OpenAI’s board is no match for investors’ wrath

On Friday, the board of OpenAI, the AI startup behind ChatGPT and other viral AI-powered hits, did something unexpected but seemingly well within its right: removed the company’s CEO, Sam Altman.

But judging by how the situation’s unfolded, it seems that OpenAI’s investors and partners — and many of its employees — were more comfortable with the idea of the board’s power than it exercising that power. And they didn’t count on the cult of personality surrounding Altman, the former president of Y Combinator and a longtime fixture of the Silicon Valley startup scene.

On Saturday evening, just over 24 hours after the OpenAI board unceremoniously announced that Altman would be replaced by Mira Murati, OpenAI’s CTO, on a temporary basis, multiple publications published reports suggesting that the OpenAI board was in talks to have Altman return at the helm.

What changed their mind? The ire and panic, of investors, no doubt — and rankled ranks.

Satya Nadella, the CEO of Microsoft, a major OpenAI partner, was reportedly “furious” to learn of Altman’s departure “minutes” after it happened, and has been in touch with Altman — and pledged to support him — as OpenAI backers (in particular Tiger Global, Sequoia Capital and Thrive Capital) recruit Microsoft’s aid in exerting pressure on the board to reverse course. Meanwhile, some key venture capital backers of OpenAI are said to be contemplating a lawsuit against the board; none, including Khosla Ventures and LinkedIn co-founder Reid Hoffman, a former OpenAI board member, were given advance notice of the decision to fire Altman.

Khosla Ventures founder Vinod Khosla said the fund wants Altman back at OpenAI but will back him in “whatever he does next.”