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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)

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.
    - Hadriel 3y ago
      Yes but they also Determine the organization's interests
      - dathinab 3y ago
        more likely I think they found that not letting him go isn't and option due to a breakdown of communication (a formulation which normally implies a fundamental break down of trust) but the trust of the board completely braking down doesn't mean that e.g. MS doesn't trust or want him anymore as in the end the interest the board have to defend and the ones which stake holder like MS have might be in conflict so even if it has negative consequences if it must be done it might be easier to get it done fast and then resolve the mess instead of giving other a chance to turn it into an even bigger mess
    - mike_d 3y ago
      > a board's responsibility is also to make the corrective action in a responsible manner that is in the organization's interests. That very well may have happened here. It is important to consider that this is effectively an HR matter and that the results of employee investigations cannot be made public.
    - mmcwilliams 3y ago
      There's a lot of speculation about this whole fiasco but strictly speaking the board would risk being in breach of fiduciary--as stewards of a charity--if they believed that an executive had misled them about the use of assets. It may piss off their donors because of a personal preference for the executive in question but it would be their responsibility to act accordingly.
      - mlyle 3y ago
        Yes... but my point is that this doesn't preclude them taking a couple of days to figure it out, let stakeholders know, avoid making a particularly dumb public statement, changing their mind because everyone is going to quit, etc. Here, there's been a statement that there's no malfeasance, too.
  - blazespin 3y ago
    Yeah, the seed of this disaster was probably planted a long time ago, like when they created the hybrid, when they got money from MSFT. Maybe Ilya doesn't want to be at the forefront of AI building I guess. He probably thinks he can lead it better by not being at the table. Or who knows.
    - dathinab 3y ago
      the hybrid structure was intentional (and known by MS etc.) created to be able to do things like rain in (or fire) a CEO which is more representing the interests of the other minority stake holders then the interests of the non-profit. So depending on the exact non-public reasons for the communication breaking down it might not be a disaster but the hybrid doing exactly what it was intended to do. Now the real interesting question is how much MS must have been afraid to be technologically left behind to knowingly enter such a deal with such a huge investment?
  - deeviant 3y ago
    The problem here is: Who watches the watchers? To my eyes, and to many others, it appears the board is power-tripping. Also, OpenAI's unique structure means they have no checks on the board that an investor class would normally give. It's difficult to envision a thriving future for OpenAI under these circumstances or a world in which they are a significant factor in AI policy. Their early market lead, still a considerable advantage, will not be sufficient to weather the storm brewed by the board's own actions. Losing their market leverage would mean ceding the influential role in shaping AI's future, potentially leaving the giants such as Microsoft, Google, Amazon, and others assuming control and steering the future course of AI, but without the creed to make AI "good."
    - jaybrendansmith 3y ago
      Put another way, as seen on X: "The AI industry would like to thank the board of OpenAI for giving all of us a chance to catch up"
    - mmcwilliams 3y ago
      In a legal sense the people who watch the board members of charities are the IRS and the state regulators in the jurisdiction it's established.
- jldugger 3y ago
  > That the board took this action without consultation with key investors is madness. It's a non-profit board, yea?
  - layer8 3y ago
    They created the for-profit subsidiary for the express purpose of raising more investments.
    - potatopatch 3y ago
      But the CEO that was done under was not sufficiently candid with the board.. I think they realized they have some risk being only a technicality that does whatever the CEO and Microsoft tell them is aligned with their mission.
    - bmitc 3y ago
      The they in this sentence refers to the CEO the board just fired and not the board.
- bink 3y ago
  > That the board took this action without consultation with key investors is madness. Are you expecting them to reach out to Microsoft and ask "we're thinking of firing our CEO. How does that grab you?" I don't think this is the type of thing you can really do by consulting outside groups.
  - jacquesm 3y ago
    OpenAI is privately held so there would be no reason for the board to announce this publicly before consulting with / informing the shareholders. Short of an impending media crisis that they needed to get ahead of this was mishandled. That doesn't mean it was mishandled, just that I don't see any evidence just yet of a valid reason to do this, they've done absolutely enormous damage to the OpenAI brand by doing this in this hamfisted way, you'd hope they at least had a good reason. Note that the non-profit doesn't have shareholders, but the effect is much the same because the two are linked closely together and you can't affect the non-profit in such a drastic way without also affecting the for-profit arm. So they just pointed the double barrelled shotgun at their feet and pulled the trigger, twice. It will take a massive effort to restore trust in the brand, both on the commercial side and on the side of the people working there.
    - bink 3y ago
      I don't disagree that this may have been ham-fisted or that it may have been a huge mistake. But I do think that talking to investors in the for-profit arm of the company about potentially removing the figure head has an even greater potential to backfire. There's absolutely zero chance that information wouldn't leak before they could make their move. And while it might be a nice gesture to Microsoft to inform them of their decision, the truth is that Microsoft has no stake in the non-profit OpenAI and did not have any right to know of these decisions as they were being made.
