14 ms·

No "malfeasance" behind Sam Altman's firing, OpenAI memo says

189 points by Amorymeltzer 3y ago

fnordpiglet 3y ago
I think this will ultimately be good for everyone, however I can imagine there’s a huge populace of OpenAI employees hoping this was a get rich quick route and are rethinking that. I know OpenAI has a different structure for reward than typical equity, but there had to be the thought this was going to be bigger than Apple and Google combined and there would be legions of billionaires in the making. If I were one of them, I would be seriously thinking about how to value my future at OpenAI.
- almost_usual 3y ago
  Brought this up in another thread and was downvoted. But yes the 900k compensation package was probably more than 600k PPU equity which is worth who knows what now. https://www.levels.fyi/blog/openai-compensation.html https://www.levels.fyi/blog/openai-compensation.html Only a few days ago there was a post here about them poaching researchers with “10M” equity compensation packages.. https://news.ycombinator.com/item?id=38258406 https://news.ycombinator.com/item?id=38258406
  - lumost 3y ago
    This could yield a lawsuit at some point if those PPUs are worthless due to the board refusing to allow profits…
    - almost_usual 3y ago
      Right, PPUs are worthless until profitability but the board doesn’t want to be profitable?
      - lumost 3y ago
        I don’t believe offering PPUs as compensation when you intend never to be profitable is entirely legal
        dragonwriter 3y ago
        For a salaried position where the base salary is above the legal minimum salary for wage & hour exemption, I don't see what the legal problem would be.
        junofan 3y ago
        Tortious interference? It’s pretty textbook right?
        dragonwriter 3y ago
        > Tortious interference? How? > It’s pretty textbook right? No? Offering a compensation package can't be tortious interference, tortious interference requires an existing contract, and action by a third party that (along with a whole bunch of other conditions) causes a breach of that contract.
        junofan 3y ago
        Well, you have to specify a jurisdiction. Let’s go with California since that’s where a lot of OpenAI’s employees are. Here’s what you need: 1. an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff; 2. the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; 3. the defendant was negligent; 4. and such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship It’s pretty open and shut, no?
    - dragonwriter 3y ago
      > This could yield a lawsuit at some point if those PPUs are worthless due to the board refusing to allow profits… A lawsuit based on what? The OpenAI Global LLC operating agreement has a prominent notice... https://images.openai.com/blob/142770fb-3df2-45d9-9ee3-7aa069acada1/image1.png https://images.openai.com/blob/142770fb-3df2-45d9-9ee3-7aa06... from https://openai.com/our-structure https://openai.com/our-structure
      - almost_usual 3y ago
        OpenAI recruits employees based on equity packages that will not amount to anything based on their operating agreement. Live and learn I guess.
- shinryuu 3y ago
  I'm sure they are pretty well paid either way. It's not like they would easily be able to go to another company and get better paid?
- rbera 3y ago
  Good. Considering they’re already getting millions in comp, I’d rather have people working on AGI that aren’t in it solely for the money. And it’s not like Cohere or Sam’s next company won’t be trying to poach researchers anyway, but at least one company (OpenAI) isn’t going for profit for sure now.
- realce 3y ago
  I hear Cyberdyne is hiring if that's your attitude about creating AGI.
- zeven7 3y ago
  And now Sam is free to start another company which is incentivized by profit, giving him the ability to easily gobble up the part of the talent at OpenAI that was hoping for that.
  - cmcaleer 3y ago
    Or he gets to return to OpenAI and have a Steve Jobs style cull of the board. Either way as someone who enjoys the drama I’m stoked.
  - p_j_w 3y ago
    Why do so many people buy into this belief that Sam Altman was the special sauce in OpenAI?
    - cmcaleer 3y ago
      Is there a compelling narrative to think that he wasn’t useful?
      - fnordpiglet 3y ago
        His title: CEO
    - zeven7 3y ago
      He’s not the only one. But at least 4 top people have already left because of him leaving. He can clearly take people with him. That’s the comment you’re responding to. His power isn’t him alone. It’s everyone he brings with him.
  - deleted 3y ago
    [deleted]
- ChildOfChaos 3y ago
  Really? I'd be way more inclined to be pessimistic about it. OpenAI is massively ahead of anyone else in the AI space, anything that shows problems in the organisation seems like it could set us back massively in the development of AI. Several key people at OpenAI have also resigned, including Greg Brockman who was removed from the board but told he was too important so would remain in his other roles, he also tweeted not to worry bigger things are coming. If Sam breaks away and does something else in this space, I can see others joining him and although competition is deathly, I feel like it is just going to fracture our AI developments, everyone is trying to catch up with OpenAI, any new company would be starting from scratch and be years away from anything useful while also leaving OpenAI a shell of it's former self. Hopefully not the start of bigger issues at openAI.
  - fnordpiglet 3y ago
    A flip side, AI development fragmentation will mean many more techniques are tried and know how diffuses into a much broader market. This has the likelihood of greatly accelerating everything. Further, by lopping off the top of OpenAI you create space for new people to grow and learn and lead. In the very short term it’s disruptive. In the medium and long term it’s probably a wonderful thing to soften the ground a bit and let competition take hold.
TillE 3y ago
This seems to align with the stuff Kara Swisher was hearing, and suggests Sam was "not consistently candid" about product announcements or something similar.
waihtis 3y ago
They can spin it how they want, but it'll 100% turn out to be a AI doomerist panic reaction. They didn't even inform MSFT about it which is absolutely ridiculous
- nvm0n2 3y ago
  Yeah it seems like not entirely candid may turn out to be something like "he said he was a super-doomer and pinky swore it to us, but then we realized he wasn't doomer enough for us". If it's not malfeasance about finance, business, safety or security practices and is merely a "breakdown in communications" then that rules out virtually everything that could justify such an abrupt firing. Sounds like there's no legal problems to worry about, leaving an incompetent board as the only obvious possibility left. When I was younger I remember thinking non-profit orgs were awesome and hoping to work in that space one day. This + the Wikimedia Foundation funding scandal + the proliferation of "misinformation" NGOs has really turned me off the whole concept. Nonprofits seem to have more than their fair share of problematic governance. There's something about commercial trade that grounds people.
  - anonymouskimmer 3y ago
