OpenAI brings back CEO Sam Altman to board

Altman is pleased the investigation is over, expressing regret for not handling the dispute with more grace and care

OpenAI CEO and co-founder Sam Altman has been reinstated to the company’s board of directors after an external investigation into the turmoil that led to his abrupt firing and rehiring in November.

The investigation, conducted by the law firm WilmerHale, found that Altman’s removal was due to a breakdown in the relationship and loss of trust between him and the prior board. It also concluded that Altman’s conduct did not require his removal.

OpenAI remained largely silent for over three months regarding the circumstances that led to the dismissal of its then-board of directors firing Sam Altman on November 17. In a statement at the time, the board accused Altman of being less than forthcoming in his communications and stated that they no longer had confidence in his leadership abilities. Less than a week later, Altman was reinstated as CEO after significant internal pressure, including threats of resignation from many within the company. Board chair Greg Brockman, in response to Altman’s removal, resigned from his position as the company’s president.

Alongside the release of the investigation findings, OpenAI also announced the addition of three women to its board of directors: Sue Desmond-Hellmann, former CEO of the Bill & Melinda Gates Foundation; Nicole Seligman, former Sony general counsel; and Fidji Simo, CEO of Instacart.

These steps are intended to demonstrate to investors and customers that the San Francisco-based AI company is working to overcome the internal conflicts that nearly caused its downfall last year, garnering global attention.

OpenAI’s conflicts largely stem from its unique governance structure. Initially established as a non-profit with the goal of responsibly developing advanced AI for the benefit of humanity, it has evolved into a rapidly expanding commercial entity still overseen by a non-profit board committed to its original mission.

A New York Times investigation released on Thursday revealed the circumstances within the company leading up to Altman’s removal, noting that OpenAI’s chief technology officer, Mira Murati, had questioned the CEO’s management style. Co-founder and chief scientist Ilya Sutskever reportedly expressed similar concerns about Altman’s alleged “history of manipulative behavior.”

Altman hinted at these allegations in a call with reporters on Friday, expressing disappointment over individuals leaking information to create discord and demoralize the team. He also acknowledged learning from the experience and apologized for a dispute with a former board member that he could have handled “with more grace and care.”

“I’m relieved this ordeal is finally behind us,” he stated.

The investigation found that the prior board had acted within its authority. However, it also concluded that Altman’s “conduct did not require removal,” OpenAI stated. The company affirmed that both Altman and Brockman were still the right leaders for the organization.

“The review determined there was a significant breakdown in trust between the prior board and Sam and Greg,” Bret Taylor, the board’s chair, informed reporters on Friday. “It also concluded that the board acted in good faith, believing at the time that its actions would address some of the perceived challenges and did not anticipate some of the resulting instability.”

Altman, supported by most of OpenAI’s staff and Microsoft, orchestrated a comeback following his sudden removal. This effort resulted in Altman and Brockman returning to their executive roles and the departure of board members Tasha McCauley, Helen Toner, and Ilya Sutskever (though Sutskever retained his position as chief scientist).

Altman and Brockman did not immediately regain their board seats. Instead, an “initial” new board of three men was established, with Bret Taylor, a former executive at Salesforce and Facebook who previously chaired Twitter’s board before Elon Musk assumed control of the platform, leading the board. The other members were former US Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo, the sole member of the previous board to remain.

OpenAI had engaged the services of the law firm WilmerHale to investigate the circumstances leading to Altman’s removal. Throughout the investigation, OpenAI reported, WilmerHale conducted numerous interviews with the company’s former board, current executives, advisors, and other witnesses. The company also stated that the law firm had reviewed thousands of documents and other corporate records.

Additionally, the board announced plans to enhance the company’s governance structure. This includes the adoption of new corporate governance guidelines, the reinforcement of policies concerning conflicts of interest, the implementation of a whistleblower hotline for employees and contractors to submit anonymous reports, and the establishment of additional board committees.

The company is facing additional challenges, including a lawsuit from billionaire Elon Musk, who was instrumental in funding OpenAI’s early years and served as co-chair of its board after its establishment in 2015. Musk claims that the company is deviating from its original mission in favor of profits.

Legal experts have expressed skepticism about the validity of Musk’s arguments, which revolve around an alleged breach of contract.

Nonetheless, Musk’s lawsuit has brought to light the company’s internal disputes regarding its unique governance structure, the level of transparency it should maintain regarding its research, and its approach to developing artificial general intelligence (AGI) – AI systems capable of performing on par with, or even surpassing, human capabilities across various tasks.

OpenAI and Microsoft are also facing lawsuits from several news outlets, including the New York Times, the Intercept, AlertNet, and Raw Story, alleging that their generative AI products infringe on copyright laws.