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So, even if the board was justified in its actions (quite possible), the way in which they have gone about it will be studied for years as what not to do. This

So, even if the board was justified in its actions (quite possible), the way in which they have gone about it will be studied for years as what not to do. This was bush league level of PR mistakes and miscommunication. And the fact that OpenAI is a total $90B juggernaut of a company made this amateur hour so much worse.

lolinder 3y ago
Alternatively, the board is up against someone who is very good at spinning any story in their favor. They could come off as amateurish when they're up against someone as charismatic as Sam Altman, but it's unlikely that very many boards could have done better given the circumstances.
- vikramkr 3y ago
  I mean, waiting 30 minutes to not release it before market close and pissing off Microsoft is a very obvious thing that it's still staggering that they didn't handle correctly. Immediately pissing off your biggest financial supporter is pretty unforgiveably incompetent
  - himaraya 3y ago
    Not that different from releasing the news on a Friday after-hours, honestly. Microsoft would get pissed off by the shift from profit-seeking either way.
    - lolinder 3y ago
      Exactly. So much of the commentary surrounding this is assuming that the board is motivated to act like the board of a startup, and therefore what they've done is amateurish because it would kill a startup. But the remaining members of the board are all very clearly not invested in OpenAI becoming an insanely profitable company—they're on the board of a nonprofit, in charge of the mission and the charter, not in charge of maximizing profit. I'm sure that there are things they could have done better even with that context, but I think most of the confusion stems from people on here not understanding the motivations of these people.
      - goosinmouse 3y ago
        I feel like once the for-profit "genie" is out of the bottle, it can't be put back in. How many employees have they hired since 2018 that are the absolute best of the best of the industry? How influential was the massive equity package in their employment decisions? Personally i saw the for-profit subsidiary as a pretty decent middle ground. Obviously this action took place because the current board felt the company moved too far in the for-profit direction. While they do have the technical right and ability to fire Sam and Greg, and it was the "right" thing to do to bring the company back to the non-profit roots, do you really think the employees saw it the same way? How many hours do the board minus Ilya actually contribute in a week to OpenAI? None of the board members minus Ilya were even around before the for-profit subsidy was created so can they truly align the new OpenAI with something they didnt experience? Also an aspect i didn't really see anywhere but they had 3 board members leave in 2023. How would those board members have voted? I'd guess probably not to fire Sam but i have no clue. Also why did they not add more board members when those left? Did Sam and Greg want the board expanded again but the other 3 kept voting to not expand and to keep the power?
  - CPLX 3y ago
    Why would a charity time staffing announcements to the hours of the stock market?
    - danielbln 3y ago
      Because they don't exist in a vacuum and relationships matter, even to a charity, and not pissing off a trillion dollar company for no good reason might be beneficial.
      - CPLX 3y ago
        Why would it be beneficial if the mission of the charity is explicitly to keep AI technology from being under the influence and control of private trillion dollar companies?
        terafo 3y ago
        I don't know, maybe because it's their main partner that have given them billions of dollars and which is literally running their servers?
        CPLX 3y ago
        But the servers are basically there to support the product that they’re selling. What if they feel like they shouldn’t be focused on selling a product? In the 20 threads about this topic on HN over the last few days I’m really kind of blown away by the inability for people to see a different worldview than their own. Wanting a stake in hot in demand super valuable tech company that’s growing rapidly is a value judgment. Not everyone wants that. Some people actively think companies like this are harming society.
        terafo 3y ago
        > But the servers are basically there to support the product that they’re selling. Everything they do needs LOTS of compute. GPT-4 training alone took 100 million GPU hours to train. And they are constantly training new models. And even non-training research is VERY expensive[1]. Without compute that organization is as good as dead. [1] https://openai.com/research/language-models-can-explain-neurons-in-language-models https://openai.com/research/language-models-can-explain-neur...
hef19898 3y ago
Just shows that valuations have zero to do with professionalism.
lotsofpulp 3y ago
What is wrong with what the board did? Looks like routine business to me.
- vikramkr 3y ago
  The problem is that they tried to take down the king and missed. They didn't achieve their goals
  - mark_l_watson 3y ago
    Did they miss? Legally, the board majority controls both the non profit 501 and the ‘owned’ commercial for profit entity. Those 4 board members only lose if they resign, otherwise there is no way to get rid of them. I must admit that my opinion/perspective has changed on this issue in the last 35 hours. I believe that when AGI is achieved it can help with serious societal, scientific, and environmental problems, so I am by nature ‘full speed ahead.’ However, I now think that the board performed its legal fiduciary responsibilities and acted correctly. I changed my mind late Friday night after reviewing the 501 charter. It is the board’s obligation to act. I am also a big fan of Sam Altman and I can’t wait to see what he does next.
    - vikramkr 3y ago
      Given the recent updates, yep they definitely missed lol. That's a lot of "openai is nothing without its people" tweets, including from the interim CEO...
    - terafo 3y ago
      Have you seen heart storm that happened yesterday? There is no point in controlling legal entity if the talent, resources and leadership isn't there.
      - mark_l_watson 3y ago
        Support of the staff for Sam Altman is impressive and well deserved. But legally, the board does not have to cave in. I am really curious what will happen this week!
pk-protect-ai 3y ago
I'd say that the mistake was failing to announce the conflict of interest in the memo, if it actually exists. Announcing it on a Friday was also a mistake, but there might be one or two circumstances where delaying the announcement could cause greater harm to OpenAI, should a conflict of interest be present. Other than that, no one will care about this in a month.
CPLX 3y ago
It’s not a company it’s a charity.
- renegade-otter 3y ago
  It is definitely not. OpenAI has a very complicated and unconventional structure, where the non-profit arm oversees the for-profit subsidiary: https://openai.com/our-structure https://openai.com/our-structure
  - CPLX 3y ago
    Yeah and the non-profit arm is a public charity. Everything else is under the complete control of that charity. So it’s a charity.
  - lolinder 3y ago
    Your link makes it very clear that the for-profit arm is wholly controlled by the non-profit arm, and is bound to pursue the mission of the nonprofit. It's not what would traditionally be called a "charity", but the for-profit arm exists only to serve the mission: > So we devised a structure to preserve our Nonprofit’s core mission, governance, and oversight while enabling us to raise the capital for our mission: > The OpenAI Nonprofit would remain intact, with its board continuing as the overall governing body for all OpenAI activities. > A new for-profit subsidiary would be formed, capable of issuing equity to raise capital and hire world class talent, but still at the direction of the Nonprofit. Employees working on for-profit initiatives were transitioned over to the new subsidiary. > The for-profit would be legally bound to pursue the Nonprofit’s mission, and carry out that mission by engaging in research, development, commercialization and other core operations.
Animats 3y ago
Does OpenAI make a profit, or is that just hype? Remember, Uber, over time, has been a net lose financially.
- CPLX 3y ago
  Uber isn’t a public charity.
dontupvoteme 3y ago
Or they did it explicitly in this manner to remind everyone that It's a Non-Profit at the very top. They hold zero fiduciary duty to Microsoft or anyone else.
Solvency 3y ago
Microsoft is equally amateur. Even I the layman can take one look at OpenAI's ridiculously convoluted structure and it's laughably threadbare and ill-equipped board members and know something is wrong. Microsoft should have looked at this and forced them to clean up their act before getting in bed with them. Now they're embroiled in the bush league shenanigans.
MrMan 3y ago
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lolinder 3y ago

