OpenAI staff and investors swing behind Sam Altman returning as CEO

Venture backers and executives at Microsoft — which has committed more than $10bn to OpenAI and is expected to have a key role in negotiations — were exploring options this weekend including clearing out the board and reinstating Altman, according to three people briefed on the discussions.

In a memo circulated to staff of the generative artificial intelligence company late on Saturday night, chief strategy officer Jason Kwon said he was “optimistic” that Altman and co-founder Greg Brockman — who quit on Friday — would return, according to a person with direct knowledge of its contents. The memo’s existence was first reported by The Information.

According to one person with knowledge of the situation, Altman had been attempting to raise as much as $100bn from investors in the Middle East and SoftBank founder Masayoshi Son to establish a new microchip development company which could compete with Nvidia and TSMC. Those efforts, in the weeks before his sacking, had caused concerns on the board, this person said.

Altman’s firing shocked Silicon Valley. The 38-year-old has become a leading voice on generative AI, a technology which has had a breakthrough year in part thanks to OpenAI’s launch of ChatGPT in November 2022.

Altman has also become a de facto ambassador for AI start-ups, meeting presidents, prime ministers and regulators on a world tour earlier this year and speaking at the Apec Asia-Pacific regional summit in San Francisco just a day before he was sacked.

With the board and his backers at an impasse on Saturday night, Altman posted “i love the openai team so much” on X. Within an hour hundreds of employees still at OpenAI — including interim CEO Mira Murati and chief operating officer Brad Lightcap — had liked or reposted the tweet.

Investors also rallied behind Altman over the weekend. The company’s biggest venture capitalist backers — including Thrive Capital, its second-largest shareholder, Tiger Global, Khosla Ventures and Sequoia Capital — have signalled their support for Altman in whatever he does next. That includes a possible return as OpenAI’s CEO, according to several people with direct knowledge of the matter.

While they have no seats on the non-profit board which ultimately controls OpenAI, investors could refuse further backing and employees could quit the company in an attempt to force the board’s hand.

A plan to sell as much as $1bn in employee stock, which was nearing completion, is in the balance as a result of the division between the board and investors. Thrive Capital was set to lead that tender offer, which was expected to value OpenAI at $86bn.

“Since the minute [Altman was sacked] this has been in the works,” said one of the people involved in the effort to reinstate the former boss, which they expected would be concluded before the weekend was out. Investors were hoping that Altman would return to a company “which has been his life’s work” and that Mira Murati, promoted from chief technology officer to interim chief executive on Friday, would stay at the company, this person added.

Vinod Khosla, an early venture backer of OpenAI, said on Saturday evening that he wanted to see Altman back at OpenAI, “but will back him in whatever he does next”.

Microsoft, Thrive Capital, Tiger Global and Sequoia declined to comment. OpenAI could not immediately be reached for comment.

The board said it had removed Altman on Friday because he had not been “consistently candid” in his conversations with them. It has not elaborated on its reasons for firing him since then.

Andrej Karpathy, a widely respected research scientist at OpenAI, posted on X on Sunday: “The board had a chance to explain their drastic actions and they did not take it.”

The abrupt decision to oust Altman and demote Brockman has drawn attention to OpenAI’s unusual corporate structure and governance. Its directors oversee a non-profit entity that owns a for-profit company.

Unlike a typical for-profit company, which has fiduciary duties to shareholders, OpenAI’s board is committed to a charter that pledges to ensure AI is developed for the benefit of all humanity.

“They hurt the company. In a real company, there is a fiduciary responsibility. The first rule for [OpenAI’s] board is ‘do no harm’ . . . They caused the company immense harm,” said a person involved in efforts to reinstate Altman.

The board includes OpenAI chief scientist Ilya Sutskever along with independent directors Adam D’Angelo, the chief executive of Quora; technology entrepreneur Tasha McCauley; and Helen Toner from the Georgetown Center for Security and Emerging Technology.

According to investors, tensions over the speed at which the former chief executive wanted to deploy powerful AI tools had stoked board concerns that the safety of those tools could be compromised. “They had an argument about moving too fast. That’s it,” said one of the investors.