      - jacquesm 3y ago
        Yes, agreed this is also perilous. But in my opinion absent a very clear and very public reason doing it this way was a huge mistake.
- woeirua 3y ago
  I don’t see a world where MSFT invests more money into OpenAI with the current governance structure after this. The fact that MSFT didn’t have a board seat was unusual before this. Now it just makes MSFT look like fools.
  - cedws 3y ago
    Hopefully MSFT just goes off and does their own thing. I find this holier-than-thou "we're non profit and we're going to save the world how we see fit" irritating. Talking about AGI like it's an animal ready to pounce when we're quite obviously nowhere near it. Machine learning development has been sluggish for the longest time and the moment it was commercialised, there was an explosion in possibilities and development. "AI safety" is a euphemism for "aligns with our interests." "Roko's basilisk" is nonsense science fiction babble.
    - SpicyLemonZest 3y ago
      Don't these events prove pretty conclusively that AI safety is not a euphemism for "aligns with our interests"? There's no way anyone at OpenAI could have expected to benefit professionally or financially from this.
      - cedws 3y ago
        It can also mean "does/doesn't do things as we see fit." They want to build a model without bias, but they've elected themselves as moderators.
        SpicyLemonZest 3y ago
        This isn't about bias. Sutskever has recently been dedicated to what OpenAI calls "superalignment" (https://openai.com/blog/introducing-superalignment https://openai.com/blog/introducing-superalignment), the problem of future AI systems which don't do what humans want at all because they're too smart. You can dispute that research or its premises, but after it inspires a board coup at a billion dollar company, I don't think you can reasonably dispute that people believe it.
- himaraya 3y ago
  The board of the non-profit doesn't answer to Microsoft etc. The investors own stakes in the for-profit subsidiary.
  - kelnos 3y ago
    MS may not have any legal sway over the non-profit, but I wouldn't be surprised that in most cases they'd at least be consulted or given a heads-up on something like this, since it affects the for-profit bits of the org as well.
    - himaraya 3y ago
      OpenAI's corporate structure doesn't fall under "most cases"—I assume the board wanted to demonstrate independence from investors.
      - deleted 3y ago
        [deleted]
      - swalkergibson 3y ago
        And now I expect that we see this "board" dissolved. Frankly, as it should. If you are going to take $10B from another organization and you nuke the CEO during market hours and then later it turns out that it was just an ordinary disagreement, then you should answer for that action. On a Friday, no less. This is actually the kind of thing that can sink MSFT's apparent "first mover" advantage in the eyes of big money. OpenAI is now fractured, and whatever work they were going to be doing on tech is now going to be devoted to figuring out WTF to do with this mess the board just created all by themselves for no apparent reason.
        davorak 3y ago
        > And now I expect that we see this "board" dissolved. The board has the power to dissolve itself, I am sure there(edit typo) are legal mechanisms for illegal acts, I think the IRS can revoke 501(c)(3) status but not dissolve, not sure if there are other mechanisms.
- karmasimida 3y ago
  Yup. OpenAI might just show the world how the naive ideal we are not driven by profit but spending billions every year is never a good idea. Those board has no stake in the company, on the other side means their have no accountability either. It is like they remote controlling the titanic, and who cares it crashes, because they are not on it. Regardless, they made very stupid decisions now sabotaging interests and the company itself, brutally beheaded itself.
  - CPLX 3y ago
    > they made very stupid decisions now sabotaging interests and the company itself, brutally beheaded itself By firing the guy who founded Loopt? I’m genuinely mystified, where does this theory come from. What makes this guy essential?
    - karmasimida 3y ago
      > What makes this guy essential He elected himself to be the face of OpenAI That is why he is now essential. He is the hinge of trust, and people believed his vision of OpenAI, as a company. Ilya might be the science guy, but he 0 track record to run a company. And now he executes this badly planned coup, how would people trust him not to play such shticks in the future?
      - CPLX 3y ago
        It’s not a company it’s a non profit organization.
        karmasimida 3y ago
        The world perceive the way how it wanted to and in this case legitimately so Arguing about semantics is useless
        CPLX 3y ago
        The world, or the HN comments section?
- dathinab 3y ago
  Honestly given all what I have heard about Sam Altman I wouldn't be surprised (i.e. speculative) if he did systematically manipulate and deceived the board (but subtle enough to not be legally "lying" or fraud) with the intention to forth through his goals no matter weather they agree or not. Assuming such situation happens in is noticed there is no reason to consult because it wouldn't change anything and just make things more complicated as the only action which can be taken is to fire the manipulator in power asap. Especially some recent actions where not so much in line with the mission the board is supposed to protect push for but very much in line with giving especially Microsoft a additional competitive advantage (i.e. additional to what Microsoft payed for). And I have seen many comments like but MS and other stake holder should have been part of the decisions and similar. But here is the think, with the specific structure of OpenAI MS and other knew from the get to go that it's a high risk investment where even through they in vest a ton of money they won't have _anything_ to say at all when it comes to decision done by the outer non-profit which is implicitly the majority owner of the for-profit OpenAI.
