Foundering: OpenAI Part 5 - Beware the Ides of November

Release Date: June 27, 2024
Host/Author: Bloomberg
Episode Title: OpenAI Part 5: Beware the Ides of November

Introduction

In the riveting fifth installment of Bloomberg Technology's award-winning serialized podcast, Foundering, listeners are plunged into the high-stakes drama surrounding OpenAI, one of the most influential entities in the artificial intelligence industry. Titled "Beware the Ides of November," this episode unpacks the tumultuous events that led to the sudden ousting and dramatic reinstatement of Sam Altman, OpenAI's charismatic CEO.

Background: OpenAI's Power Structure

By fall 2023, Sam Altman stood at the zenith of his influence within the tech world. Under his leadership, OpenAI had achieved unprecedented advancements, notably with the success of ChatGPT, and was valued at a staggering $86 billion. However, beneath this facade of dominance lay a governing board with the authority to dissolve the company or remove its CEO.

Matt Levine sets the stage:

"In the fall of 2023, Sam Altman was more powerful than he'd ever been... there was in fact, a powerful and mysterious board that governed him."
[01:59]

The Catalyst: Helen Toner's Paper

The crisis ignited when Helen Toner, a board member and AI researcher, authored a paper in October 2023 that subtly criticized OpenAI while praising its competitor, Anthropic. Although the paper was ostensibly benign, it unsettled Sam Altman.

Helen Toner emphasizes her stance:

"Sam started lying to other board members in order to try and push me off the board."
[03:34]

This paper marked a departure from Toner's usual supportive publications and hinted at deeper concerns regarding OpenAI's operational transparency and safety protocols.

The Coup: Boardroom Betrayal

Sam Altman reacted swiftly and covertly, attempting to sway board members to remove Toner. However, his backchanneling efforts backfired, eroding trust among the board members. A critical break came when Ilya Sutskever, a co-founder and pivotal AI researcher at OpenAI, joined forces with Toner and other board members to oust Altman.

Shireen Ghaffari recounts the betrayal:

"Ilya plays a key role in this whole ouster. He is the Brutus to Sam Caesar. And this is a huge betrayal."
[17:04]

The board's abrupt decision was communicated through a terse blog post citing Altman's inconsiderate candor:

"The board had done a review and decided to remove Sam because he was, quote, not consistently candid in his communications with the board."
[15:00]

Employee Revolt: Mobilizing for Altman

The firing of Sam Altman sent shockwaves through OpenAI’s workforce. Employees swiftly mobilized, expressing overwhelming support for Altman and demanding his reinstatement. Social media became a battleground, with thousands signing petitions and threatening mass exodus to Microsoft, which offered positions to those loyal to Altman.

Rachel Metz captures the chaos:

"Employees were threatening mass mutiny, saying they'll follow Altman to Microsoft unless the board resigns."
[25:07]

This grassroots movement showcased the deep-seated loyalty within the company and the pivotal role Altman played in its success.

Resolution: Sam's Triumphant Return

Under immense pressure from both employees and investors, the board capitulated within five days. Ilya Sutskever publicly regretted his participation in the ousting:

"I deeply regret my participation in the board's actions. I never intended to harm OpenAI."
[28:16]

Subsequently, Sam Altman was reinstated as CEO, accompanied by Greg Brockman’s return. The board underwent a complete overhaul, with key dissenters like Helen Toner and Ilya removed from their positions.

Shireen Ghaffari summarizes the turnaround:

"They sent a company-wide memo that night telling people to come to the office to party. It's an unbelievable turnaround."
[30:18]

Aftermath and Analysis: The Complex Legacy of Sam Altman

While Sam Altman emerged victorious, the episode left lingering questions about his leadership style and the governance structures within OpenAI. Altman’s portrayal as a transparent and accountable CEO was juxtaposed with instances of perceived manipulation and evasion of accountability.

Matt Levine provides a critical perspective:

"Sam is slippery, especially when it comes to his words... He promised transparency. He promised that he could get fired. He's walked both of those back."
[43:29]

Additionally, the departure of Ilya Sutskever, once a cornerstone of OpenAI’s research prowess, underscored the personal and professional turmoil that such power struggles can engender within a tech giant.

Conclusion: Lessons from OpenAI's Turmoil

Foundering's exploration of OpenAI's internal conflicts highlights the delicate balance between visionary leadership and accountable governance in tech companies wielding significant societal influence. The rapid sequence of events serves as a case study on the importance of trust, transparency, and stakeholder alignment in maintaining organizational stability.

As Sam Altman resumes his role with renewed support, the episode leaves listeners pondering the future trajectory of OpenAI and the broader implications for leadership dynamics in the rapidly evolving AI landscape.

Notable Quotes with Timestamps

• Helen Toner ([03:34]):
  "Sam started lying to other board members in order to try and push me off the board."

• Sam Altman ([10:04]):
  "I serve at the pleasure of the board. I do this the old fashioned way where the board can just decide to replace the CEO, he said at a Bloomberg conference, the board can fire me."

• Shireen Ghaffari ([17:04]):
  "Ilya plays a key role in this whole ouster. He is the Brutus to Sam Caesar. And this is a huge betrayal."

• Rachel Metz ([25:07]):
  "Employees were threatening mass mutiny, saying they'll follow Altman to Microsoft unless the board resigns."

• Ilya Sutskever ([28:16]):
  "I deeply regret my participation in the board's actions. I never intended to harm OpenAI."

• Matt Levine ([43:29]):
  "Sam is slippery, especially when it comes to his words... He promised transparency. He promised that he could get fired. He's walked both of those back."

Final Thoughts

Foundering delivers a compelling narrative that not only chronicles a pivotal moment in OpenAI's history but also offers profound insights into the complexities of leadership within the high-stakes arena of artificial intelligence. For those seeking to understand the intricate dance between power, accountability, and innovation, this episode serves as an essential listen.