Sam Altman vs OpenAI board: The tug-of-war between commercial success and AI safety?

OpenAI was founded in late 2015. The company claims its mission is to build safe and beneficial artificial general intelligence for the benefit of humanity. The organisation was initially structured as a non-profit, believing that this model would best direct the development of safe AGI, without the burden of profit incentives. However, this idea couldn’t thrive for long.

The non-profit to capped-profit transition

After the company was formed, over the years, it became clear that donations alone would not be able to provide the computational power and the talent required to push research forward. In response to this challenge, OpenAI transitioned from a non-profit to a “capped” for-profit model in 2019. This capped-profit model allows OpenAI Global LLC to legally attract investment from venture funds and grant employees stakes in the company.

In this new structure, the OpenAI Nonprofit remained intact, with its board continuing as the overall governing body for all OpenAI activities. A new for-profit subsidiary was formed, capable of issuing equity to raise capital and hire world-class talent, but still under the direction of the Nonprofit. The for-profit subsidiary is legally bound to pursue the Nonprofit’s mission. This fundamental trait of the company led to the chaos that unraveled last week. The chasm between the for-profit and non-profit seems to have reached its limit. 

The rift within the board

The organisational structure of OpenAI has been aimed at preserving the company’s mission. However, recent events have revealed that it is not easy to pick sides, especially without. On November 17, 2023, OpenAI’s board announced the removal of CEO Sam Altman. This is not the first time a board of directors removed a CEO from the company they founded. However, they did not mince words to give it a more commercial appeal. The board stated that Altman “was not consistently candid in his communications”.

So far, the reasons behind Altman’s removal have been a subject of speculation and controversy. Some reports suggest that disagreements over the company’s direction and its commitment to safety over profit may have played a role. Elon Musk, the co-founder of OpenAI, has publicly criticised the company, suggesting that it has become a “maximum profit company effectively controlled by Microsoft”.

The aftermath

Following his removal, Altman made a move towards Microsoft. Satya Nadella, CEO of Microsoft announced that Altman will be heading a new AI research team at the company. However, in a recent interview, Nadella also dropped a hint that Altman may after all return to OpenAI. Prior to Nadella’s announcement, Altman had visited the OpenAI office in San Francisco to discuss terms of his return but the board couldn’t meet the deadline.

One of the many reasons why the board might still pivot is OpenAI’s employees. More than 500 of the 700 employees at the company wrote an open letter to the board asking them to resign and re-instate Altman failing which they would leave the company and join Microsoft. The letter has also been signed by Ilya Sutskever who was part of the board that decided to fire Altman. The corporate drama at OpenAI is still unraveling at an unprecedented pace. But what remains at stake is the future of AI, along with its risks and potential.

Also read: ‘Surprises are bad’: Microsoft CEO Satya Nadella on Sam Altman’s probable return to OpenAI

Also read: What happens to OpenAI investors? VCs consider legal action against the board that fired Altman