Thursday, April 25

Sam Altman asserts control of OpenAI as he joins its board

The conclusion of an investigation into Sam Altman’s chaotic firing from OpenAI more than three months ago represented a resounding victory for the high-profile CEO as he prepares to reassert control of the company. artificial intelligence that he helped create.

OpenAI, in a news conference Friday, said Mr. Altman, who returned to OpenAI just five days after being ousted in November, had done nothing that warranted his dismissal and would return to the sole role within the company that was still escaping. him: a seat on the company’s board of directors.

Mr. Altman’s ouster stunned Silicon Valley and jeopardized the future of one of the technology industry’s most influential start-ups. It also called into question whether OpenAI — with or without Mr. Altman at the helm — was prepared to carry the banner of the tech industry’s rabid interest in artificial intelligence.

Upon his return to OpenAI in November, Mr. Altman failed to regain his seat on the board while accepting an investigation into his behavior and the board’s actions. Two members who voted for his removal have agreed to step down; their replacements, outside the company, oversaw the investigation led by the WilmerHale law firm. Bret Taylor, chairman of the board of directors of OpenAI, said during the press conference that the highly anticipated report on the episode had been completed, but the company has not released the report.

The company said the law firm’s report concluded that OpenAI’s board acted within its broad discretion to fire Mr. Altman, but also concluded that his conduct did not require its revocation.

“The special committee recommended and the entire board expressed its full confidence in Mr. Altman and Mr. Brockman,” Mr. Taylor said, referring to Greg Brockman, the company chairman who resigned in protest after Mr. Altman’s dismissal. “We are delighted and unanimous in our support for Sam and Greg.”

OpenAI also decided to address concerns about the lack of diversity on the board by adding three women as directors: Sue Desmond-Hellmann, former CEO of the Bill & Melinda Gates Foundation; Nicole Seligman, former general counsel of Sony; and Fidji Simo, the CEO of Instacart.

Mr. Taylor, who was one of the replacements named to the OpenAI board in November, said the board would continue to expand.

With the report and additions to the board, OpenAI management hoped to move past the controversy sparked by Mr. Altman’s ouster. The incident raised myriad questions about his leadership and the San Francisco company’s unusual structure — a nonprofit board that oversees a for-profit company.

But because it didn’t release the report, OpenAI left many unanswered questions about the company. Some insiders questioned whether Mr. Altman had too much control over how the investigation was conducted.

“As we told investigators, deception, manipulation, and resistance to deep oversight should be unacceptable,” said Helen Toner and Tasha McCauley, the two OpenAI board members who left. company at the end of last year, in a press release. “We hope the new board will do its job in governing OpenAI and holding it accountable to its mission.”

Mr. Taylor appeared alongside Mr. Altman at the news conference on Friday. After announcing the new board members, he said the review found that the previous board had acted in good faith in removing Mr. Altman, but had failed to anticipate the challenges that would arise from his dismissal.

“The review determined that the board’s decision did not arise from concerns about product safety or security,” Mr. Taylor said. “This was simply a breakdown of trust between the board and Mr. Altman.”

After Mr. Taylor finished his prepared remarks, Mr. Altman praised the resilience of the company and its partners during and after his dismissal. “I’m happy this is all over,” he said.

OpenAI provided a six-paragraph summary of the report. WilmerHale reviewed 30,000 documents and conducted dozens of interviews, including with former OpenAI board members.

It concluded that the previous board had accurately justified and publicly explained Mr. Altman’s termination for not being “consistently candid in his communications with the board.” He also said the board did not anticipate its action would destabilize the company.

The company said WilmerHale orally presented the report, which will not be made public, to Mr. Taylor and Lawrence H. Summers, the former Treasury secretary who was also added to the board in November.

Mr Taylor said OpenAI had made several changes intended to improve the way the company was run, including new governance guidelines for the board of directors, a new conflicts of interest policy and a line hotline for whistleblowers.

The summary of OpenAI’s report does not provide information on concerns that the company’s top executives expressed to the previous board meeting about Mr. Altman. Before his firing, Ilya Sutskever, OpenAI’s chief scientist, and Mira Murati, OpenAI’s chief technology officer, expressed concerns about Mr. Altman’s management style, including what was described as manipulative behavior. , reported the New York Times.

Dr. Sutskever, through an attorney, called the claims “false.” Ms. Murati said in a company Slack post On Thursday, she shared with the board the same comments she had provided directly to Mr. Altman, but said she never contacted the board to share those concerns.

“I am happy that the independent review is complete and that we can all move forward together,” Ms. Murati said in a message on Friday on X, formerly called Twitter.

OpenAI remains under investigation by the Securities and Exchange Commission over the board’s actions and the possibility that Mr. Altman misled investors. Companies that hire outside law firms often turn over the report to public investigators when completed. A spokesperson for OpenAI’s board declined to say whether it would provide the report to the SEC.

(The New York Times sued OpenAI and Microsoft in December for copyright infringement on news content related to AI systems.)

OpenAI, valued at more than $80 billion in its latest funding round, is at the forefront of generative AI, technologies capable of generating text, images and sounds. Many believe that generative AI could transform the technology industry as profoundly as the web browser did around thirty years ago. Others fear that technology could cause serious harm, helping to spread misinformation online, eliminating countless jobs and perhaps even threatening the future of humanity.

After OpenAI launched online chatbot ChatGPT in late 2022, Mr. Altman became the face of the industry’s push toward generative AI. About a year later, the board unexpectedly fired him, saying they no longer had confidence in his ability to run the company.

The board of directors was reduced to six people: three founders and three independent members. Along with the three outsiders, Dr. Sutskever, one of OpenAI’s founders, voted to remove Mr. Altman as chief executive and chairman of the board, saying without providing details that he would not had not been “always frank in his communications”.

Mr. Brockman, another founder, resigned from the company in protest. A few days later, Dr. Sutskever said he regretted his decision to remove Mr. Altman and that he had effectively resigned from the board, leaving three independent members to oppose Mr. Altman.

OpenAI was founded as a nonprofit in 2015, before Mr. Altman created a for-profit subsidiary three years later and raised $1 billion from Microsoft. The board of directors of the nonprofit organization, whose stated mission was to develop AI for the benefit of humanity, retained full control over the new subsidiary. Investors, including Microsoft, had no legal rights over the direction of the company.

In an effort to resolve the unrest and return Mr. Altman to the company, he and the board agreed to replace two members with Mr. Taylor, a former Salesforce executive. But Mr. Altman was not reinstated to the board. Mr. Taylor and Mr. Summers were charged with overseeing the investigation into Mr. Altman and his firing.

Microsoft, a close partner of OpenAI, holds an observer position on the board, which is held by Dee Templeton, the company’s vice president of technology and research partnerships. Microsoft on Friday declined to comment on the board and the report.

The new board has been criticized by corporate governance experts for its lack of diversity. Mr. Taylor told The Times in November that he would complement the board by adding “qualified and diverse candidates” who embodied “the fullness of what this mission represents, which is going to cover AI technology and security policy “.

Karen Weise contributed reporting.