    > There's something about commercial trade that grounds people. It's called shareholder lawsuits. I really do wonder about boards of non-public companies, though. I'd expect them to be, on balance, not much different from NGO boards or even HOA boards.
- basisword 3y ago
  In retrospect, it wasn't the brightest move for Microsoft to be baking this in to their OS, Office suite, search engine, etc. Having a core feature of your core products depend on a startup with a bizarre profit/non-profit structure is idiotic. Amazing they haven't been building this tech themselves - maybe that's their next move. Poach as many of the OpenAI staff as they can and build in-house.
  - ilikehurdles 3y ago
intellectronica 3y ago
Serious wrongdoing with smoking gun would have been the only justification for the board acting the way they did. This reflects very poorly on the OpenAI board. And makes it more likely that this affair is far for complete.
- fulladder 3y ago
  Agree completely. Badmouthing someone as you fire them is immature, and would only be warranted in some kinds of very extreme circumstances, which this does not appear to be. I predict that this is the beginning of the end for OpenAI. The company won't collapse overnight or anything, but its best people will start leaving in January, then its average people will leave over the course of 2024, and there will be little left by 2025. They may have enough money to live on as a zombie company for several years after that, but everyone will know that it is no longer what it once was or could have been.
  - intellectronica 3y ago
    That sounds very plausible. Another option is that as more information like this becomes public pressure will mount next week to restructure the board and the organisation and try to repair things.
    - intellectronica 3y ago
      Turns out we didn't have to wait for next week - that's what is already happening this weekend.
- ansk 3y ago
  One conceivable situation in which the board's behavior could be justified is if Ilya presented them with an urgent ultimatum: either Sam goes or I go. If the rift between Sam and Ilya was growing to the point that Ilya would rather leave the company than continue with Sam, it's a rational move for him to propose this. At this point the remainder of the board would be forced to make a decision as to whether Sam or Ilya is more vital to advancing OpenAI's mission. Choosing Ilya over Sam would certainly be a justifiable decision in such a scenario.
leroy_masochist 3y ago
I can't find the exact quote, but I distinctly remember Sam giving founders advice along the lines of, "operate under the assumption that co-founders and investors are not going to screw you". Pretty sure it was a Startup School lecture at some point. That still may be good life advice in general (even if it wasn't for Sam in this case) but what I really don't get is the fact that OpenAI's board governance was structured in a way such that this was even possible. I also don't understand what is to be gained from the perspective of the remaining senior leaders at the company. This is a tremendously momentum-killing event. I cannot think of a single facet of their day-to-day operations, product roadmap, competitive position, etc. that would be improved by this decision. Yesterday, when this was announced, I was bracing myself for some truly awful news about something that Sam had done in his personal life that was about to be divulged, since that is the only possible rational reason for the board to make the decision it did. What am I missing? It's all so strange.
- psadri 3y ago
  Ultimately one important job of the board is to be able to replace the CEO. So it would be odd if it was structured in a way that this wasn’t possible.
  - leroy_masochist 3y ago
    > Ultimately one important job of the board is to be able to replace the CEO. This is true in the abstract but it is not common to see the narrowest possible majority on a six-person board oust the co-founder/CEO (also a board member) while excluding the board chair (who was also the company's President and co-founder) from the process. > So it would be odd if it was structured in a way that this wasn’t possible. You are wrong here. Boards are usually structured so that what just happened at OpenAI is not possible. The exclusion of the board chair from the process is especially egregious and the involvement of board chairs in decisions of this magnitude is often mandated in documents of incorporation. Matt Levine is going to have a field day with this, LOL.
    - psadri 3y ago
hn_throwaway_99 3y ago
Wow, I'm pretty shocked how this all went down. Given the abrupt nature of the announcement and the pointed message in it (essentially accusing Altman of lying), I was sure there must have been some big scandal, not just normal boardroom differences of opinion and game-of-thrones-style maneuvering. Even if I agree with Sutskever's general position, I think his actions here were colossally stupid. He's basically managed to piss off a ton of people, and I have no doubt lots of employees will just shift to whatever Altman and Brockman end up doing, or else there will otherwise be some huge splintering of OpenAI talent.
- lumost 3y ago
  Also raises deep concerns on governance structure. That the board took this action without consultation with key investors is madness. That they wrote up something which made it sound like a disaster internally further eroded trust that they actually know what they are doing. I’d expect a tough challenge ahead as msft/other stakeholders try to put guardrails in while dealing with the fact that whoever’s bright idea this coup was - is now in charge. What a mess.
  - CPLX 3y ago
    Non profits don’t have investors.
  - mmcwilliams 3y ago
    In a non-profit the role of a board is oversight, not appeasement of "investors" or stakeholders/donors. Why would going to them be required to determine if an executive had lied to the board?
    - mlyle 3y ago
      In any board, the board's role is not strictly oversight but also working to preserve the health of the organization and to meet meet organizational goals. Pissing off all your stakeholders with a snap decision isn't great governance. Particularly egregious circumstances might make it necessary. Finding something wrong might require action, but a board's responsibility is also to make the corrective action in a responsible manner that is in the organization's interests.
basisword 3y ago
Either the board is now lying to the employees, or the board monumentally fucked up with their communication publicly (vaguely indicating some serious wrongdoing in their statement yesterday). Either way, the board look like morons. Concerning they're now in charge of some pretty powerful and important tech.
- solarkraft 3y ago
  I agree that this looks ... weird and uncool. But on a cursory look it seems to me like the boards' intentions are the right ones, while Sam seemed intent on making the most money possible with no regard for any of the Org's founding principles. It's why the "Open" in the name had become a joke. I had no hope that OpenAI would ever deliver on its original mission, because when has a commercial takeover ever been reversed? This may or may not kill OpenAI's lead, but maybe at least it will bring back openness ...