- bmitc 3y ago
  > Also raises deep concerns on governance structure. It's so strange to hear this regarding a CEO, a single person, effectively going rogue against a company's charter, but then layoffs of tens, hundreds, and thousands of workers, on the basis of zero fault of their own, by these CEOs and boards are considered good governance.
  - btbuildem 3y ago
    Companies are by and large communist dictatorships - usually there is a Great Leader (CEO), at best there's the Central Committee (board of directors). Effectively, nobody else decides the direction of the company, or makes any impactful decisions. The rank-and-file serfs don't matter, they're expendable and interchangeable. When Dear Leadership is shaken up, it's newsworthy. When ten thousand labourers are let go, it's just a statistic.
    - junofan 3y ago
      I have to downvote. I don’t think this kind of agitprop belongs on this site.
      - PhasmaFelis 3y ago
        Do you feel the comparison is unfair to corporations, or to communism?
        junofan 3y ago
        Neither. Unnecessarily politically combative language doesn’t contribute to the discussion here.
        asmithmd1 3y ago
        Tell me you have never worked in a publicly traded without saying it. This is EXACTLY what late stage "political" companies are like. There is no rational way to decide who gets the window office vs. the internal office. Everything is "political"
- swalkergibson 3y ago
  MSFT dropped over 1% in two minutes, and Monday is almost certainly going to feature more selling. If I am Vanguard, I am on the phone right now with Satya telling him to get control of this shitshow of a BOD before it nukes my positions.
  - _lvbh 3y ago
    Why should Ilya care about Vanguard’s positions? The board he sits on is the non-profit one.
    - swalkergibson 3y ago
      Nothing happens in a vacuum. Professional boards of directors are supposed to be attentive to the risks to the organization as a whole, regardless of whatever weird ass governance structure exists. Blowing out your CEO on a Friday afternoon and then accusing him of lying is not the way to do this, and they are likely to find out why come Monday morning at about 9:30AM Eastern.
    - takinola 3y ago
      That's not how this works. OpenAI took investments for a reason. They benefit from the MSFT relationship. Harming that relationship will be bad for them (maybe not catastrophically bad, but significantly bad). I would be surprised if the relationship is not strained after this event since they have almost certainly created a major headache for MSFT (Satya is almost certainly fielding questions from his own board about this).
      - adastra22 3y ago
        I’m pretty sure it’s catastrophically bad. OpenAI’s deal with Microsoft happened when ChatGPT took off at insane rates and OpenAI experienced scaling troubles. There was literally no one except a handful of cloud operators—Google, Amazon, Microsoft, etc. who could provide enough GPUs to keep things running. Microsoft basically stepped in and said “we’ll provide the GPUs and pay the hosting bill for half the profits.” OpenAI now runs everything, from ChatGPT inference to GitHub copilot to GPT-5 training on Azure GPU instances. If Satya is as pissed as it sounds like he is, and if Ilya et al double down on their madness, Microsoft could back out and shut that all off tomorrow. OpenAI would be dead in the water, with no running product and no path to recovery.
- andkenneth 3y ago
  It's non-standard but I'd argue that the weird structure was designed to enable this exact type of decision to be made by the board. The non-profit board is a peer of investors like microsoft, not answerable to them like a normal company.
- no_wizard 3y ago
  Maybe those key investors aren’t as meaningful as they thought. It’s not per se something investors need to know about. This needs to shake out. Sam Altman was clearly not the best fit anymore. Thats the moral of the story. Why are executives special? They aren’t. It’s a damn myth
ChildOfChaos 3y ago
Yeah, I see this as a pretty bad day for the AI world, the splintering of talent could very much hold back development, considering how OpenAI is so far ahead of everyone else, anything that slows them down while others start up, means slower benefit to society.
- layer8 3y ago
  The disagreement seems to be exactly about whether OpenAI’s recent trajectory is beneficial to society at large.
- analognoise 3y ago
  After Silicon Valley gave everyone terrible gig jobs and disastrous social media that amplified polarization then ended privacy to sell ads, does anyone really think anything they produce is a “benefit to society”? Like how much damage do they have to do in the name of efficiency, profit, “the future” before the “benefit to society” meme dies?
- j_maffe 3y ago
  Because obviously the faster we develop tools for the rich and powerful to make more money and have more control, the better it is for society.
  - ChildOfChaos 3y ago
    OpenAi’s tools are available to most people, not really just the rich and powerful.
    - hn_throwaway_99 3y ago
      Google's tools are available to most people, yet the lion's share of the money still ends up with Google.
    - j_maffe 3y ago
      It's not just about availability (even though it is compute-limited, making it a technology only for those who have access to sufficient equipment or paying for it). Some technologies enable even more accumulation of wealth and success to the successful. AI is a prime example of that. When all the big conglomerates own all the supercomputers and have their own virtual employees, what will incentivize them to take into account the benefits of the general public?
cortesoft 3y ago
> 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. If it was a normal boardroom difference of opinion, how would it have gone down? You think there would have been public along the process? From an outsiders perspective I think both situations would have looked the same; we have no idea how long the process went on. If the board wanted to get rid of Altman but couldn’t convince him to resign, the announcement was always going to look like this.
