The Winners and Losers in Sam Altman's OpenAI Kingdom
So far, that is. This saga has only reached the end of the beginning
After almost five days, he's back: Sam Altman returns to OpenAI as its chief executive officer, the very same position he had held just 110 or so hours prior, in what will come to be known in Silicon Valley as "the time before OpenAI imploded."
But this saga has only reached the end of the beginning. We go into the Thanksgiving break wondering what happens next, and what it will mean for the future — not just for OpenAI, but AI more broadly.
A new interim board for OpenAI has been formed. It includes Bret Taylor, former Salesforce Inc. co-CEO; Larry Summers, a Clinton-era Treasury secretary and a paid contributor to Bloomberg Television; and Adam D'Angelo, CEO of Quora Inc., who stays on from the previous board. More will join them — the finalized board will have up to nine directors in total. We'll be able to draw bigger conclusions about OpenAI's direction once we know who they are.
For now, the simplest interpretation is that this is a huge win for Microsoft Corp. and its CEO, Satya Nadella. The $2.8 trillion tech giant, which relies heavily on OpenAI as its partner in the AI revolution, has successfully protected its investment, without having to hire around 700 OpenAI engineers, as had once seemed plausible or even probable.
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They're not the only winners. Here's my take on who's come out on top after this week. However, given the spectacular pace of events, it's subject to change.
WINNERS
Satya Nadella — Had OpenAI collapsed, serious questions would have been raised about how Microsoft could have so carelessly left itself exposed. Even if it could hire much of OpenAI's talent, the amount of time and money that would have been spent getting the new subsidiary up to speed may have been enormous.
The whole operation would have become mired in lawsuits as other OpenAI backers sought to claw back whatever value they could from their investments. On top of that, an influx of new talent, stuffed into the corner of a Microsoft office, wouldn't have won Nadella many favors from within his own rank-and-file, still reeling from recent layoffs. Guess we'll never know.
Nadella could have no doubt done without the stress, but he's absolutely come out smelling of roses. "We're never going to get back into a situation where we get surprised like this ever again," he told Kara Swisher on a podcast on Monday. I'll bet they won't.
Sam Altman — With a fresh mandate to press ahead with his vision of where AI should go, the face of the AI revolution is now the unquestionable decision maker at OpenAI. Can anyone stand in the way of King Sam the Unsackable? Emboldened by new allies — such as Taylor now on the board — Altman will have more protection and likely much less resistance to his commercial instincts.
It always seemed unlikely that Altman would ever be satisfied as a mere employee of a big tech company — he's a startup guy at heart — and his tangle of outside interests would have proven cumbersome and potentially conflicting were he full-time on Microsoft's payroll.
The simplicity of profit — This entire affair has been a win for those who think the idea of a nonprofit owning a for-profit entity is a folly, serving only to introduce unpredictable motives and irrational thinking (such as firing your world-famous CEO).
As I touched upon earlier this week, regardless of the merits of the board's choice, the undeniable fact is that the "power" of OpenAI's board crumbled once the real heavies — those who have money, and data centers — began throwing their weight around. It was a capitalist company after all!
Sure, OpenAI could have existed, and continue to exist, in a different form without the multibillion-dollar backing, but it would have meant a wholly less successful and lavish affair. (Axios' description of Microsoft as being OpenAI's "sugar daddy" was particularly amusing, and depressingly accurate.)
Book publishers — After years of bountiful material offered up by villainized CEOs such as Travis Kalanick, Elizabeth Holmes and Sam Bankman-Fried, publishers might have worried the tech-founder-gone-wild genre was going stale. Fear not.
LOSERS
The AI competition — What looked set to be a hiring free-for-all for the best and brightest in AI talent has been stopped in its tracks. Pleas from Salesforce ("Send me your CV directly," said CEO Marc Benioff), Nvidia Corp. and others don't seem likely to have drawn much talent from OpenAI's ranks.
And while potential clients of OpenAI were looking into alternatives because of the turmoil, the resolution may have come just quickly enough to stop any meaningful number of them jumping ship.
The old board — D'Angelo gets to keep his old seat but, in an attempt to offer a fresh start, Tasha McCauley, Helen Toner and Ilya Sutskever have all lost their place on the board.
Their stepping down caps a dismal few days in which an entire industry looked on aghast. Not just at the decision to remove Altman, but at the chaotic way in which it was orchestrated — with little communication and no concrete examples of the behavior they were said to be so troubled by.
A research paper written by Toner, which leveled some criticism at OpenAI's approach to safety, was said to be a contributing factor in the breakdown of goodwill. Her warnings may one day prove prophetic. As they left, Toner and McCauley secured a commitment that Altman's leadership would be subject to an independent investigation. They maybe should have done that first.
Emmett Shear — The former Twitch CEO must have thought he'd hit the jackpot. Just months after leaving Amazon.com Inc. — which acquired Twitch in 2014 — Shear suddenly found himself interim CEO of the most talked-about startup in the world. This opportunity likely seemed somewhat less exciting when much of his workforce reportedly flicked a middle-finger emoji in response to his surprise appointment.
Once it became clear Shear took the job without having clarity of what had transpired with Altman, things turned more than a little embarrassing. Then we learned he was the board's third choice. It's unclear what role he'll play now.
Effective altruists — As we explored earlier in the week, it's been a damaging time for effective altruists, those people who were meant to be a check on corporate power and focused on doing good — or, more to the point, not doing bad.
OpenAI's board was set up in such a way that concerns over the technology, and its possible impact on the safety of the human race, would be considered alongside the obvious commercial opportunity. After this week, those voices now seem to have been pushed out from OpenAI.
The human race — See above.
X — In some respects, it was like the good old days on what we once knew as Twitter. The social network was the drumbeat of a major news story, as well as a platform for rebellion. OpenAI's employees posting heart emojis to show allegiance to Altman was a reminder of what once made Twitter so powerful.
And yet, X's owner Elon Musk was more occupied with filing a chilling lawsuit attacking the free speech of a nonprofit and dabbling in the ludicrous Pizzagate theory. (And then, as if things couldn't get any more serious, Paris Hilton quit her marketing deal.)
JURY'S OUT
Thrive Capital — Prior to this week's mess it was reported that venture capital firm Thrive Capital was about to lead a tender offer to buy OpenAI employee shares in a deal that would value the company at more than $80 billion. Thrive has signaled its intent to go ahead with that plan. But how soon, and at what value, isn't clear.
Ilya Sutskever — The OpenAI chief scientist's monumental decision to side with the altruists on the board was what tipped the majority against the CEO. Later, he went on X to say he regretted it. Altman responded with a heart emoji in a possible sign of forgiveness. But, I dunno, man.
This column — It's been a banner week for journalistic caveats. Whether its "emergency" podcasts declaring precisely when they were recorded, or newsletters making it quite clear that by the time it lands in your inbox, the OpenAI world may be again turned upside down.
So here's mine: I'm finishing this piece just as news of Sam Altman's reinstatement as chief executive has just been announced. Who knows what happens from here?
Dave Lee is Bloomberg Opinion's US technology columnist.
Disclaimer: This article first appeared on Bloomberg and is published by a special syndication arrangement.