  - laurels-marts 3y ago
    and what will you do with all that openness? i personally hoped that openai would continue to innovate and ship at insane speeds, continue to cut costs so i can continue to use their apis. providing the best ai for the lowest possible price is how they would have made me and the rest of the world better and more prosperous. now we'll have to wait and see what they actually deliver.
- rbancroft 3y ago
  I'm not a lawyer but their original announcement seemed very close to libel and I would think Sam has some legal options should he choose to pursue them.
- fudged71 3y ago
  I think the fact that their largest partner and shareholder, Microsoft, wasn’t made aware of this earlier, or even given the chance of having this news drop after trading hours, shows the incompetence.
eastbound 3y ago
If it happens to only be miscommunication, that will be the biggest blunder of economic history caused by misunderstandings. If true, Sam would have kept his job just by communicating more and better. If true, the board wouldn’t have a lose CEO in the wild and talents now possibly trying to build a competitor…
martythemaniak 3y ago
I'm curious what recourse Microsoft has, if any. Presumably there's some clause protecting them against openAI self-immolating? Interestingly, the situation is fully reversible for now: 1. Majority of employees sign a strong letter condemning the board and calling for their resignation. 2. MSFT threatening to activate whatever protective clause they have 3. Other investors/donors threatening lawsuits. 4. Sustkever et all resign, new board appointed and Sam and Greg come back. Things could be back to business as usual by Monday morning.
- dragonwriter 3y ago
  > I'm curious what recourse Microsoft has, if any. Presumably there's some clause protecting them against openAI self-immolating? Given the disclaimer attached to the OpenAI Global LLC (the entity Microsoft is directly invested in) operating agreement that is also reposted on OpenAI's own description of its structure about how investment in the firm should be treated as a donation, and that the firm has no obligation to seek profit, and its primary goal is to serve the charitable mission of the nonprofit and that that will trump all other concerns including profit, I doubt very much that that is the case. Now, if there was actual evidence that the board (which is, remember, the board of the nonprofit) was not making a bona fide effort to serve its understanding of the charitable purpose of the nonprofit, but instead serving some unrelated (especially profit-oriented) reason, that would perhaps be grounds of the lawsuit, but most of the concerns being expressed are exactly the opposite -- that the board is putting its view of the nonprofit's purpose ahead of commercial interests that people wish the firm would pursue. Which is exactly what the entire structure (and the laws governing charities) are set up to assure...
- cthalupa 3y ago
  > Sustkever et all resign, new board appointed and Sam and Greg come back. > Things could be back to business as usual by Monday morning. How in the world is losing Sutskever business as usual?
thatha7777 3y ago
This memo creates more questions and answers, and it hints at the forming of internal factions in OpenAI. Who's the COO talking on behalf of when he says "we have had multiple conversations with the board"? Who's full support does Mira (Ilya's choice) have? Why does it need saying? The rapid escalation from "we seem to disagree on this" to "walk them off the premises" was standard practice at OpenAI, along with firing people on Friday, at noon. Many people were "resigned" while they were actively discussing (or at least so they thought) any disagreements with their immediate management, or the higher echelons of OpenAI. Coordinating this internally took more than a few days, and there must have been a few middle-managers involved in several meetings to coordinate this. Details on Ilya's selection function on who to read in to this would inform a lot of his most intrinsic motivations for this. It's a pity to see brilliant minds unravel under the pressure of their own invention . . . and so publicly.
- dinobones 3y ago
  You see unraveling, I see a highly performant R&D organization being steered back on the right direction. GPT store? Give me a break.
  - Waterluvian 3y ago
    If this is true, I think it’s a mistake that they fail to publish a clear letter saying this in plain terms. The sooner the better.
    - blazespin 3y ago
      Yeah, the message from the board hinted at something very bad. Why scare people like that? If they just said philosophical differences or something that would have been sufficient.
  - thatha7777 3y ago
    Shooting from the hip with a shotgun ... is performant, but it often wounds innocent bystanders.
  - 3y ago
simonw 3y ago
Honestly at this point the theory that makes most sense to me is that OpenAI got a new internal result which was notable enough that there was a major disagreement at the board level about how to respond to it. Which feels like complete science fiction, but it comes closest to explaining why the non-profit board would move so quickly and disruptively.
- woeirua 3y ago
  I was hoping that might be the case, but it’s sounding more and more like this was just pure politics.
  - simonw 3y ago
    Policial moves are helped if there's some kind of spark to change the status quo.
- famouswaffles 3y ago
  I wholly agree with this. https://news.ycombinator.com/item?id=38314821 https://news.ycombinator.com/item?id=38314821
ivraatiems 3y ago
I think a reasonable translation of this is something like: "He didn't do anything actually illegal, or outside of the realm of what he was empowered to do as CEO, but he was doing things we didn't like," and then either didn't tell the board about those things, or told them in a way that was framed to make them less controversial. So yeah, to me, really backs up the narrative that the board and sama were in disagreement about some key things.
ianbutler 3y ago
At the risk of getting blasted, I keep seeing all these people talking about how it's great OpenAI is being steered back to a research organization. How does one expect research to make money if not being beholden to a product? Forget whatever your immediate reaction to that word is. I can already hear the "who needs another SV overhyped product" group, and your ignoring the realities that people don't pay so you can sit around thinking in industry unless your thinking can generate business value. You can not like that, but it's the system we exist in. So let me frame it another way, how does research expect to be supported if it's not providing material value? Research doesn't exist in a vacuum, if you don't want to be in industry you don't have to, we have academia for that. I'm cool with OpenAI becoming more like Google brain, but then its Microsoft calling the shots. Except wait the company structure is weird, so they're not really and after seeing how Ilya handled this I don't expect him to be able to stomach that relationship long term. I'm not bullish on OpenAI right now.
- crop_rotation 3y ago