- ithkuil 3y ago
  They could just have said that they are iterating on the CEO value alignment problem.
- hn_throwaway_99 3y ago
  To the broader public, maybe, but certainly not to OpenAI's biggest partner, and certainly not to their own board chief. And if Sutskever's beef was that OpenAI was going too fast at the expense of responsible AI development, he just completely screwed himself, as basically everyone who wants to move fast now will leave OpenAI and join the companies that do move fast. This is basically exactly what happened to Google Brain going too slowly so everyone leaving to join OpenAI and others. At least OpenAI was previously in the position of being able to guide responsible AI development, now companies will probably all go by the "drive fast or die" ethos.
- swalkergibson 3y ago
  You make such announcements outside of trading hours, and you damn sure don't imply that he was lying about something.
dathinab 3y ago
> (essentially accusing Altman of lying), the thing is there is (legally) a huge gap between lying and "not being candid" in the later case you can have a lot of subtle manipulative formulations, phrasing misleading emphasizing and de-emphasizing of parts misleading representation of what certain decisions imply, intentional not correcting when you notice that someone did misunderstand something and it will lead to them supporting decisions of you they would normally not have supported etc. all of this are legal actions (and in-actions; at least if subtle done) which still can get you fired for "breakdown of communication and/or trust" in pretty much any job, especially a position like CEO outright lying on the other hand likely can entail a lot of legal trouble in many ways so them saying that he "wasn't candid and there was a break down in communication" then it likely means that and a break down in trust but not outright lying (except if they want to downplay the situation, but why should they)
- hn_throwaway_99 3y ago
  This "legal nitpicking" is pretty much irrelevant, even in a court of law: 1. The OpenAI board certainly gave the impression that something egregious had occurred (just look at all the speculation on HN and elsewhere). I have literally never seen a separation announcement that was that pointed where there wasn't significant malfeasance. In the US, basically anyone can sue anyone else for anything. It would be quite easy to argue in court that the board gave the impression to a reasonable observer that Altman lied over something important - Kara Swisher tweeted that basically the board is screwed unless they have an extremely unambiguous smoking gun. 2. On a practical level, the legalese really doesn't matter. Then general SV opinion already seems to be that the board did Altman and Brockman dirty, it's already been reported that Altman is starting a new company, and I have no doubt heaps and heaps of OpenAI employees will jump ship to this new venture, as many high level employees have already announced their departure.
  - dathinab 3y ago
    yes the legalese doesn't matter but there is still a huge different between something which is done subtle enough to not realistically be able to be pinned down by any court but entails a fundamental break of trust (which is egregious) and what legally could count ad fraudulent actions and similar (and is eregious and can additional lead to legal cases being brought against you)
takinola 3y ago
The board may come off looking pretty bad after all is said and done. It is reasonable to fire a CEO if there is a strong disagreement on strategy and direction but it seems unreasonable to do so without adequate planning and preparation. The typical approach is to let the CEO know they are being replaced, line up a successor (even if temporary) and arrange an orderly transition (message key partners, customers, etc). This avoids the narrative getting away from you ("omg, the product is just mechanical turk, about to go bankrupt, have some serious accounting issues, CEO did crimes, etc"). These bad vibes have a way of persisting and can cause a loss of trust with key stakeholders (previously overlooked issues now get revisited with a more jaundiced eye) The way the action was taken (suddenly and with accusations) gives the appearance of personal animos rather than measured, sober judgement. Of course, there might still be good reason for taking this approach but so far, it is not looking good.
jojosbuddy 3y ago
I agree, the abrupt nature sort of indicates something serious. But I've seen "on the spot firings" somewhat with Open Source-based, high profile startups. There's always a point in a FOSS startup's life where Investors/Board/Founders/SrStaff have core communications break down in one day (aka yelling matches) and people leave immediately--typically from debate on GPLv3, legal violations w/GPLv3, profit strategy, and 'community' support. Makes me now wonder what was the orig exit strategy for OpenAI.
fskjllkj 3y ago
[flagged]
sdwr 3y ago
By the playground rule: "I'm rubber, you're glue. What bounces off me, sticks to you" The fact they had to make a release saying there was no malfeasance means there was malfeasance on their part.
cmcaleer 3y ago
If the board was in the right and there is something very serious the public doesn’t know about, why hasn’t a single member leaked the story to the press? This also doesn’t make sense with reports that Sam’s return is being negotiated, although I think this comment was made before these (unconfirmed) stories came out. The board are looking very bad here imo. Either it was serious misconduct from Sam and that should be at least leaked, or they staged a coup.
cyanydeez 3y ago
the cult of personality is typically inconsistent with large scale progress. anyone telling me this guy's the only one who can achieve the nonprofits mission seems to be high on occult business logic
boppo1 3y ago
>Sutskever's general position QRD? Haven't caught this detail yet.

