Also raises deep concerns on governance structure. That the board took this action without consultation with key investors is madness. That they wrote up something which made it sound like a disaster internally further eroded trust that they actually know what they are doing.
I’d expect a tough challenge ahead as msft/other stakeholders try to put guardrails in while dealing with the fact that whoever’s bright idea this coup was - is now in charge.
In a non-profit the role of a board is oversight, not appeasement of "investors" or stakeholders/donors. Why would going to them be required to determine if an executive had lied to the board?
In any board, the board's role is not strictly oversight but also working to preserve the health of the organization and to meet meet organizational goals.
Pissing off all your stakeholders with a snap decision isn't great governance. Particularly egregious circumstances might make it necessary.
Finding something wrong might require action, but a board's responsibility is also to make the corrective action in a responsible manner that is in the organization's interests.
> a board's responsibility is also to make the corrective action in a responsible manner that is in the organization's interests.
That very well may have happened here. It is important to consider that this is effectively an HR matter and that the results of employee investigations cannot be made public.
There's a lot of speculation about this whole fiasco but strictly speaking the board would risk being in breach of fiduciary--as stewards of a charity--if they believed that an executive had misled them about the use of assets. It may piss off their donors because of a personal preference for the executive in question but it would be their responsibility to act accordingly.
Yes... but my point is that this doesn't preclude them taking a couple of days to figure it out, let stakeholders know, avoid making a particularly dumb public statement, changing their mind because everyone is going to quit, etc.
Here, there's been a statement that there's no malfeasance, too.
more likely I think they found that not letting him go isn't and option due to a breakdown of communication (a formulation which normally implies a fundamental break down of trust)
but the trust of the board completely braking down doesn't mean that e.g. MS doesn't trust or want him anymore as in the end the interest the board have to defend and the ones which stake holder like MS have might be in conflict
so even if it has negative consequences if it must be done it might be easier to get it done fast and then resolve the mess instead of giving other a chance to turn it into an even bigger mess
To my eyes, and to many others, it appears the board is power-tripping. Also, OpenAI's unique structure means they have no checks on the board that an investor class would normally give.
It's difficult to envision a thriving future for OpenAI under these circumstances or a world in which they are a significant factor in AI policy. Their early market lead, still a considerable advantage, will not be sufficient to weather the storm brewed by the board's own actions. Losing their market leverage would mean ceding the influential role in shaping AI's future, potentially leaving the giants such as Microsoft, Google, Amazon, and others assuming control and steering the future course of AI, but without the creed to make AI "good."
the hybrid structure was intentional (and known by MS etc.) created to be able to do things like rain in (or fire) a CEO which is more representing the interests of the other minority stake holders then the interests of the non-profit.
So depending on the exact non-public reasons for the communication breaking down it might not be a disaster but the hybrid doing exactly what it was intended to do.
Now the real interesting question is how much MS must have been afraid to be technologically left behind to knowingly enter such a deal with such a huge investment?
> Also raises deep concerns on governance structure.
It's so strange to hear this regarding a CEO, a single person, effectively going rogue against a company's charter, but then layoffs of tens, hundreds, and thousands of workers, on the basis of zero fault of their own, by these CEOs and boards are considered good governance.
If cigarette companies could cause 5% less cancer by selling 5% fewer packs of cigarettes (resulting in 5% lower profits) do you believe they would do it?
You might say that companies have strayed from the Platonic ideal of a corporation and that cigarette companies have strayed from their “purpose” but the reality is that purely prosocial companies have never been the norm.
You might also suggest that the very fact that people are purchasing cigarettes demonstrates that they are providing “valuable” goods/services but this is to water down the definition of value to the point of meaninglessness.
The truth is that a corporation is a sort of alien entity that almost entirely operates to maximize profits. I say “almost” entirely because it is possible in extreme cases for their leadership to face personal responsibility, but it’s pretty rare.