  OpenAI exists only due to massive cash injections from MSFT (and initially from Musk). Saying that they shouldn't have done the MSFT deal is like saying they shouldn't have started the thing.
  - cco 3y ago
    Sorta yes and no. Huge capital injections became a necessity _after_ the release of ChatGPT. Pre-ChatGPT capital costs were much lower for OpenAI, the popularity of their chat bot (100 WAU apparently) created an existential crisis for capital. Before that, as a pure research organization, capital requirements were much smaller and (probably) could have chugged along without a player like MSFT, or at least a much lighter partnership.
    - crop_rotation 3y ago
      Training GPT3 required massive amount of compute, and not to mention paying top salary for top talent. Billions were injected even before chatgpt was anywhere near.
RcouF1uZ4gsC 3y ago
This may be the end of OpenAI. OpenAI’s big advantage over Google was in production using and making the research available commercially to the public. I think Sam Altman was a big part of that push for commercialization. Now there is a good chance that the “true believers” in AGI have taken over who will want to focus on just trying to achieve that. There is a good chance that true AGI is decades or more away (if ever). Without a product to push, this pure research organization will produce a lot of really cool papers(maybe) but not much else. As the talent see that there are better economic prospects elsewhere, they will leave.
- x86x87 3y ago
  I think it's a bit naive to believe you can make the jump from chatgpt to AGI. IMHO, those should have been 2 separate tracks where they milked the LLM hype as much as possible and used it to fund AGI research.
jacquesm 3y ago
This all revolves around what precisely it was that they claimed Altman wasn't candid about. As long as that isn't clear it is the board that has something to explain and in my opinion they don't have a whole lot of time and it had better be good because OpenAI will be hemorrhaging talent and brand equity until this is resolved.
seydor 3y ago
It seems openAI has ~500 employees (well, 495). This is being handled with somewhat enigmatic, ceremonial language fitting to an imperial palace with different factions. Interesting to watch, but also a bit ridiculous
11217mackem 3y ago
To what extent it Ilya the brains behind this entire wave? As in – without him – this LLM craze, as we know it and as it has manifested – would not exist today? My understanding is that he is at the center of all of it. NY Mag said that Sam Altman is the Oppenheimer, I think it's Ilya.
- crop_rotation 3y ago
  The LLM craze would certainly exist without Ilya. Google was doing LLMs much before OpenAI and had so many top tier researchers including Hinton. OpenAI didn't beat Google in pure research, only in product development. And Oppenheimer is known more for his leadership at Los Alamos and not due to his scientific theories, so a comparison to Altman is apt.
  - 11217mackem 3y ago
    GPT–2 was the first model that created long-form and coherent text. The research led to a technology with a simple use case: input / output. The "product" is a chatbot. input / output. There is no innovation in interface or product design. All the magic – all the "product innovation" is in it creating coherent text output. (OpenAI's UI is not really that great). All attempts at "product" (as in serving a specific use case tailored to a specific business or commercial workflow) that OpenAI have led to date – i.e. plugins – have been a huge flop. I am uncertain who is behind assistants interface design to make RAG so easy. It's usability is underpinned by the larger context window of GPT-4T. All of the magic is in the underlying technology. And I think Ilya's at the core of it. Yes, Attention Is All We Need is the Google paper that invented the transformer. Ilya also worked at Google and was a key part of the ecosystem, and I imagine had indirect (and most likely very direct) contributions. He is one of the most cited computer scientists of all time. Without Ilya, I don't think we'd have the hype right now. Someone would have come to the same conclusion, I'm sure.
crop_rotation 3y ago
This looks extremely stupid from the board and validates the theory that most of the board has no clue on large organisation governance, full of people who have mostly not seen boardrooms in action. It will be very very hard for OpenAI to raise money with the presence of such a maverick board, and I doubt MSFT would want to give a penny more to them without some big changes. For the people saying they don't owe anything to MSFT, MSFT is the 49% stock holder in the LLC, and a 49% stockholder almost never gets treated like this anywhere else, doesn't matter if the remaining 51% is held by a non profit or not. For people saying they shouldn't have done the MSFT deals, how else would they have gotten the money to build anything at all considering how much GPUs cost? Their competitor Anthropic is doing the same raising money from all of big tech, made possibly only due to the ridiculous success of ChatGPT. For others saying Ilya is the key, Google had a big lead on AI researchers and the only reason Google is not the undisputed king is due to bad leadership and product development.
- swalkergibson 3y ago
  I would venture to say that it is a near certainty that those researchers who left Google originally to work for OpenAI are going to be wanting to head right back there.
ilaksh 3y ago
I think we need Sutskever to do a speech now to tell us what _his_ vision is exactly and what is going to happen to the GPT Store especially. Possibly followed by Murati, but also maybe her comments won't be that relevant if Sutskever is really as into shutting down product development as it seems.
kaycebasques 3y ago
No matter how exactly this all shakes out, I am convinced that quote from Sutskever is going to be a legendary summary of the saga: > Ego is the enemy of growth https://twitter.com/ilyasut/status/1707752576077176907 https://twitter.com/ilyasut/status/1707752576077176907 The real mystery that we're all trying to solve in realtime is: who was the biggest ego here? Like a good game of Clue, everyone is still a suspect...
- neontomo 3y ago
  https://twitter.com/sama/status/1537831987146158080?lang=en https://twitter.com/sama/status/1537831987146158080?lang=en Sam's own related tweet: "curiosity powers progress, but ego often does the heavy lifting during the slogs" My take is that while Sam's statement is not a popular thing to say or admit, it's more honest than Ilya's tweet, which sounds more like a grandiose ego trying to pretend it has no ego. I know which I prefer.
drstrangevibes 3y ago
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LASR 3y ago
No malfeasance? Guess who would now be interested in backing Altman and his crew in whatever he chooses to do. Trillion $ companies are not forces you should be meddling with.
darig 3y ago
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megous 3y ago
All this SV celebrity gossip is so annoying.
- cmcaleer 3y ago
  The sudden and mysterious ousting of a popular CEO at 4pm on a Friday (!) from what is the most talked about company currently is a very interesting story. Can’t understand this position.
  - megous 3y ago
    Yes, and talking about it is a definition of gossip. Meh.