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.
  - Hadriel 3y ago
    Yes but they also Determine the organization's interests
    - dathinab 3y ago
      more likely I think they found that not letting him go isn't and option due to a breakdown of communication (a formulation which normally implies a fundamental break down of trust) but the trust of the board completely braking down doesn't mean that e.g. MS doesn't trust or want him anymore as in the end the interest the board have to defend and the ones which stake holder like MS have might be in conflict so even if it has negative consequences if it must be done it might be easier to get it done fast and then resolve the mess instead of giving other a chance to turn it into an even bigger mess
  - mike_d 3y ago
    > a board's responsibility is also to make the corrective action in a responsible manner that is in the organization's interests. That very well may have happened here. It is important to consider that this is effectively an HR matter and that the results of employee investigations cannot be made public.
  - mmcwilliams 3y ago
    There's a lot of speculation about this whole fiasco but strictly speaking the board would risk being in breach of fiduciary--as stewards of a charity--if they believed that an executive had misled them about the use of assets. It may piss off their donors because of a personal preference for the executive in question but it would be their responsibility to act accordingly.
    - mlyle 3y ago
      Yes... but my point is that this doesn't preclude them taking a couple of days to figure it out, let stakeholders know, avoid making a particularly dumb public statement, changing their mind because everyone is going to quit, etc. Here, there's been a statement that there's no malfeasance, too.
- blazespin 3y ago
  Yeah, the seed of this disaster was probably planted a long time ago, like when they created the hybrid, when they got money from MSFT. Maybe Ilya doesn't want to be at the forefront of AI building I guess. He probably thinks he can lead it better by not being at the table. Or who knows.
  - dathinab 3y ago
    the hybrid structure was intentional (and known by MS etc.) created to be able to do things like rain in (or fire) a CEO which is more representing the interests of the other minority stake holders then the interests of the non-profit. So depending on the exact non-public reasons for the communication breaking down it might not be a disaster but the hybrid doing exactly what it was intended to do. Now the real interesting question is how much MS must have been afraid to be technologically left behind to knowingly enter such a deal with such a huge investment?
- deeviant 3y ago
  The problem here is: Who watches the watchers? To my eyes, and to many others, it appears the board is power-tripping. Also, OpenAI's unique structure means they have no checks on the board that an investor class would normally give. It's difficult to envision a thriving future for OpenAI under these circumstances or a world in which they are a significant factor in AI policy. Their early market lead, still a considerable advantage, will not be sufficient to weather the storm brewed by the board's own actions. Losing their market leverage would mean ceding the influential role in shaping AI's future, potentially leaving the giants such as Microsoft, Google, Amazon, and others assuming control and steering the future course of AI, but without the creed to make AI "good."
  - jaybrendansmith 3y ago
    Put another way, as seen on X: "The AI industry would like to thank the board of OpenAI for giving all of us a chance to catch up"
  - mmcwilliams 3y ago
    In a legal sense the people who watch the board members of charities are the IRS and the state regulators in the jurisdiction it's established.
jldugger 3y ago
> That the board took this action without consultation with key investors is madness. It's a non-profit board, yea?
- layer8 3y ago
  They created the for-profit subsidiary for the express purpose of raising more investments.
  - potatopatch 3y ago
    But the CEO that was done under was not sufficiently candid with the board.. I think they realized they have some risk being only a technicality that does whatever the CEO and Microsoft tell them is aligned with their mission.
  - bmitc 3y ago
    The they in this sentence refers to the CEO the board just fired and not the board.
bink 3y ago
> That the board took this action without consultation with key investors is madness. Are you expecting them to reach out to Microsoft and ask "we're thinking of firing our CEO. How does that grab you?" I don't think this is the type of thing you can really do by consulting outside groups.
- jacquesm 3y ago
  OpenAI is privately held so there would be no reason for the board to announce this publicly before consulting with / informing the shareholders. Short of an impending media crisis that they needed to get ahead of this was mishandled. That doesn't mean it was mishandled, just that I don't see any evidence just yet of a valid reason to do this, they've done absolutely enormous damage to the OpenAI brand by doing this in this hamfisted way, you'd hope they at least had a good reason. Note that the non-profit doesn't have shareholders, but the effect is much the same because the two are linked closely together and you can't affect the non-profit in such a drastic way without also affecting the for-profit arm. So they just pointed the double barrelled shotgun at their feet and pulled the trigger, twice. It will take a massive effort to restore trust in the brand, both on the commercial side and on the side of the people working there.
  - bink 3y ago
    I don't disagree that this may have been ham-fisted or that it may have been a huge mistake. But I do think that talking to investors in the for-profit arm of the company about potentially removing the figure head has an even greater potential to backfire. There's absolutely zero chance that information wouldn't leak before they could make their move. And while it might be a nice gesture to Microsoft to inform them of their decision, the truth is that Microsoft has no stake in the non-profit OpenAI and did not have any right to know of these decisions as they were being made.
    - jacquesm 3y ago
      Yes, agreed this is also perilous. But in my opinion absent a very clear and very public reason doing it this way was a huge mistake.
woeirua 3y ago
I don’t see a world where MSFT invests more money into OpenAI with the current governance structure after this. The fact that MSFT didn’t have a board seat was unusual before this. Now it just makes MSFT look like fools.
- cedws 3y ago
  Hopefully MSFT just goes off and does their own thing. I find this holier-than-thou "we're non profit and we're going to save the world how we see fit" irritating. Talking about AGI like it's an animal ready to pounce when we're quite obviously nowhere near it. Machine learning development has been sluggish for the longest time and the moment it was commercialised, there was an explosion in possibilities and development. "AI safety" is a euphemism for "aligns with our interests." "Roko's basilisk" is nonsense science fiction babble.
  - SpicyLemonZest 3y ago
    Don't these events prove pretty conclusively that AI safety is not a euphemism for "aligns with our interests"? There's no way anyone at OpenAI could have expected to benefit professionally or financially from this.
    - cedws 3y ago
      It can also mean "does/doesn't do things as we see fit." They want to build a model without bias, but they've elected themselves as moderators.
      - SpicyLemonZest 3y ago
        This isn't about bias. Sutskever has recently been dedicated to what OpenAI calls "superalignment" (https://openai.com/blog/introducing-superalignment https://openai.com/blog/introducing-superalignment), the problem of future AI systems which don't do what humans want at all because they're too smart. You can dispute that research or its premises, but after it inspires a board coup at a billion dollar company, I don't think you can reasonably dispute that people believe it.
