regular-article-logo Thursday, 07 December 2023

OpenAI's new CEO Emmett Shear says he's launching an investigation into Sam Altman's firing

Some investors of the company behind ChatGPT are exploring legal recourse against the board after it ousted Altman and sparked a potential mass exodus of employees

Our Bureau Published 21.11.23, 11:14 AM
Sam Altman

Sam Altman File

The new head of ChatGPT maker OpenAI said Monday that he would launch an investigation into the firing of co-founder Sam Altman and work to reform the company's management following a corporate shakeup that shocked the artificial intelligence world, reports AP.

The developments come after a weekend of drama and speculation about how the power dynamics would shake out at OpenAI, whose chatbot kicked off the generative AI craze by producing human-like text, images, video and music.


It ended with former Twitch leader Emmett Shear taking over as OpenAI's interim chief executive and Microsoft announcing it was hiring Altman and OpenAI co-founder and former President Greg Brockman to lead a new advanced AI research team.

Despite the rift between the key players behind ChatGPT and the company they helped build, both Shear and Microsoft Chairman and CEO Satya Nadella tweeted that they are committed to their partnership.

Microsoft invested billions of dollars in the startup and helped provide the computing power to run its AI systems. Nadella wrote on X, formerly known as Twitter, that he was “extremely excited” to bring on the former executives of OpenAI and looked “forward to getting to know” Shear and the rest of the management team.

In reply on X, Altman said “the mission continues,” while Brockman posted, “We are going to build something new & it will be incredible.”

OpenAI said Friday that Altman was pushed out after a review found he was “not consistently candid in his communications” with the board of directors, which had lost confidence in his ability to lead the company.

In a post Monday on X, Shear said he would hire an independent investigator to look into what led up to Altman's ouster and write a report within 30 days.

“It's clear that the process and communications around Sam's removal has been handled very badly, which has seriously damaged our trust,” wrote Shear, who co-founded Twitch, an Amazon-owned livestreaming service popular with video gamers.

He said he also plans in the next month to “reform the management and leadership team in light of recent departures into an effective force” and speak with employees, investors and customers.

After that, Shear said he would “drive changes in the organisation,” including “significant governance changes if necessary”. He noted that the reason behind the board removing Altman was not a “specific disagreement on safety”.

OpenAI last week declined to answer questions on what Altman's alleged lack of candour was about. Its statement said his behaviour was hindering the board's ability to exercise its responsibilities.

An OpenAI spokeswoman didn't immediately reply to an email Monday seeking comment. A Microsoft representative said the company would not be commenting beyond its CEO's statement.

After Altman was pushed out Friday, he stirred speculation that he might be coming back into the fold in a series of tweets. He posted a photo of himself with an OpenAI guest pass on Sunday, saying this is “first and last time i ever wear one of these”.

It's not clear what transpired between the announcement of Murati's interim role Friday and Shear's hiring, though she was among the employees on Monday who tweeted, “OpenAI is nothing without its people.” Altman replied to many with heart emojis.

Shear said he stepped down as Twitch CEO because of the birth of his now-9-month-old son but “took this job because I believe that OpenAI is one of the most important companies currently in existence.”

"Ultimately I felt that I had a duty to help if I could," he tweeted.

Altman had helped catapult ChatGPT to global fame and in the past year has become Silicon Valley's most sought-after voice on the promise and potential dangers of artificial intelligence.

Threat of legal action

Some investors in OpenAI, makers of ChatGPT, are exploring legal recourse against the company's board, sources familiar with the matter told Reuters on Monday, after the board ousted CEO Sam Altman and sparked a potential mass exodus of employees. Sources said investors are working with legal advisers to study their options. According to a Reuters report, it was not immediately clear if these investors will sue OpenAI. Investors worry that their hundreds of millions invested in OpenAI, a crown jewel in some of their portfolios, could suffer catastrophic losses as a result of what appears to be a potential collapse of the hottest AI startup in the rapidly growing generative AI sector.

By Monday, most of OpenAI's more than 700 employees threatened to resign unless the company replaced the board. OpenAI's board fired Altman on Friday after a "breakdown of communications," according to an internal memo seen by Reuters.

What made the case unusual for VC investors, who usually hold board seats or voting power in their portfolios, is OpenAI is controlled by its non-profit parent company OpenAI Nonprofit, which was created to benefit "humanity, not OpenAI investors."

As a result, employees have more leverage than the venture capitalists who helped pay their salaries, said Minor Myers, a law professor at the University of Connecticut.

Microsoft owns 49 per cent of the company, while other investors and employees control 49 per cent, with 2 per cent owned by OpenAI's nonprofit parent.

Follow us on: