What is going on with OpenAI and Sam Altman?

It’s been an eventful weekend at OpenAI’s headquarters in San Francisco. In a surprise move Friday, the company’s board of directors fired co-founder and CEO Sam Altman, which set off an institutional crisis that has seen senior staff resign in protest with nearly 700 rank-and-file employees threatening to do the same. Now the board is facing calls for its own resignation, even after Microsoft had already swooped in to hire Altman’s cohort away for its own AI projects. Here’s everything you need to know about the situation to hold your own at Thanksgiving on Thursday.

How it started

Thursday, November 16

This saga began forever ago by internet standards, or last Thursday in the common parlance. Per a tweet from former-company president Greg Brockman, that was when OpenAI’s head researcher and board member, Ilya Sutskever, contacted Altman to set up a meeting the following day at noon. In that same tweet chain (posted Friday night), Brockman accused the company of informing the first interim-CEO, OpenAI CTO Mira Murati, of the upcoming firings at that time as well:

Friday, November 17

Everything kicked off at that Friday noon meeting. Brockman was informed that he would be demoted — removed from the board but remain president of the company, reporting to Murati once she’s installed. Barely ten minutes later, Brockman alleges, Altman was informed of his termination as the public announcement was published. Sutskever subsequently sent a company-wide email stating that “Change can be scary,” per The Information.

Later that afternoon, the OpenAI board along with new CEO Murati addressed a “shocked” workforce in an all-hands meeting. During that meeting, Sutskever reportedly told employees the moves will ultimately “make us feel closer."

At this point, Microsoft, which just dropped a cool $10 billion into OpenAI’s coffers in January as part of a massive, multi-year investment deal with the company weighed in on the day’s events. CEO Satya Nadella released the following statement:

By Friday evening, things really began to spiral. Brockman announced via Twitter that he quit in protest. Director of research Jakub Pachocki and head of preparedness Aleksander Madry announced that they too were resigning in solidarity.

How it’s going

Saturday/Sunday, November 18/19

On Saturday, November 18, the backtracking begins. Altman’s Friday termination notice states that, “Mr. Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI.”

The following morning, OpenAI COO Brad Lightcap wrote in internal communications obtained by Axios that the decision “took [the management team] by surprise” and that management had been in conversation “with the board to try to better understand the reasons and process behind their decision.”

“We can say definitively that the board’s decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices,” Lightcap wrote. “This was a breakdown in communication between Sam and the board … We still share your concerns about how the process has been handled, are working to resolve the situation, and will provide updates as we’re able.”

A report from The Information midmorning Saturday revealed that OpenAI’s prospective share sale being led by Thrive Capital, valued at $86 billion, is in jeopardy following Altman’s firing. Per three unnamed sources within the company, even if the sale does go through, it will likely be at a lower valuation. The price of OpenAI shares has tripled since the start of the year, and quadrupled since 2021, so current and former employees, many of whom were offered stock as hiring incentives, were in line for a big payout. A payout might not be coming anymore.

On Saturday afternoon, Altman announced on Twitter that he would be forming a new AI startup with Brockman’s assistance, potentially doing something with AI chips to counter NVIDIA’s dominance in the sector. At this point OpenAI’s many investors, rightly concerned that their money was about to go up in generative smoke, began pressuring the board of directors to reinstate Altman and Brockman.

Microsoft’s Satya Nadella reportedly led that charge. Bloomberg’s sources say Nadella was “furious” over the decision to oust Altman — especially having been given just “a few minutes” of notice before the public announcement was made — even going so far as to recruit Altman and his cohort for their own AI efforts.

Microsoft also has leverage in the form of its investment, much of which is in the form of cloud compute credits (which the GPT platform needs to operate) rather than hard currency. Denying those credits to OpenAI would effectively hobble the startup’s operations.

Interim-CEO Mira Murati’s 48-hour tenure at the head of OpenAI came to an end on Sunday when the board named Twitch co-founder Emmett Shear as the new interim-CEO. According to Bloomberg reporter Ashley Vance, Murati had planned to hire Altman and Brockman back in a move designed to force the board of directors into action. Instead, the board “went into total silence” and “found their own CEO Emmett Shear.” Altman spent Sunday at OpenAI HQ, posting an image of himself holding up a green “Guest” badge.

“First and last time i ever wear one of these,” he wrote.