So you're saying we already invented the AGIs that are taking over the planet, enslaving the human race and don't really care about us or the condition of the Earth?
"We are now living in a global state that has been structured for the benefit of non-human entities with non-human goals. They have enormous media reach, which they use to distract attention from threats to their own survival. They also have an enormous ability to support litigation against public participation, except in the very limited circumstances where such action is forbidden. Individual atomized humans are thus either co-opted by these entities (you can live very nicely as a CEO or a politician, as long as you don't bite the feeding hand) or steamrollered if they try to resist."
The primary purpose of a company, absent any other overriding objects in its constitution, is to act in the interests of its members (~shareholders, although not all members are always shareholders).
That usually means making money, but it's not a certainty that's what the primary purpose will be.
> It is to make money by providing valuable services to society.
I think you mean "by providing anything anyone will pay for" in this universe you describe. There are a ton of companies that provide zero or even negative valuable services to society.
And what you describe is unbridled capitalism. That's not what most people consider viable. A company is not a logical entity that satisfies "if company, then capital at all costs", although there are the few (the super wealthy) that would like it to be that way. A company is part of a complex system and thus it needs to satisfy a wide variety of conditions.
And note that my comment is reacting to the idea that firing the CEO is some sort of crime against humanity.
Companies are by and large communist dictatorships - usually there is a Great Leader (CEO), at best there's the Central Committee (board of directors). Effectively, nobody else decides the direction of the company, or makes any impactful decisions.
The rank-and-file serfs don't matter, they're expendable and interchangeable. When Dear Leadership is shaken up, it's newsworthy. When ten thousand labourers are let go, it's just a statistic.
It's totally true. I travelled around East Germany in the 80s and it looked like a bigger and less functional version of a lot of corporations. Motivational posters everywhere, mission statements like "we believe (meaning you, the workers, not us leaders) in A, B ,C", five year plans, leadership living in a world completely detached from the reality on the ground.
I don't think "agitprop" is at all a fair comparison. It might be considered troll bait, but personally I view it as pointed quasi-satire. Corporations do tend to be authority based top down structures. There is a tendency to assume stuff must be entirely top down (authoritarian, communist, etc) or bottom up (markets, capitalism, voting, etc). In reality, both types of structures have different failure modes and it works well to have layers of each type of system.
Pointing out that modern capitalism is comprised of actors that have large structural similarities to failed communist government seems like more valuable comment than your shallow and dismissive response.
"Agitprop" usually refers to praise of the state, embedded into various cultural works -- I don't think this is that.
I'll try to expand on my previous comment without using the "C" word itself, prior programming seems to have triggered an emotional reaction there.
Here are some qualities that many (if not most) corporations seem to share:
- centralized power
- collective goals (Team A has an 18 month plan to deliver V18)
- top-down approach
- bureaucratic hierarchy
- collectivist ideology (down to "we're a family, we're all in it together, do it for the company")
- controlled expression (approved list of questions for the all-hands meeting, anyone?)
- resistance to change
- top-down reforms (vc / top brass reorgs)
- limited transparency
Does that sound like traits characteristic of capitalism, or more like spooky ivan papa bear, sickle and hammer stuff?
Where the similarities end is around ownership. In an (idealized) communist system, people own the means of production; in a corporate setting, everything is owned by the organization. Of course this is a key, essential, and critical difference, and it goes all the way back to maybe the 1600's when chartered corporations first appeared; but the roots of that reach even earlier, to the aristocracy disempowered by the rise of the merchant class in the middle ages.
The idea of parasitic Majority Shareholders siphoning off any benefits created by the collective efforts of individually irrelevant and easily replaceable Individual Contributors has been with us ever since. That the corporate structures would adopt the social organization aspects of a system that was created in direct response to their relentless exploitation, well, that's just irony of the highest caliber.
Tell me you have never worked in a publicly traded without saying it.