189 points by Amorymeltzer 3y ago

I think this will ultimately be good for everyone, however I can imagine there’s a huge populace of OpenAI employees hoping this was a get rich quick route and are rethinking that. I know OpenAI has a different structure for reward than typical equity, but there had to be the thought this was going to be bigger than Apple and Google combined and there would be legions of billionaires in the making. If I were one of them, I would be seriously thinking about how to value my future at OpenAI.

almost_usual 3y ago
Brought this up in another thread and was downvoted. But yes the 900k compensation package was probably more than 600k PPU equity which is worth who knows what now. https://www.levels.fyi/blog/openai-compensation.html https://www.levels.fyi/blog/openai-compensation.html Only a few days ago there was a post here about them poaching researchers with “10M” equity compensation packages.. https://news.ycombinator.com/item?id=38258406 https://news.ycombinator.com/item?id=38258406
- lumost 3y ago
  This could yield a lawsuit at some point if those PPUs are worthless due to the board refusing to allow profits…
  - almost_usual 3y ago
    Right, PPUs are worthless until profitability but the board doesn’t want to be profitable?
    - lumost 3y ago
      I don’t believe offering PPUs as compensation when you intend never to be profitable is entirely legal
      - dragonwriter 3y ago
        For a salaried position where the base salary is above the legal minimum salary for wage & hour exemption, I don't see what the legal problem would be.
        junofan 3y ago
        Tortious interference? It’s pretty textbook right?
        dragonwriter 3y ago
        > Tortious interference? How? > It’s pretty textbook right? No? Offering a compensation package can't be tortious interference, tortious interference requires an existing contract, and action by a third party that (along with a whole bunch of other conditions) causes a breach of that contract.
        junofan 3y ago
        Well, you have to specify a jurisdiction. Let’s go with California since that’s where a lot of OpenAI’s employees are. Here’s what you need: 1. an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff; 2. the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; 3. the defendant was negligent; 4. and such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship It’s pretty open and shut, no?
  - dragonwriter 3y ago
    > This could yield a lawsuit at some point if those PPUs are worthless due to the board refusing to allow profits… A lawsuit based on what? The OpenAI Global LLC operating agreement has a prominent notice... https://images.openai.com/blob/142770fb-3df2-45d9-9ee3-7aa069acada1/image1.png https://images.openai.com/blob/142770fb-3df2-45d9-9ee3-7aa06... from https://openai.com/our-structure https://openai.com/our-structure
    - almost_usual 3y ago
      OpenAI recruits employees based on equity packages that will not amount to anything based on their operating agreement. Live and learn I guess.
shinryuu 3y ago
I'm sure they are pretty well paid either way. It's not like they would easily be able to go to another company and get better paid?
rbera 3y ago
Good. Considering they’re already getting millions in comp, I’d rather have people working on AGI that aren’t in it solely for the money. And it’s not like Cohere or Sam’s next company won’t be trying to poach researchers anyway, but at least one company (OpenAI) isn’t going for profit for sure now.
realce 3y ago
I hear Cyberdyne is hiring if that's your attitude about creating AGI.
zeven7 3y ago
And now Sam is free to start another company which is incentivized by profit, giving him the ability to easily gobble up the part of the talent at OpenAI that was hoping for that.
- cmcaleer 3y ago
  Or he gets to return to OpenAI and have a Steve Jobs style cull of the board. Either way as someone who enjoys the drama I’m stoked.
- p_j_w 3y ago
  Why do so many people buy into this belief that Sam Altman was the special sauce in OpenAI?
  - cmcaleer 3y ago
    Is there a compelling narrative to think that he wasn’t useful?
    - fnordpiglet 3y ago
      His title: CEO
  - zeven7 3y ago
    He’s not the only one. But at least 4 top people have already left because of him leaving. He can clearly take people with him. That’s the comment you’re responding to. His power isn’t him alone. It’s everyone he brings with him.
- deleted 3y ago
  [deleted]
ChildOfChaos 3y ago
Really? I'd be way more inclined to be pessimistic about it. OpenAI is massively ahead of anyone else in the AI space, anything that shows problems in the organisation seems like it could set us back massively in the development of AI. Several key people at OpenAI have also resigned, including Greg Brockman who was removed from the board but told he was too important so would remain in his other roles, he also tweeted not to worry bigger things are coming. If Sam breaks away and does something else in this space, I can see others joining him and although competition is deathly, I feel like it is just going to fracture our AI developments, everyone is trying to catch up with OpenAI, any new company would be starting from scratch and be years away from anything useful while also leaving OpenAI a shell of it's former self. Hopefully not the start of bigger issues at openAI.
- fnordpiglet 3y ago
  A flip side, AI development fragmentation will mean many more techniques are tried and know how diffuses into a much broader market. This has the likelihood of greatly accelerating everything. Further, by lopping off the top of OpenAI you create space for new people to grow and learn and lead. In the very short term it’s disruptive. In the medium and long term it’s probably a wonderful thing to soften the ground a bit and let competition take hold.