himaraya 3y ago
The board of the non-profit doesn't answer to Microsoft etc. The investors own stakes in the for-profit subsidiary.
- kelnos 3y ago
  MS may not have any legal sway over the non-profit, but I wouldn't be surprised that in most cases they'd at least be consulted or given a heads-up on something like this, since it affects the for-profit bits of the org as well.
  - himaraya 3y ago
    OpenAI's corporate structure doesn't fall under "most cases"—I assume the board wanted to demonstrate independence from investors.
    - deleted 3y ago
      [deleted]
    - swalkergibson 3y ago
      And now I expect that we see this "board" dissolved. Frankly, as it should. If you are going to take $10B from another organization and you nuke the CEO during market hours and then later it turns out that it was just an ordinary disagreement, then you should answer for that action. On a Friday, no less. This is actually the kind of thing that can sink MSFT's apparent "first mover" advantage in the eyes of big money. OpenAI is now fractured, and whatever work they were going to be doing on tech is now going to be devoted to figuring out WTF to do with this mess the board just created all by themselves for no apparent reason.
      - davorak 3y ago
        > And now I expect that we see this "board" dissolved. The board has the power to dissolve itself, I am sure there(edit typo) are legal mechanisms for illegal acts, I think the IRS can revoke 501(c)(3) status but not dissolve, not sure if there are other mechanisms.
karmasimida 3y ago
Yup. OpenAI might just show the world how the naive ideal we are not driven by profit but spending billions every year is never a good idea. Those board has no stake in the company, on the other side means their have no accountability either. It is like they remote controlling the titanic, and who cares it crashes, because they are not on it. Regardless, they made very stupid decisions now sabotaging interests and the company itself, brutally beheaded itself.
- CPLX 3y ago
  > they made very stupid decisions now sabotaging interests and the company itself, brutally beheaded itself By firing the guy who founded Loopt? I’m genuinely mystified, where does this theory come from. What makes this guy essential?
  - karmasimida 3y ago
    > What makes this guy essential He elected himself to be the face of OpenAI That is why he is now essential. He is the hinge of trust, and people believed his vision of OpenAI, as a company. Ilya might be the science guy, but he 0 track record to run a company. And now he executes this badly planned coup, how would people trust him not to play such shticks in the future?
    - CPLX 3y ago
      It’s not a company it’s a non profit organization.
      - karmasimida 3y ago
        The world perceive the way how it wanted to and in this case legitimately so Arguing about semantics is useless
        CPLX 3y ago
        The world, or the HN comments section?
dathinab 3y ago
Honestly given all what I have heard about Sam Altman I wouldn't be surprised (i.e. speculative) if he did systematically manipulate and deceived the board (but subtle enough to not be legally "lying" or fraud) with the intention to forth through his goals no matter weather they agree or not. Assuming such situation happens in is noticed there is no reason to consult because it wouldn't change anything and just make things more complicated as the only action which can be taken is to fire the manipulator in power asap. Especially some recent actions where not so much in line with the mission the board is supposed to protect push for but very much in line with giving especially Microsoft a additional competitive advantage (i.e. additional to what Microsoft payed for). And I have seen many comments like but MS and other stake holder should have been part of the decisions and similar. But here is the think, with the specific structure of OpenAI MS and other knew from the get to go that it's a high risk investment where even through they in vest a ton of money they won't have _anything_ to say at all when it comes to decision done by the outer non-profit which is implicitly the majority owner of the for-profit OpenAI.
bmitc 3y ago
> Also raises deep concerns on governance structure. It's so strange to hear this regarding a CEO, a single person, effectively going rogue against a company's charter, but then layoffs of tens, hundreds, and thousands of workers, on the basis of zero fault of their own, by these CEOs and boards are considered good governance.
- btbuildem 3y ago
  Companies are by and large communist dictatorships - usually there is a Great Leader (CEO), at best there's the Central Committee (board of directors). Effectively, nobody else decides the direction of the company, or makes any impactful decisions. The rank-and-file serfs don't matter, they're expendable and interchangeable. When Dear Leadership is shaken up, it's newsworthy. When ten thousand labourers are let go, it's just a statistic.
  - junofan 3y ago
    I have to downvote. I don’t think this kind of agitprop belongs on this site.
    - PhasmaFelis 3y ago
      Do you feel the comparison is unfair to corporations, or to communism?
      - junofan 3y ago
        Neither. Unnecessarily politically combative language doesn’t contribute to the discussion here.
        asmithmd1 3y ago
        Tell me you have never worked in a publicly traded without saying it. This is EXACTLY what late stage "political" companies are like. There is no rational way to decide who gets the window office vs. the internal office. Everything is "political"
swalkergibson 3y ago
MSFT dropped over 1% in two minutes, and Monday is almost certainly going to feature more selling. If I am Vanguard, I am on the phone right now with Satya telling him to get control of this shitshow of a BOD before it nukes my positions.
- _lvbh 3y ago
  Why should Ilya care about Vanguard’s positions? The board he sits on is the non-profit one.
  - swalkergibson 3y ago
    Nothing happens in a vacuum. Professional boards of directors are supposed to be attentive to the risks to the organization as a whole, regardless of whatever weird ass governance structure exists. Blowing out your CEO on a Friday afternoon and then accusing him of lying is not the way to do this, and they are likely to find out why come Monday morning at about 9:30AM Eastern.
  - takinola 3y ago
    That's not how this works. OpenAI took investments for a reason. They benefit from the MSFT relationship. Harming that relationship will be bad for them (maybe not catastrophically bad, but significantly bad). I would be surprised if the relationship is not strained after this event since they have almost certainly created a major headache for MSFT (Satya is almost certainly fielding questions from his own board about this).
    - adastra22 3y ago
      I’m pretty sure it’s catastrophically bad. OpenAI’s deal with Microsoft happened when ChatGPT took off at insane rates and OpenAI experienced scaling troubles. There was literally no one except a handful of cloud operators—Google, Amazon, Microsoft, etc. who could provide enough GPUs to keep things running. Microsoft basically stepped in and said “we’ll provide the GPUs and pay the hosting bill for half the profits.” OpenAI now runs everything, from ChatGPT inference to GitHub copilot to GPT-5 training on Azure GPU instances. If Satya is as pissed as it sounds like he is, and if Ilya et al double down on their madness, Microsoft could back out and shut that all off tomorrow. OpenAI would be dead in the water, with no running product and no path to recovery.
andkenneth 3y ago
It's non-standard but I'd argue that the weird structure was designed to enable this exact type of decision to be made by the board. The non-profit board is a peer of investors like microsoft, not answerable to them like a normal company.
no_wizard 3y ago
Maybe those key investors aren’t as meaningful as they thought. It’s not per se something investors need to know about. This needs to shake out. Sam Altman was clearly not the best fit anymore. Thats the moral of the story. Why are executives special? They aren’t. It’s a damn myth

