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OpenAI is the parent company behind the well-known ChatGPT that took the world by storm upon its launch on November 30, 2022. The unexpected removal of Sam Altman as the CEO by the board members of the company on November 18, 2023, has once again put it under the spotlight. This move has also led to approximately 95% of the employees threatening to resign from their positions, according to Evan Morikawa, the firm's engagement manager.
The staff members are demanding that the board members resign while accusing them of undermining Altman's contribution to the company. On the other hand, Microsoft, where Altman now works, has also extended an offer to recruit the OpenAI employees who have threatened to quit.
This article explores the entire OpenAI controversy in detail.
A complete timeline of the OpenAI and Sam Altman controversy
Start of OpenAI
Sam Altman was one of the founding board members of OpenAI. With a funding pledge of $1 billion from big names such as Elon Musk, Amazon Web Services, and Infosys, the company was launched in 2015. However, it was later revealed that the actual sum received was only a portion of what was promised, amounting to a mere $130 million until 2019.
In 2017, a report titled "Improving Language Understanding by Generative Pre-Training" was released by OpenAI. It focused on the idea of a Generative Pre-trained Transformer (GPT), a machine learning model, also known as a neural network. It performs similar tasks to the human brain after being trained on sizable data sets. The outputs it generates are responses to queries from users.
Moving away from a non-profit structure
By 2019, infrastructural costs and employee compensation led to the firm transferring from a non-profit basis to two organizations, namely OpenAI Global LLC and OpenAI Inc. The former began operating on a capped-profit basis, meaning the return on any investment was capped at 100 times the original amount.
Altman was instrumental in gaining an investment of $1 billion from Microsoft for the company in 2019, aiming to commercialize its technologies and utilize the money within the next five years or possibly even earlier.
Eventually, after a few years of development, in December 2022, a free public preview of ChatGPT-3.5 was released. As per data provided by the firm, the preview received over a million signups within the first five days of its launch. On January 23, 2023, the company received another $10 billion worth of funds from Microsoft.
Ousting of Sam Altman
An announcement made by the company on its website on November 17, 2023, stated that the board members of the company did not have confidence in Altman to continue to lead the company and, hence, were replacing him for the position of CEO:
"Mr. Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI."
Following this, the former president and chairman of OpenAI and a supporter of Altman, Greg Brockman, who was also removed by the board from his position, also resigned. Three other senior researchers left their positions at the company promptly after.
This slowly sparked a wave of condemnation from the employees towards the board for the sudden change in administration. On November 20, 2023, a letter directed toward the Board of Directors was written by the employees, asking for the board to resign and threatening to resign themselves if the board does not comply. The employees stated:
The process through which you terminated Sam Altman and removed Greg Brockman from the board has jeopardized all of his work and undermined our mission and company. Your conduct has made it clear you did not have the competence to oversee OpenAl."
Further, they asked for Altman and Brockman to be reinstated, along with the appointment of two new lead independent directors.
The letter has been signed by a whopping 700+ employees, as per Morikawa, one of the letter's organizers. This constitutes nearly 95% of the company according to him.
On the other hand, Microsoft, which recently acquired Activision Blizzard, is reportedly offering positions to employees if they so choose to leave OpenAI in Altman's support at this time.
Satya Nadella, the CEO of Microsoft, took to X to welcome the former OpenAI CEO to the company and stated that Altman and Brockman, along with their colleagues who choose to join the tech giant, will join Microsoft and lead a new advanced research team.
Employees from the Chat-GPT parent company may possibly join this team if the board of directors of the company does not heed their demands.