TillE 3y ago

This seems to align with the stuff Kara Swisher was hearing, and suggests Sam was "not consistently candid" about product announcements or something similar.

waihtis 3y ago

They can spin it how they want, but it'll 100% turn out to be a AI doomerist panic reaction. They didn't even inform MSFT about it which is absolutely ridiculous

nvm0n2 3y ago
Yeah it seems like not entirely candid may turn out to be something like "he said he was a super-doomer and pinky swore it to us, but then we realized he wasn't doomer enough for us". If it's not malfeasance about finance, business, safety or security practices and is merely a "breakdown in communications" then that rules out virtually everything that could justify such an abrupt firing. Sounds like there's no legal problems to worry about, leaving an incompetent board as the only obvious possibility left. When I was younger I remember thinking non-profit orgs were awesome and hoping to work in that space one day. This + the Wikimedia Foundation funding scandal + the proliferation of "misinformation" NGOs has really turned me off the whole concept. Nonprofits seem to have more than their fair share of problematic governance. There's something about commercial trade that grounds people.
- anonymouskimmer 3y ago
  > There's something about commercial trade that grounds people. It's called shareholder lawsuits. I really do wonder about boards of non-public companies, though. I'd expect them to be, on balance, not much different from NGO boards or even HOA boards.
basisword 3y ago
In retrospect, it wasn't the brightest move for Microsoft to be baking this in to their OS, Office suite, search engine, etc. Having a core feature of your core products depend on a startup with a bizarre profit/non-profit structure is idiotic. Amazing they haven't been building this tech themselves - maybe that's their next move. Poach as many of the OpenAI staff as they can and build in-house.
- ilikehurdles 3y ago

intellectronica 3y ago

Serious wrongdoing with smoking gun would have been the only justification for the board acting the way they did. This reflects very poorly on the OpenAI board. And makes it more likely that this affair is far for complete.

fulladder 3y ago
Agree completely. Badmouthing someone as you fire them is immature, and would only be warranted in some kinds of very extreme circumstances, which this does not appear to be. I predict that this is the beginning of the end for OpenAI. The company won't collapse overnight or anything, but its best people will start leaving in January, then its average people will leave over the course of 2024, and there will be little left by 2025. They may have enough money to live on as a zombie company for several years after that, but everyone will know that it is no longer what it once was or could have been.
- intellectronica 3y ago
  That sounds very plausible. Another option is that as more information like this becomes public pressure will mount next week to restructure the board and the organisation and try to repair things.
  - intellectronica 3y ago
    Turns out we didn't have to wait for next week - that's what is already happening this weekend.
ansk 3y ago
One conceivable situation in which the board's behavior could be justified is if Ilya presented them with an urgent ultimatum: either Sam goes or I go. If the rift between Sam and Ilya was growing to the point that Ilya would rather leave the company than continue with Sam, it's a rational move for him to propose this. At this point the remainder of the board would be forced to make a decision as to whether Sam or Ilya is more vital to advancing OpenAI's mission. Choosing Ilya over Sam would certainly be a justifiable decision in such a scenario.

leroy_masochist 3y ago

I can't find the exact quote, but I distinctly remember Sam giving founders advice along the lines of, "operate under the assumption that co-founders and investors are not going to screw you". Pretty sure it was a Startup School lecture at some point. That still may be good life advice in general (even if it wasn't for Sam in this case) but what I really don't get is the fact that OpenAI's board governance was structured in a way such that this was even possible. I also don't understand what is to be gained from the perspective of the remaining senior leaders at the company. This is a tremendously momentum-killing event. I cannot think of a single facet of their day-to-day operations, product roadmap, competitive position, etc. that would be improved by this decision. Yesterday, when this was announced, I was bracing myself for some truly awful news about something that Sam had done in his personal life that was about to be divulged, since that is the only possible rational reason for the board to make the decision it did. What am I missing? It's all so strange.

psadri 3y ago
Ultimately one important job of the board is to be able to replace the CEO. So it would be odd if it was structured in a way that this wasn’t possible.
- leroy_masochist 3y ago
  > Ultimately one important job of the board is to be able to replace the CEO. This is true in the abstract but it is not common to see the narrowest possible majority on a six-person board oust the co-founder/CEO (also a board member) while excluding the board chair (who was also the company's President and co-founder) from the process. > So it would be odd if it was structured in a way that this wasn’t possible. You are wrong here. Boards are usually structured so that what just happened at OpenAI is not possible. The exclusion of the board chair from the process is especially egregious and the involvement of board chairs in decisions of this magnitude is often mandated in documents of incorporation. Matt Levine is going to have a field day with this, LOL.
  - psadri 3y ago

hn_throwaway_99 3y ago

Wow, I'm pretty shocked how this all went down. Given the abrupt nature of the announcement and the pointed message in it (essentially accusing Altman of lying), I was sure there must have been some big scandal, not just normal boardroom differences of opinion and game-of-thrones-style maneuvering. Even if I agree with Sutskever's general position, I think his actions here were colossally stupid. He's basically managed to piss off a ton of people, and I have no doubt lots of employees will just shift to whatever Altman and Brockman end up doing, or else there will otherwise be some huge splintering of OpenAI talent.

lumost 3y ago
Also raises deep concerns on governance structure. That the board took this action without consultation with key investors is madness. That they wrote up something which made it sound like a disaster internally further eroded trust that they actually know what they are doing. I’d expect a tough challenge ahead as msft/other stakeholders try to put guardrails in while dealing with the fact that whoever’s bright idea this coup was - is now in charge. What a mess.
- CPLX 3y ago
  Non profits don’t have investors.
- mmcwilliams 3y ago
  In a non-profit the role of a board is oversight, not appeasement of "investors" or stakeholders/donors. Why would going to them be required to determine if an executive had lied to the board?
  - mlyle 3y ago
    In any board, the board's role is not strictly oversight but also working to preserve the health of the organization and to meet meet organizational goals. Pissing off all your stakeholders with a snap decision isn't great governance. Particularly egregious circumstances might make it necessary. Finding something wrong might require action, but a board's responsibility is also to make the corrective action in a responsible manner that is in the organization's interests.

basisword 3y ago

Either the board is now lying to the employees, or the board monumentally fucked up with their communication publicly (vaguely indicating some serious wrongdoing in their statement yesterday). Either way, the board look like morons. Concerning they're now in charge of some pretty powerful and important tech.