ChildOfChaos 3y ago

Yeah, I see this as a pretty bad day for the AI world, the splintering of talent could very much hold back development, considering how OpenAI is so far ahead of everyone else, anything that slows them down while others start up, means slower benefit to society.

layer8 3y ago
The disagreement seems to be exactly about whether OpenAI’s recent trajectory is beneficial to society at large.
analognoise 3y ago
After Silicon Valley gave everyone terrible gig jobs and disastrous social media that amplified polarization then ended privacy to sell ads, does anyone really think anything they produce is a “benefit to society”? Like how much damage do they have to do in the name of efficiency, profit, “the future” before the “benefit to society” meme dies?
j_maffe 3y ago
Because obviously the faster we develop tools for the rich and powerful to make more money and have more control, the better it is for society.
- ChildOfChaos 3y ago
  OpenAi’s tools are available to most people, not really just the rich and powerful.
  - hn_throwaway_99 3y ago
    Google's tools are available to most people, yet the lion's share of the money still ends up with Google.
  - j_maffe 3y ago
    It's not just about availability (even though it is compute-limited, making it a technology only for those who have access to sufficient equipment or paying for it). Some technologies enable even more accumulation of wealth and success to the successful. AI is a prime example of that. When all the big conglomerates own all the supercomputers and have their own virtual employees, what will incentivize them to take into account the benefits of the general public?