Monday, November 20

On Monday morning, an open letter from more than 500 OpenAI employees circulated online. The group threatened to quit and join the new Microsoft subsidiary unless the board itself resigns and brings back Altman and Brockman (and presumably the other two as well). The number of signatories has since grown to nearly 700.

Despite Sutskever’s early morning mea culpa, that seemed unlikely. The board had missed its deadline to respond to the open letter, Microsoft claimed to have hired Altman and Brockman and Shear had been named interim CEO.

Shear stepped down as CEO of Twitch in March, where he led the company for more than 16 years and has been working as a partner at Y Combinator for the past seven months. Amazon acquired the live video streaming app in 2014 for just under $1 billion.

“I took this job because I believe that OpenAI is one of the most important companies currently in existence. When the board shared the situation and asked me to take the role, I did not make the decision lightly,” Shear told OpenAI employees Monday.

“Ultimately I felt that I had a duty to help if I could,” he added.

Shear was quick to point out that Altman’s termination was “handled very badly, which has seriously damaged our trust.” As such he announced the company will hire an independent investigator to report on the run-up to Friday’s SNAFU.

“The board did *not* remove Sam over any specific disagreement on safety, their reasoning was completely different from that,” Shear continued. “I’m not crazy enough to take this job without board support for commercializing our awesome models.”

Following his departure to Microsoft on Monday, Altman posted, “the OpenAI leadership team, particularly mira brad and jason but really all of them, have been doing an incredible job through this that will be in the history books.”

“Incredibly proud of them,” he wrote.

There was one more twist in store on Monday, however. Reports suggested that Altman's move to Microsoft wasn't a sure thing — and that he was still angling for a return to OpenAI.

Tuesday, November 21

Tuesday was another eventful day in this soap opera-esque saga. Altman was said to be discussing his potential return to OpenAI with the board, just four days after those same people booted him out of the company. Bloomberg reported that, until Monday, the board "largely refused to engage" with Altman, so the fresh talks were notable. The negotiations were said to involve board member Adam D’Angelo (who is CEO of Quora) along with OpenAI investors who had been pushing for Altman's return.

Things largely remained quiet on the OpenAI front for several hours. However, on Tuesday afternoon, Brockman posted about ChatGPT's voice conversation feature becoming available to all users. That raised a few eyebrows, given that he seemed not to be involved with the company at the time.

The biggest shock of all emerged late on Tuesday night (early Wednesday on the East Coast) when OpenAI said it had reached an agreement in principle for Altman to return as CEO. The company noted that all parties were "collaborating to figure out the details." Brockman also said late Tuesday that he was returning and "getting back to coding tonight."

The board has a new look as well, with only D’Angelo remaining. Google Maps co-creator and former Salesforce co-CEO Bret Taylor succeeded Brockman as chair. Former US Treasury Secretary Larry Summers is the other member of the three-person board, which will reportedly vet a new set of up to nine permanent directors who will have the task of resetting OpenAI's governance. One of those board seats is said to be earmarked for Altman, while Microsoft is set to take one.

"I love OpenAI, and everything I’ve done over the past few days has been in service of keeping this team and its mission together," Altman said after the news of his return broke. "With the new board and with Satya's support, I'm looking forward to returning to OpenAI and building on our strong partnership with [Microsoft]." Altman added that when he decided to join Microsoft on Sunday evening, he felt at the time that "was the best path for me and the team."

"We are encouraged by the changes to the OpenAI board," Nadella wrote on X. "We believe this is a first essential step on a path to more stable, well-informed, and effective governance." Other OpenAI investors, such as Thrive Capital, were pleased about Altman's return, as was Shear.

"I am deeply pleased by this result, after ~72 very intense hours of work," Shear wrote. "Coming into OpenAI, I wasn’t sure what the right path would be. This was the pathway that maximized safety alongside doing right by all stakeholders involved. I’m glad to have been a part of the solution." In a nod to his time at Twitch and that platform's speedrunning community, Shear joked that he'd zipped through his time as OpenAI CEO in 55 hours and 32 minutes.

Many OpenAI workers went to the company's office to celebrate Altman and Brockman's return. At one point during the party, a smoke machine was said to have triggered a fire alarm.

Altman and Brockman may not have too much time to enjoy their stunning comeback before it's back to serious business, though. It also emerged on Tuesday that yet another lawsuit has been filed alleging that OpenAI didn't gain permission from rights holders before using their intellectual property without permission to train its generative AI models. In this case, a group of non-fiction authors say OpenAI did not compensate them for feeding their books and academic journals into its systems.