Alternatively, the board is up against someone who is very good at spinning any story in their favor. They could come off as amateurish when they're up against someone as charismatic as Sam Altman, but it's unlikely that very many boards could have done better given the circumstances.

vikramkr 3y ago
I mean, waiting 30 minutes to not release it before market close and pissing off Microsoft is a very obvious thing that it's still staggering that they didn't handle correctly. Immediately pissing off your biggest financial supporter is pretty unforgiveably incompetent
- himaraya 3y ago
  Not that different from releasing the news on a Friday after-hours, honestly. Microsoft would get pissed off by the shift from profit-seeking either way.
  - lolinder 3y ago
    Exactly. So much of the commentary surrounding this is assuming that the board is motivated to act like the board of a startup, and therefore what they've done is amateurish because it would kill a startup. But the remaining members of the board are all very clearly not invested in OpenAI becoming an insanely profitable company—they're on the board of a nonprofit, in charge of the mission and the charter, not in charge of maximizing profit. I'm sure that there are things they could have done better even with that context, but I think most of the confusion stems from people on here not understanding the motivations of these people.
    - goosinmouse 3y ago
      I feel like once the for-profit "genie" is out of the bottle, it can't be put back in. How many employees have they hired since 2018 that are the absolute best of the best of the industry? How influential was the massive equity package in their employment decisions? Personally i saw the for-profit subsidiary as a pretty decent middle ground. Obviously this action took place because the current board felt the company moved too far in the for-profit direction. While they do have the technical right and ability to fire Sam and Greg, and it was the "right" thing to do to bring the company back to the non-profit roots, do you really think the employees saw it the same way? How many hours do the board minus Ilya actually contribute in a week to OpenAI? None of the board members minus Ilya were even around before the for-profit subsidy was created so can they truly align the new OpenAI with something they didnt experience? Also an aspect i didn't really see anywhere but they had 3 board members leave in 2023. How would those board members have voted? I'd guess probably not to fire Sam but i have no clue. Also why did they not add more board members when those left? Did Sam and Greg want the board expanded again but the other 3 kept voting to not expand and to keep the power?
- CPLX 3y ago
  Why would a charity time staffing announcements to the hours of the stock market?
  - danielbln 3y ago
    Because they don't exist in a vacuum and relationships matter, even to a charity, and not pissing off a trillion dollar company for no good reason might be beneficial.
    - CPLX 3y ago
      Why would it be beneficial if the mission of the charity is explicitly to keep AI technology from being under the influence and control of private trillion dollar companies?
      - terafo 3y ago
        I don't know, maybe because it's their main partner that have given them billions of dollars and which is literally running their servers?
        CPLX 3y ago
        But the servers are basically there to support the product that they’re selling. What if they feel like they shouldn’t be focused on selling a product? In the 20 threads about this topic on HN over the last few days I’m really kind of blown away by the inability for people to see a different worldview than their own. Wanting a stake in hot in demand super valuable tech company that’s growing rapidly is a value judgment. Not everyone wants that. Some people actively think companies like this are harming society.
        terafo 3y ago
        > But the servers are basically there to support the product that they’re selling. Everything they do needs LOTS of compute. GPT-4 training alone took 100 million GPU hours to train. And they are constantly training new models. And even non-training research is VERY expensive[1]. Without compute that organization is as good as dead. [1] https://openai.com/research/language-models-can-explain-neurons-in-language-models https://openai.com/research/language-models-can-explain-neur...