cortesoft 3y ago

> 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. If it was a normal boardroom difference of opinion, how would it have gone down? You think there would have been public along the process? From an outsiders perspective I think both situations would have looked the same; we have no idea how long the process went on. If the board wanted to get rid of Altman but couldn’t convince him to resign, the announcement was always going to look like this.

ithkuil 3y ago
They could just have said that they are iterating on the CEO value alignment problem.
hn_throwaway_99 3y ago
To the broader public, maybe, but certainly not to OpenAI's biggest partner, and certainly not to their own board chief. And if Sutskever's beef was that OpenAI was going too fast at the expense of responsible AI development, he just completely screwed himself, as basically everyone who wants to move fast now will leave OpenAI and join the companies that do move fast. This is basically exactly what happened to Google Brain going too slowly so everyone leaving to join OpenAI and others. At least OpenAI was previously in the position of being able to guide responsible AI development, now companies will probably all go by the "drive fast or die" ethos.
swalkergibson 3y ago
You make such announcements outside of trading hours, and you damn sure don't imply that he was lying about something.

dathinab 3y ago

> (essentially accusing Altman of lying), the thing is there is (legally) a huge gap between lying and "not being candid" in the later case you can have a lot of subtle manipulative formulations, phrasing misleading emphasizing and de-emphasizing of parts misleading representation of what certain decisions imply, intentional not correcting when you notice that someone did misunderstand something and it will lead to them supporting decisions of you they would normally not have supported etc. all of this are legal actions (and in-actions; at least if subtle done) which still can get you fired for "breakdown of communication and/or trust" in pretty much any job, especially a position like CEO outright lying on the other hand likely can entail a lot of legal trouble in many ways so them saying that he "wasn't candid and there was a break down in communication" then it likely means that and a break down in trust but not outright lying (except if they want to downplay the situation, but why should they)

hn_throwaway_99 3y ago
This "legal nitpicking" is pretty much irrelevant, even in a court of law: 1. The OpenAI board certainly gave the impression that something egregious had occurred (just look at all the speculation on HN and elsewhere). I have literally never seen a separation announcement that was that pointed where there wasn't significant malfeasance. In the US, basically anyone can sue anyone else for anything. It would be quite easy to argue in court that the board gave the impression to a reasonable observer that Altman lied over something important - Kara Swisher tweeted that basically the board is screwed unless they have an extremely unambiguous smoking gun. 2. On a practical level, the legalese really doesn't matter. Then general SV opinion already seems to be that the board did Altman and Brockman dirty, it's already been reported that Altman is starting a new company, and I have no doubt heaps and heaps of OpenAI employees will jump ship to this new venture, as many high level employees have already announced their departure.
- dathinab 3y ago
  yes the legalese doesn't matter but there is still a huge different between something which is done subtle enough to not realistically be able to be pinned down by any court but entails a fundamental break of trust (which is egregious) and what legally could count ad fraudulent actions and similar (and is eregious and can additional lead to legal cases being brought against you)

takinola 3y ago

The board may come off looking pretty bad after all is said and done. It is reasonable to fire a CEO if there is a strong disagreement on strategy and direction but it seems unreasonable to do so without adequate planning and preparation. The typical approach is to let the CEO know they are being replaced, line up a successor (even if temporary) and arrange an orderly transition (message key partners, customers, etc). This avoids the narrative getting away from you ("omg, the product is just mechanical turk, about to go bankrupt, have some serious accounting issues, CEO did crimes, etc"). These bad vibes have a way of persisting and can cause a loss of trust with key stakeholders (previously overlooked issues now get revisited with a more jaundiced eye) The way the action was taken (suddenly and with accusations) gives the appearance of personal animos rather than measured, sober judgement. Of course, there might still be good reason for taking this approach but so far, it is not looking good.

jojosbuddy 3y ago

I agree, the abrupt nature sort of indicates something serious. But I've seen "on the spot firings" somewhat with Open Source-based, high profile startups. There's always a point in a FOSS startup's life where Investors/Board/Founders/SrStaff have core communications break down in one day (aka yelling matches) and people leave immediately--typically from debate on GPLv3, legal violations w/GPLv3, profit strategy, and 'community' support. Makes me now wonder what was the orig exit strategy for OpenAI.

fskjllkj 3y ago

[flagged]

sdwr 3y ago

By the playground rule: "I'm rubber, you're glue. What bounces off me, sticks to you" The fact they had to make a release saying there was no malfeasance means there was malfeasance on their part.

cmcaleer 3y ago

If the board was in the right and there is something very serious the public doesn’t know about, why hasn’t a single member leaked the story to the press? This also doesn’t make sense with reports that Sam’s return is being negotiated, although I think this comment was made before these (unconfirmed) stories came out. The board are looking very bad here imo. Either it was serious misconduct from Sam and that should be at least leaked, or they staged a coup.

cyanydeez 3y ago

the cult of personality is typically inconsistent with large scale progress. anyone telling me this guy's the only one who can achieve the nonprofits mission seems to be high on occult business logic

boppo1 3y ago

>Sutskever's general position QRD? Haven't caught this detail yet.