This is EXACTLY what late stage "political" companies are like. There is no rational way to decide who gets the window office vs. the internal office. Everything is "political"
I'd say it's more the other way around - dictatorships like the Soviet Union operated like one big company. This form of critique typically uses the term "state capitalism".
OpenAI is privately held so there would be no reason for the board to announce this publicly before consulting with / informing the shareholders. Short of an impending media crisis that they needed to get ahead of this was mishandled. That doesn't mean it was mishandled, just that I don't see any evidence just yet of a valid reason to do this, they've done absolutely enormous damage to the OpenAI brand by doing this in this hamfisted way, you'd hope they at least had a good reason.
Note that the non-profit doesn't have shareholders, but the effect is much the same because the two are linked closely together and you can't affect the non-profit in such a drastic way without also affecting the for-profit arm. So they just pointed the double barrelled shotgun at their feet and pulled the trigger, twice. It will take a massive effort to restore trust in the brand, both on the commercial side and on the side of the people working there.
I don't disagree that this may have been ham-fisted or that it may have been a huge mistake. But I do think that talking to investors in the for-profit arm of the company about potentially removing the figure head has an even greater potential to backfire. There's absolutely zero chance that information wouldn't leak before they could make their move. And while it might be a nice gesture to Microsoft to inform them of their decision, the truth is that Microsoft has no stake in the non-profit OpenAI and did not have any right to know of these decisions as they were being made.
Microsoft is the one keeping the lights on and the GPUs running at OpenAI. Microsoft could utterly destroy OpenAI tomorrow if they wanted, shutting down access to their entire hosting infrastructure and most of their product lines.
The OpenAI board should have known not to piss off Satya.
I don’t see a world where MSFT invests more money into OpenAI with the current governance structure after this. The fact that MSFT didn’t have a board seat was unusual before this. Now it just makes MSFT look like fools.
> The fact that MSFT didn’t have a board seat was unusual before this. Now it just makes MSFT look like fools.
It is a 501(c)(3) even if they had all of the board members Open AI, Inc can not be run for MSFT benefit or for profit. A sympathetic board member might have tipped MSFT off about the firing ahead of time though.
Hopefully MSFT just goes off and does their own thing. I find this holier-than-thou "we're non profit and we're going to save the world how we see fit" irritating. Talking about AGI like it's an animal ready to pounce when we're quite obviously nowhere near it. Machine learning development has been sluggish for the longest time and the moment it was commercialised, there was an explosion in possibilities and development.
"AI safety" is a euphemism for "aligns with our interests." "Roko's basilisk" is nonsense science fiction babble.
Don't these events prove pretty conclusively that AI safety is not a euphemism for "aligns with our interests"? There's no way anyone at OpenAI could have expected to benefit professionally or financially from this.
This isn't about bias. Sutskever has recently been dedicated to what OpenAI calls "superalignment" (https://openai.com/blog/introducing-superalignment), the problem of future AI systems which don't do what humans want at all because they're too smart. You can dispute that research or its premises, but after it inspires a board coup at a billion dollar company, I don't think you can reasonably dispute that people believe it.
MS may not have any legal sway over the non-profit, but I wouldn't be surprised that in most cases they'd at least be consulted or given a heads-up on something like this, since it affects the for-profit bits of the org as well.
And now I expect that we see this "board" dissolved.
Frankly, as it should. If you are going to take $10B from another organization and you nuke the CEO during market hours and then later it turns out that it was just an ordinary disagreement, then you should answer for that action.
On a Friday, no less. This is actually the kind of thing that can sink MSFT's apparent "first mover" advantage in the eyes of big money. OpenAI is now fractured, and whatever work they were going to be doing on tech is now going to be devoted to figuring out WTF to do with this mess the board just created all by themselves for no apparent reason.
> And now I expect that we see this "board" dissolved.
The board has the power to dissolve itself, I am sure there(edit typo) are legal mechanisms for illegal acts, I think the IRS can revoke 501(c)(3) status but not dissolve, not sure if there are other mechanisms.