solarkraft 3y ago
I agree that this looks ... weird and uncool. But on a cursory look it seems to me like the boards' intentions are the right ones, while Sam seemed intent on making the most money possible with no regard for any of the Org's founding principles. It's why the "Open" in the name had become a joke. I had no hope that OpenAI would ever deliver on its original mission, because when has a commercial takeover ever been reversed? This may or may not kill OpenAI's lead, but maybe at least it will bring back openness ...
- laurels-marts 3y ago
  and what will you do with all that openness? i personally hoped that openai would continue to innovate and ship at insane speeds, continue to cut costs so i can continue to use their apis. providing the best ai for the lowest possible price is how they would have made me and the rest of the world better and more prosperous. now we'll have to wait and see what they actually deliver.
rbancroft 3y ago
I'm not a lawyer but their original announcement seemed very close to libel and I would think Sam has some legal options should he choose to pursue them.
fudged71 3y ago
I think the fact that their largest partner and shareholder, Microsoft, wasn’t made aware of this earlier, or even given the chance of having this news drop after trading hours, shows the incompetence.

eastbound 3y ago

If it happens to only be miscommunication, that will be the biggest blunder of economic history caused by misunderstandings. If true, Sam would have kept his job just by communicating more and better. If true, the board wouldn’t have a lose CEO in the wild and talents now possibly trying to build a competitor…

martythemaniak 3y ago

I'm curious what recourse Microsoft has, if any. Presumably there's some clause protecting them against openAI self-immolating? Interestingly, the situation is fully reversible for now: 1. Majority of employees sign a strong letter condemning the board and calling for their resignation. 2. MSFT threatening to activate whatever protective clause they have 3. Other investors/donors threatening lawsuits. 4. Sustkever et all resign, new board appointed and Sam and Greg come back. Things could be back to business as usual by Monday morning.

dragonwriter 3y ago
> I'm curious what recourse Microsoft has, if any. Presumably there's some clause protecting them against openAI self-immolating? Given the disclaimer attached to the OpenAI Global LLC (the entity Microsoft is directly invested in) operating agreement that is also reposted on OpenAI's own description of its structure about how investment in the firm should be treated as a donation, and that the firm has no obligation to seek profit, and its primary goal is to serve the charitable mission of the nonprofit and that that will trump all other concerns including profit, I doubt very much that that is the case. Now, if there was actual evidence that the board (which is, remember, the board of the nonprofit) was not making a bona fide effort to serve its understanding of the charitable purpose of the nonprofit, but instead serving some unrelated (especially profit-oriented) reason, that would perhaps be grounds of the lawsuit, but most of the concerns being expressed are exactly the opposite -- that the board is putting its view of the nonprofit's purpose ahead of commercial interests that people wish the firm would pursue. Which is exactly what the entire structure (and the laws governing charities) are set up to assure...
cthalupa 3y ago
> Sustkever et all resign, new board appointed and Sam and Greg come back. > Things could be back to business as usual by Monday morning. How in the world is losing Sutskever business as usual?

thatha7777 3y ago

This memo creates more questions and answers, and it hints at the forming of internal factions in OpenAI. Who's the COO talking on behalf of when he says "we have had multiple conversations with the board"? Who's full support does Mira (Ilya's choice) have? Why does it need saying? The rapid escalation from "we seem to disagree on this" to "walk them off the premises" was standard practice at OpenAI, along with firing people on Friday, at noon. Many people were "resigned" while they were actively discussing (or at least so they thought) any disagreements with their immediate management, or the higher echelons of OpenAI. Coordinating this internally took more than a few days, and there must have been a few middle-managers involved in several meetings to coordinate this. Details on Ilya's selection function on who to read in to this would inform a lot of his most intrinsic motivations for this. It's a pity to see brilliant minds unravel under the pressure of their own invention . . . and so publicly.

dinobones 3y ago
You see unraveling, I see a highly performant R&D organization being steered back on the right direction. GPT store? Give me a break.
- Waterluvian 3y ago
  If this is true, I think it’s a mistake that they fail to publish a clear letter saying this in plain terms. The sooner the better.
  - blazespin 3y ago
    Yeah, the message from the board hinted at something very bad. Why scare people like that? If they just said philosophical differences or something that would have been sufficient.
- thatha7777 3y ago
  Shooting from the hip with a shotgun ... is performant, but it often wounds innocent bystanders.
- 3y ago

simonw 3y ago

Honestly at this point the theory that makes most sense to me is that OpenAI got a new internal result which was notable enough that there was a major disagreement at the board level about how to respond to it. Which feels like complete science fiction, but it comes closest to explaining why the non-profit board would move so quickly and disruptively.

woeirua 3y ago
I was hoping that might be the case, but it’s sounding more and more like this was just pure politics.
- simonw 3y ago
  Policial moves are helped if there's some kind of spark to change the status quo.
famouswaffles 3y ago
I wholly agree with this. https://news.ycombinator.com/item?id=38314821 https://news.ycombinator.com/item?id=38314821

ivraatiems 3y ago

I think a reasonable translation of this is something like: "He didn't do anything actually illegal, or outside of the realm of what he was empowered to do as CEO, but he was doing things we didn't like," and then either didn't tell the board about those things, or told them in a way that was framed to make them less controversial. So yeah, to me, really backs up the narrative that the board and sama were in disagreement about some key things.

ianbutler 3y ago

At the risk of getting blasted, I keep seeing all these people talking about how it's great OpenAI is being steered back to a research organization. How does one expect research to make money if not being beholden to a product? Forget whatever your immediate reaction to that word is. I can already hear the "who needs another SV overhyped product" group, and your ignoring the realities that people don't pay so you can sit around thinking in industry unless your thinking can generate business value. You can not like that, but it's the system we exist in. So let me frame it another way, how does research expect to be supported if it's not providing material value? Research doesn't exist in a vacuum, if you don't want to be in industry you don't have to, we have academia for that. I'm cool with OpenAI becoming more like Google brain, but then its Microsoft calling the shots. Except wait the company structure is weird, so they're not really and after seeing how Ilya handled this I don't expect him to be able to stomach that relationship long term. I'm not bullish on OpenAI right now.

crop_rotation 3y ago
OpenAI exists only due to massive cash injections from MSFT (and initially from Musk). Saying that they shouldn't have done the MSFT deal is like saying they shouldn't have started the thing.
- cco 3y ago
  Sorta yes and no. Huge capital injections became a necessity _after_ the release of ChatGPT. Pre-ChatGPT capital costs were much lower for OpenAI, the popularity of their chat bot (100 WAU apparently) created an existential crisis for capital. Before that, as a pure research organization, capital requirements were much smaller and (probably) could have chugged along without a player like MSFT, or at least a much lighter partnership.
  - crop_rotation 3y ago
    Training GPT3 required massive amount of compute, and not to mention paying top salary for top talent. Billions were injected even before chatgpt was anywhere near.

