the money and it told OpenAI that Altman’s departure would affect its actions.

Some investors were considering writing down the value of their OpenAI holdings to zero, according to a person familiar with the discussions. The potential move, which would make it more difficult for the company to raise additional funds, seemed designed to pressure the board to resign and bring Altman back.

Also in the balance was a second tender planned for early 2024 which would have given early stage investors a chance to get some liquidity on their shares, the people said. As recently as last week, blocks of OpenAI’s private shares were being offered that valued OpenAI in excess of $100 billion. That market dried up on Friday after news broke that Altman had been dismissed by the board, leaving hundreds of millions of dollars of private transactions pending.

Altman’s firing came as a surprise to OpenAI’s workers, the letter said, as well as to Microsoft. A coalition of powerful investors, company leaders and the world’s largest software company tried to get Altman reinstated over the weekend to no avail.

Late Sunday, the company’s four-person board instead appointed Shear, co-founder and former CEO of game-streaming website Twitch. Shear, who became OpenAI’s second interim chief executive in three days, won over the directors because of his past recognition of the threats that AI presents, a person familiar with the matter said, asking to remain anonymous to discuss the private deliberations.

Shear is a well-regarded technologist and computer scientist who’s long advocated a more cautious approach to AI. He set out the priorities for his first 30 days in charge in a post on X, promising to reform the leadership team and hire an independent investigator to look into the circumstances of Altman’s termination. That was apparently not enough to assuage employees from issuing their board ultimatum. Shear didn’t immediately respond to a request for comment.

Ahead of the letter’s release, many employees from OpenAI posted identical messages on X: “OpenAI is nothing without its people.” Altman responded to several of them with a heart emojis.

“We have more unity and commitment and focus than ever before,” Altman wrote on X Monday. “We are all going to work together some way or other, and i’m so excited. one team, one mission.”

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--With assistance from Rachel Metz.

Bloomberg Businessweek