It's non-standard but I'd argue that the weird structure was designed to enable this exact type of decision to be made by the board. The non-profit board is a peer of investors like microsoft, not answerable to them like a normal company.
OpenAI might just show the world how the naive ideal we are not driven by profit but spending billions every year is never a good idea.
Those board has no stake in the company, on the other side means their have no accountability either. It is like they remote controlling the titanic, and who cares it crashes, because they are not on it.
Regardless, they made very stupid decisions now sabotaging interests and the company itself, brutally beheaded itself.
That is why he is now essential. He is the hinge of trust, and people believed his vision of OpenAI, as a company.
Ilya might be the science guy, but he 0 track record to run a company. And now he executes this badly planned coup, how would people trust him not to play such shticks in the future?
It's confusing to me why people consider this such a big deal then. Nothing has emerged that shows that he has a core piece of the ouzzle that no one else has.
wow i wish i always have what i did 15 years ago be the sole descriptor of my worth.
Openai has been really fast in delivering new features, and for me i just want it to continue on its trajectory.
> Regardless, they made very stupid decisions now sabotaging interests and the company itself, brutally beheaded itself.
The board in a real way decides what the interests of the company are since they are the majority owner. The interests they set however may or may not bring about the results they want though.
But the CEO that was done under was not sufficiently candid with the board.. I think they realized they have some risk being only a technicality that does whatever the CEO and Microsoft tell them is aligned with their mission.
Honestly given all what I have heard about Sam Altman I wouldn't be surprised (i.e. speculative) if he did systematically manipulate and deceived the board (but subtle enough to not be legally "lying" or fraud) with the intention to forth through his goals no matter weather they agree or not.
Assuming such situation happens in is noticed there is no reason to consult because it wouldn't change anything and just make things more complicated as the only action which can be taken is to fire the manipulator in power asap.
Especially some recent actions where not so much in line with the mission the board is supposed to protect push for but very much in line with giving especially Microsoft a additional competitive advantage (i.e. additional to what Microsoft payed for).
And I have seen many comments like but MS and other stake holder should have been part of the decisions and similar. But here is the think, with the specific structure of OpenAI MS and other knew from the get to go that it's a high risk investment where even through they in vest a ton of money they won't have _anything_ to say at all when it comes to decision done by the outer non-profit which is implicitly the majority owner of the for-profit OpenAI.
That's not how this works. OpenAI took investments for a reason. They benefit from the MSFT relationship. Harming that relationship will be bad for them (maybe not catastrophically bad, but significantly bad). I would be surprised if the relationship is not strained after this event since they have almost certainly created a major headache for MSFT (Satya is almost certainly fielding questions from his own board about this).
I’m pretty sure it’s catastrophically bad. OpenAI’s deal with Microsoft happened when ChatGPT took off at insane rates and OpenAI experienced scaling troubles. There was literally no one except a handful of cloud operators—Google, Amazon, Microsoft, etc. who could provide enough GPUs to keep things running. Microsoft basically stepped in and said “we’ll provide the GPUs and pay the hosting bill for half the profits.” OpenAI now runs everything, from ChatGPT inference to GitHub copilot to GPT-5 training on Azure GPU instances.
If Satya is as pissed as it sounds like he is, and if Ilya et al double down on their madness, Microsoft could back out and shut that all off tomorrow. OpenAI would be dead in the water, with no running product and no path to recovery.
Professional boards of directors are supposed to be attentive to the risks to the organization as a whole, regardless of whatever weird ass governance structure exists.
Blowing out your CEO on a Friday afternoon and then accusing him of lying is not the way to do this, and they are likely to find out why come Monday morning at about 9:30AM Eastern.
I’d expect a tough challenge ahead as msft/other stakeholders try to put guardrails in while dealing with the fact that whoever’s bright idea this coup was - is now in charge.
What a mess.