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  • Writer's picture Will Paraskeva

Return of the Jedi (or Sith): What happened in OpenAI’s failed Coup d'état?

November 17th to November 21st will be permanently etched into OpenAI’s history after the failed defenestration of the king of generative AI, Sam Altman. Although he has since been reinstated as the CEO of the company, many questions remain. Why was he fired, why was he brought back and what does the future hold for AI and the firm? 


A typical tech guru, Sam Altman is an entrepreneur, investor, and programmer. In 2014, he achieved a huge milestone with his efforts at the technology incubator, Y-Combinator, leading to him being named president of the firm. With his continued success, he was brought on as a co-founder of open AI in 2015, working with tech giants such as Elon Musk and Greg Brockman, establishing himself as a heavyweight in the tech industry.


In contrast to other corporate AI developers, like Google, OpenAI was initially a not-for-profit research laboratory, with the noble aim of developing generative AI for the good of humanity. However, with the unsurprisingly high cost of creating advanced technology, more funds were needed for development and to attract the top engineers in the field. As such, a for-profit entity was established which was governed by the board of the non-profit segment. Furthermore, outside investment was brought in from limited partners, with Microsoft pumping $10 billion into the firm and acquiring a 49% stake. Consequently, an ironic corporate structure was formed, with the altruistic not-for-profit board overseeing the actions of the commercial, profit-seeking subsidiary. 


Friday the 17th of November marked the start of the feud, with the board stating that they “No longer had confidence” in Altman’s ability to lead the company and held concerns about the lack of consistent and transparent “Communication with the board”. This was swiftly followed by the firing of Greg Brockman, leaving Ilya Sutskever as the last remaining co-founder present in the company. Despite the board's poor presentation of Altman, the tech world jumped to his side, with Microsoft demanding his reinstatement, even offering him a role as the head of their AI research team. The situation turned even bleaker for OpenAI as 747 out of their 770 employees signed a letter threatening to join Microsoft if Altman wasn’t granted a return. 


Though elements of a cult of personality did motivate employees to remain at Altman’s side, with a staffer noting that many would “die in the trenches with him”, monetary influences also drove the signing of the letter. In the lead-up to the drama, OpenAI was exploring a share sale which would enable employees to liquidate their stakes in the company. This deal would reportedly value the company at 86 billion dollars. Thus, any uncertainty over these developments would have simply driven investors away, diminishing the value of the shares. 

Regardless of the motivations, the mounting pressure resulted in Altman’s reinstatement and the replacement of the previous leadership with 3 new board members on the 21st of November, allowing the survival of Open AI and Microsoft’s large investment. Ultimately, the situation exposed the lack of power that the not-for-profit element of the business had. Though they were concerned about the risk of Altman abusing the commercialisation of generative AI, they were hopeless to do anything due to the wave of resistance. Additionally, though the board may attempt to work with investors, if they lose too much support then the stream of capital will dry up. 


The drama has prompted questions over the safety of AI as the arms-race style of competition heats up. Will the benevolent development of AI continue in the future, or has the age of philanthropic advancement ended? 


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