hef19898 3y ago

Just shows that valuations have zero to do with professionalism.

lotsofpulp 3y ago

What is wrong with what the board did? Looks like routine business to me.

vikramkr 3y ago
The problem is that they tried to take down the king and missed. They didn't achieve their goals
- mark_l_watson 3y ago
  Did they miss? Legally, the board majority controls both the non profit 501 and the ‘owned’ commercial for profit entity. Those 4 board members only lose if they resign, otherwise there is no way to get rid of them. I must admit that my opinion/perspective has changed on this issue in the last 35 hours. I believe that when AGI is achieved it can help with serious societal, scientific, and environmental problems, so I am by nature ‘full speed ahead.’ However, I now think that the board performed its legal fiduciary responsibilities and acted correctly. I changed my mind late Friday night after reviewing the 501 charter. It is the board’s obligation to act. I am also a big fan of Sam Altman and I can’t wait to see what he does next.
  - vikramkr 3y ago
    Given the recent updates, yep they definitely missed lol. That's a lot of "openai is nothing without its people" tweets, including from the interim CEO...
  - terafo 3y ago
    Have you seen heart storm that happened yesterday? There is no point in controlling legal entity if the talent, resources and leadership isn't there.
    - mark_l_watson 3y ago
      Support of the staff for Sam Altman is impressive and well deserved. But legally, the board does not have to cave in. I am really curious what will happen this week!

pk-protect-ai 3y ago

I'd say that the mistake was failing to announce the conflict of interest in the memo, if it actually exists. Announcing it on a Friday was also a mistake, but there might be one or two circumstances where delaying the announcement could cause greater harm to OpenAI, should a conflict of interest be present. Other than that, no one will care about this in a month.

CPLX 3y ago

It’s not a company it’s a charity.

renegade-otter 3y ago
It is definitely not. OpenAI has a very complicated and unconventional structure, where the non-profit arm oversees the for-profit subsidiary: https://openai.com/our-structure https://openai.com/our-structure
- CPLX 3y ago
  Yeah and the non-profit arm is a public charity. Everything else is under the complete control of that charity. So it’s a charity.
- lolinder 3y ago
  Your link makes it very clear that the for-profit arm is wholly controlled by the non-profit arm, and is bound to pursue the mission of the nonprofit. It's not what would traditionally be called a "charity", but the for-profit arm exists only to serve the mission: > So we devised a structure to preserve our Nonprofit’s core mission, governance, and oversight while enabling us to raise the capital for our mission: > The OpenAI Nonprofit would remain intact, with its board continuing as the overall governing body for all OpenAI activities. > A new for-profit subsidiary would be formed, capable of issuing equity to raise capital and hire world class talent, but still at the direction of the Nonprofit. Employees working on for-profit initiatives were transitioned over to the new subsidiary. > The for-profit would be legally bound to pursue the Nonprofit’s mission, and carry out that mission by engaging in research, development, commercialization and other core operations.

Animats 3y ago

Does OpenAI make a profit, or is that just hype? Remember, Uber, over time, has been a net lose financially.

CPLX 3y ago
Uber isn’t a public charity.

dontupvoteme 3y ago

Or they did it explicitly in this manner to remind everyone that It's a Non-Profit at the very top. They hold zero fiduciary duty to Microsoft or anyone else.

Solvency 3y ago

Microsoft is equally amateur. Even I the layman can take one look at OpenAI's ridiculously convoluted structure and it's laughably threadbare and ill-equipped board members and know something is wrong. Microsoft should have looked at this and forced them to clean up their act before getting in bed with them. Now they're embroiled in the bush league shenanigans.

MrMan 3y ago

[dead]