RcouF1uZ4gsC 3y ago

This may be the end of OpenAI. OpenAI’s big advantage over Google was in production using and making the research available commercially to the public. I think Sam Altman was a big part of that push for commercialization. Now there is a good chance that the “true believers” in AGI have taken over who will want to focus on just trying to achieve that. There is a good chance that true AGI is decades or more away (if ever). Without a product to push, this pure research organization will produce a lot of really cool papers(maybe) but not much else. As the talent see that there are better economic prospects elsewhere, they will leave.

x86x87 3y ago
I think it's a bit naive to believe you can make the jump from chatgpt to AGI. IMHO, those should have been 2 separate tracks where they milked the LLM hype as much as possible and used it to fund AGI research.

jacquesm 3y ago

This all revolves around what precisely it was that they claimed Altman wasn't candid about. As long as that isn't clear it is the board that has something to explain and in my opinion they don't have a whole lot of time and it had better be good because OpenAI will be hemorrhaging talent and brand equity until this is resolved.

seydor 3y ago

It seems openAI has ~500 employees (well, 495). This is being handled with somewhat enigmatic, ceremonial language fitting to an imperial palace with different factions. Interesting to watch, but also a bit ridiculous

11217mackem 3y ago

To what extent it Ilya the brains behind this entire wave? As in – without him – this LLM craze, as we know it and as it has manifested – would not exist today? My understanding is that he is at the center of all of it. NY Mag said that Sam Altman is the Oppenheimer, I think it's Ilya.

crop_rotation 3y ago
The LLM craze would certainly exist without Ilya. Google was doing LLMs much before OpenAI and had so many top tier researchers including Hinton. OpenAI didn't beat Google in pure research, only in product development. And Oppenheimer is known more for his leadership at Los Alamos and not due to his scientific theories, so a comparison to Altman is apt.
- 11217mackem 3y ago
  GPT–2 was the first model that created long-form and coherent text. The research led to a technology with a simple use case: input / output. The "product" is a chatbot. input / output. There is no innovation in interface or product design. All the magic – all the "product innovation" is in it creating coherent text output. (OpenAI's UI is not really that great). All attempts at "product" (as in serving a specific use case tailored to a specific business or commercial workflow) that OpenAI have led to date – i.e. plugins – have been a huge flop. I am uncertain who is behind assistants interface design to make RAG so easy. It's usability is underpinned by the larger context window of GPT-4T. All of the magic is in the underlying technology. And I think Ilya's at the core of it. Yes, Attention Is All We Need is the Google paper that invented the transformer. Ilya also worked at Google and was a key part of the ecosystem, and I imagine had indirect (and most likely very direct) contributions. He is one of the most cited computer scientists of all time. Without Ilya, I don't think we'd have the hype right now. Someone would have come to the same conclusion, I'm sure.

crop_rotation 3y ago

This looks extremely stupid from the board and validates the theory that most of the board has no clue on large organisation governance, full of people who have mostly not seen boardrooms in action. It will be very very hard for OpenAI to raise money with the presence of such a maverick board, and I doubt MSFT would want to give a penny more to them without some big changes. For the people saying they don't owe anything to MSFT, MSFT is the 49% stock holder in the LLC, and a 49% stockholder almost never gets treated like this anywhere else, doesn't matter if the remaining 51% is held by a non profit or not. For people saying they shouldn't have done the MSFT deals, how else would they have gotten the money to build anything at all considering how much GPUs cost? Their competitor Anthropic is doing the same raising money from all of big tech, made possibly only due to the ridiculous success of ChatGPT. For others saying Ilya is the key, Google had a big lead on AI researchers and the only reason Google is not the undisputed king is due to bad leadership and product development.

swalkergibson 3y ago
I would venture to say that it is a near certainty that those researchers who left Google originally to work for OpenAI are going to be wanting to head right back there.

ilaksh 3y ago

I think we need Sutskever to do a speech now to tell us what _his_ vision is exactly and what is going to happen to the GPT Store especially. Possibly followed by Murati, but also maybe her comments won't be that relevant if Sutskever is really as into shutting down product development as it seems.

kaycebasques 3y ago

No matter how exactly this all shakes out, I am convinced that quote from Sutskever is going to be a legendary summary of the saga: > Ego is the enemy of growth https://twitter.com/ilyasut/status/1707752576077176907 https://twitter.com/ilyasut/status/1707752576077176907 The real mystery that we're all trying to solve in realtime is: who was the biggest ego here? Like a good game of Clue, everyone is still a suspect...

neontomo 3y ago
https://twitter.com/sama/status/1537831987146158080?lang=en https://twitter.com/sama/status/1537831987146158080?lang=en Sam's own related tweet: "curiosity powers progress, but ego often does the heavy lifting during the slogs" My take is that while Sam's statement is not a popular thing to say or admit, it's more honest than Ilya's tweet, which sounds more like a grandiose ego trying to pretend it has no ego. I know which I prefer.

drstrangevibes 3y ago

[dead]

LASR 3y ago

No malfeasance? Guess who would now be interested in backing Altman and his crew in whatever he chooses to do. Trillion $ companies are not forces you should be meddling with.

darig 3y ago

[dead]

megous 3y ago

All this SV celebrity gossip is so annoying.

cmcaleer 3y ago
The sudden and mysterious ousting of a popular CEO at 4pm on a Friday (!) from what is the most talked about company currently is a very interesting story. Can’t understand this position.
- megous 3y ago
  Yes, and talking about it is a definition of gossip. Meh.