The board of directors in the company behind ChatGPT late friday fired OpenAI CEO Sam Altman—to many, the human face of generative artificial intelligence—is sending shockwaves through the tech industry.
OpenAI’s Chief Technology Officer Mira Murati will serve as interim CEO, the company said, adding that it will conduct a formal search for a permanent CEO.
The announcement blindsided many employees who discovered the sudden management mix-up from an internal announcement and the company’s public-facing blog.
“Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently honest in his communications with the board, which impeded its ability to exercise its responsibilities,” OpenAI said in blog without elaborating.
Greg Brockman, OpenAI president and co-founder, who stepped down from the board as chairman as part of the leadership shuffle, has left the company, he announced on the messaging platform x late on Friday. “Based on today’s news, I resigned,” he wrote.
Backed up by billions of dollars from MicrosoftOpenAI kicked off the generative AI craze last November by releasing its ChatGPT chatbot, which became one of the world’s fastest growing software applications.
Trained on reams of data, generative artificial intelligence can create entirely new human-like content that helps users complete term papers, do science homework, and even write entire novels. After ChatGPT’s launch, regulators scrambled to catch up: the European Union revised its AI law undefined, and the United States ramped up AI regulatory efforts.
Altman, who ran Y Combinator, is a serial entrepreneur and investor. He was the face of OpenAI and the wildly popular generative AI technology when he toured the world this year.
Altman submitted on X shortly after OpenAI published its blog: “I loved my time at OpenAI. it was transformative for me personally and hopefully a little bit for the world. most of all I loved working with such talented people. want more to say about what’s next later.”
Altman did not return requests for comment. OpenAI was not available for further comment.
Murati, who has worked for Tesla previously joined OpenAI in 2018 and later became the company’s Chief Technology Officer. She oversaw product launches including ChatGPT.
At an emergency meeting Friday afternoon after the announcement, Murati tried to reassure employees, saying that OpenAI’s partnership with Microsoft is stable and that its backers’ executives, including CEO Satya Nadella, continue to express confidence in the startup, a person who is familiar with the matter told Reuters.
The Information previously reported details of the meeting.
“Microsoft remains committed to Mira and their team as we bring this next era of artificial intelligence to our customers,” a spokesperson for the software maker told Reuters on Friday.
In a announcement posted on Microsoft’s website Nadella added: “We have a long-term agreement with OpenAI… Together we will continue to deliver the meaningful benefits of this technology to the world.”
Well-wishers and detractors piled into digital forums as the news spread.
On X, former Google boss Eric Schmidt called Altman “a hero of mine”, adding: “He built a company from nothing to $90 billion (Rs 7,50,000 crore) in value and changed our collective world forever. I can’t wait to see what he does next time. I, and billions of people, will benefit from his future work – it will be simply incredible.”
“This is shocking, and Altman was a key ingredient in the recipe for success for OpenAI,” said Daniel Ives, an analyst at Wedbush Securities. “That said, we think Microsoft and Nadella will exercise more control over OpenAI going forward with Altman gone.”
The full impact of the OpenAI surprise will unfold over time, but its fundraising prospects were an immediate concern. Altman was considered a master fundraiser who managed to negotiate billions of dollars in investment from Microsoft, as well as leading the company’s tender offer transactions this year that boosted OpenAI’s valuation from $29 billion (nearly Rs. 2,41,500 crore) to over $80 billion (almost Rs. 6,66,300 crore).
“In the short term, it will weaken OpenAI’s ability to raise more capital. In the medium term, it will be a non-issue,” says Thomas Hayes, chairman of hedge fund Great Hill Capital.
Other analysts said Altman’s departure, while disruptive, would not derail the popularity of generative AI or OpenAI or Microsoft’s competitive advantage.
“The innovation created by OpenAI is bigger than one or two people, and there is no reason to believe that this would cause OpenAI to relinquish its leadership position,” said DA Davidson analyst Gil Luria. “If nothing else, Microsoft’s stake and significant interest in OpenAI’s progress ensures that the appropriate leadership changes are implemented.”
As of late Thursday night, Altman showed no signs of concern at two public events. He joined colleagues on a panel on the sidelines of the Asia-Pacific Economic Cooperation (APEC) conference in San Francisco and described his commitment and vision for artificial intelligence.
He later spoke at a Burning Man-related event in Oakland, California, participating in an hour-long conversation on the subject of art and artificial intelligence. Altman appeared relaxed and gave no indication that anything was wrong, but left right after his speech ended at 19.30.
The organizer of the event said at the event that Altman had another meeting to attend.
© Thomson Reuters 2023