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Why did OpenAI fire CHATGPT inventor and CEO Sam Altman?

Photo: OpenAI CEO Sam Altman

The CEO of OpenAI, Sam Altman, widely regarded as the human face of generative AI, was ousted by the company’s board that created ChatGPT on Friday, shocking the tech community.

The firm announced that it will hold a formal search for a permanent CEO and that Mira Murati, Chief Technology Officer of OpenAI, will take over as temporary CEO.

“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 blog post stated without going into further detail.

As part of a management transition, OpenAI president and co-founder Greg Brockman announced his resignation from the firm late on Friday on messaging platform X. Brockman also resigned as chairman of the board. He wrote, “I quit based on today’s news.”

The departures took many employees aback, as they learned of the sudden change in management only through internal communication and the company’s publicly accessible blog. Brockman asserted that he and Altman were both surprised by the board’s decision, which they learned just minutes after it became public.

On X, the former Twitter, he wrote, “We too are still trying to figure out exactly what happened,” but he assured everyone that everything will be OK. There will soon be more incredible things.

Now numbering four, the board comprises OpenAI’s Chief Scientist, Ilya Sutskever, and three independent directors who own no stock in the company. When contacted to comment on Brockman’s assertions, the group did not respond immediately.

Funded by billions from Microsoft (MSFT.O), which is not represented on the non-profit board regulating the firm, OpenAI launched ChatGPT last November, sparking the generative AI craze. The software application known as the chatbot has experienced rapid growth globally.

Generative AI can produce human-like content and has been trained on massive amounts of data. It can assist users in writing term papers, science homework, and even whole novels. Following the debut of ChatGPT, regulatory bodies hurried to catch up. The United States initiated measures to regulate AI, while the European Union updated its AI Act.

Altman is a serial investor and entrepreneur who oversaw Y Combinator. He represented OpenAI and the enormously popular generative AI technology throughout this year’s global tour.

Not long after OpenAI released its blog, Altman wrote on X, saying, “I had a great experience working with OpenAI. It changed the world a little bit, and it changed me personally as well. Above all, I really enjoyed working with such gifted individuals. will talk more about what comes next later.”

Requests for comments from Altman were not answered. Murati, who previously worked for Tesla, joined OpenAI in 2018 and rose to the position of CTO. She was in charge of several product launches, including ChatGPT.

According to someone familiar with the situation who spoke to Reuters, Murati attempted to reassure staff members during an emergency all-hands meeting on Friday afternoon following the announcement. He stated that OpenAI and Microsoft have a stable partnership and that the company’s supporters, chief executive Satya Nadella, still have faith in the startup.

The information has previously been published as meeting details. On Friday, a Microsoft representative told Reuters that the software company is “still committed to Mira and their team as we bring this next era of AI to our customers.”

“We have a long-term agreement with OpenAI,” Nadella stated on Microsoft’s website. We will keep bringing this technology’s significant advantages together.”

TERRORISM

OpenAI debuted in 2015; thus, this is not the first shakeup. Elon Musk, the CEO of Tesla, was formerly its co-chair. Other executives left the company in 2020 and founded a competitor, Anthropic, which asserts that it prioritizes AI safety.

As word of the most recent shuffle spread, well-wishers and detractors flocked to internet forums.

In an interview with X, former Google CEO Eric Schmidt referred to Altman as “a hero of mine,” saying, “He built a company from nothing to $90 billion in value and changed our collective world forever.” I am eager to follow his next move. His future efforts will be highly beneficial to me and billions of other people.

Daniel Ives, an analyst at Wedbush Securities, stated, “This is shocking, and Altman was a crucial component in the formula for the success of OpenAI.” “That said, we believe Microsoft and Nadella will exert more control over OpenAI going forward with Altman gone.”

Though its funding prospects were an immediate concern, the full impact of the OpenAI surprise will be seen over time. Renowned for his adept fundraising skills, Altman facilitated billion-dollar investments from Microsoft and oversaw the company’s tender offer transactions this year, propelling OpenAI’s valuation from $29 billion to over $80 billion.

“Shortly, it will hinder OpenAI’s capacity to obtain additional funding. According to Great Hill Capital’s chairman, Thomas Hayes, it won’t be a problem in the medium run.

Despite being upsetting, several analysts suggested Altman’s exit will not undermine the appeal of generative AI, OpenAI, or Microsoft’s edge over rivals.

Gil Luria, an analyst at D.A. Davidson, said, “The innovation that OpenAI created is bigger than any one or two people, and there is no reason to think this would cause OpenAI to cede its leadership position.” “If nothing else, Microsoft’s stake and significant interest in OpenAI’s progress ensure the appropriate leadership changes are being implemented.”

Altman appeared unfazed at two public engagements as late as Thursday night. He shared his vision and commitment to AI with other peers at a panel discussion on the fringes of the Asia-Pacific Economic Cooperation (APEC) conference in San Francisco.

He later spoke at a Burning Man-related event in Oakland, California, where he had an hour-long discussion about AI and art. Altman appeared at ease and did not appear to be experiencing any discomfort. Still, he promptly left the venue around 7:30 p.m. Altman had another meeting to attend, as the event organizer announced during the gathering.

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