6 ms·

So even if you maintain strict board control, the money people can still kick you out. Incredible!

by lulznews 3y ago

fallingknife 3y ago
Technically no, but when 90% of their employees threatened to quit, they would just be the board of nothing.
- firebirdn99 3y ago
  The board was a non profit board serving the mission. Mission was foremost. Employees are not. One of the comments a member made was, if the company was destroyed, it would still be consistent with serving the mission. Which is right. The fallout showed non-profit missions can't co-exist with for-profit incentives. And the power that investors were exerting, and employees (who would also benefit from the recent 70B round they were going to have) was too much. And any disclaimer the investors got when investing in OpenAI was meaningless. It reportedly stated they would be wise in viewing their investment as charity, and they can potentially lose everything. And there was an AGI clause that said it will reconsider all financial arrangements, that Microsoft and other investors had when investing in the company was all worthless. Link to Wired article with interesting details -https://www.wired.com/story/what-openai-really-wants/ https://www.wired.com/story/what-openai-really-wants/
  - rvba 3y ago
    If it was a for-profit company would you write that "profit is foremost and 90% employees can leave"?
  - khazhoux 3y ago
    > One of the comments a member made was, if the company was destroyed, it would still be consistent with serving the mission. Which is right. I know you're quoting the (now-gone) board member, but this is a ridiculous take. By this standard, Google should have dissolved in 2000 ("Congrats everyone, we didn't be evil!"). Doctors would go away too ("Primum non nocere -- you're all dismissed!").
    - jacquesm 3y ago
      Indeed, it made no sense. But that's why I never attach any value to mission statements or principles of large entities: they are there as window dressing and preemptive whitewash. They never ever survive their first real test.
  - marcus0x62 3y ago
    > The board was a non profit board serving the mission. Mission was foremost. Employees are not. They need employees to advance their stated mission. > One of the comments a member made was, if the company was destroyed, it would still be consistent with serving the mission. Which is right. I mean, that's a nice sound bite and everything, but the only scenario where blowing up the company seems to be consistent with their mission is the scenario where Open AI itself achieves a breakthrough in AGI and where the board thinks that system cannot be made safe. Otherwise, to be relevant in guiding research towards AGI, they need to stay a going concern, and that means not running off 90% of the employee base.
    - firebirdn99 3y ago
      > Otherwise, to be relevant in guiding research towards AGI, they need to stay a going concern, and that means not running off 90% of the employee base. That's why they presumably agreed to find a solution. But at the same time shows that in essence, entities with for-profit incentives find a way to get what they want. There certainly needs to be more thought and discussion about governance, and how we collectively as a species or each company individually governs AI.
      - sanderjd 3y ago
        I don't really think we need more thought and discussion on creative structures for "governance" of this technology. We already have governance; we call them governments, and we elect a bunch of representatives to run them, we don't rely on a few people on a self-appointed non profit board.
  - sanderjd 3y ago
    Yep, this is spot on. The entire concept of a mission driven non profit with a for profit subsidiary just wasn't workable. It was a nice idea, a nice try, but an utter failure. The silver lining is that this should clear the path to proper regulation, as it's now clear that this self-regulation approach was given a go, and just didn't work.
Aperocky 3y ago
The board could have stayed, they (and OpenAI) just had to bear with the consequences (i.e. all the employees leave). There are no board that can prevent employees from leaving, nor should there.
- jacquesm 3y ago
  That depends on whether the board was there to provide cover and protection against regulation/nationalization or whether it was supposed to have an actual role. Apparently some board members believed that they had an actual role and others understood that they were just a fig leaf and that ultimately money (and employees) hold the strings.
  - vikramkr 3y ago
    No, to the specific question of making employees stay, that's not a thing that you can do outside of prisons. If employees want to leave they can leave. If they want to start the nonprofit from scratch, they can do that but employees cannot be stopped from leaving
    - jacquesm 3y ago
      Was anyone arguing that or am I misunderstanding you? Of course they are free to leave, that's obvious. I think the point was: the employees have that power and nothing will take that away from them.
      - vikramkr 3y ago
        The gp said there's no way a board can stop employees from leaving and the one I was replying to started with "that depends" and suggested it was a question as to whether the board "believed" employees held all the strings. Though reading it again the parent does seem a bit non-sequitor from the gp which was strictly talking about what the board physically could have done, as in what options they had. The options they had don't really depend on any particular belief - they couldn't have made them stay thanks to the civil war and stuff
stingraycharles 3y ago
I think the whole OpenAI team being determined to follow Sam was crucial in all this, and is not something that’s easy to control. Having said that, as there’s obviously a lot of money involved for all OpenAI employees (Microsoft offered very generous packages if they jumped ship), it can be said that money in the end is what people care a lot about.
- coredog64 3y ago
  Allegedly (per Twitter) there was a persistent effort by a small group to get those signatures rather than an organic ride-or-die attitude. However, as you note, Sam’s exit would have cost those employees at least high six figures, so I’m sure that reduced the amount of leverage required to extract signatures.
refulgentis 3y ago
Ty for pointing this out. Massive, massive, corporate governance loss.
- khazhoux 3y ago
  A better lesson is that a board can't govern a company if the company won't follow its lead. They were misaligned with almost the entirety of the employees.
  - simbolit 3y ago
    Because they formed an additional entity, which is a for-profit, and has leadership treating the whole thing as a for-profit, and so employees also see what their eyes are telling them. The misalignment is not accidental, it was carefully developed over the last few years.
    - khazhoux 3y ago
      Or: the employees all joined to work on AI, and they succeeded at building the top AI company, under Sam, and their support of Sam was not engineered or any sort of judgement error on their part. I like to imagine that the employees are smart and thoughtful and have full agency over their own values. It was the Board who apparently had zero pulse on the company they were supposed to oversee.
      - seattleeng 3y ago
        the majority if the employees at openai joined after chatGPT launched, so it's not like there's some sense of nostalgia or forlorn distress for what they built slowly changing. The stock comp (sorry, "PPUs"... which are a phantom stock plan lol) is also quite high (check levels.fyi) and would have been high 7 to low 8 figures for engineers if secondary/tender offers were made. I agree it's not that deep - they wanted to join a hypergrowth startup, build cool stuff, and get paid. If someone is rocking the boat, you throw them off the boat. No mission alignment needed! :)
rmbyrro 3y ago
Not the "money people", but the extremely bad way they removed Altman, I think. It made it easy to sway employees to Altman's favor and pressure the board. If the employees were not cohesive on Altman's side, he probably wouldn't be back...
- jrockway 3y ago
  Yeah, I think this was "700 out of 730 employees signed a letter saying they'd quit, over a holiday weekend". OpenAI with no employees is not worth a whole lot.
  - sanderjd 3y ago
    This episode taught us the very obvious lesson that if you hire people incentivized by equity growth, it is not possible to take steps that detrimentally impact equity growth, without losing all those people. The board had already lost the moment it allowed hundreds of fat compensation packages to be signed.
    - Aperocky 3y ago
      > lost the moment it allowed hundreds of fat compensation packages to be signed. There will be no OpenAI to begin with had that not been the case.
      - sanderjd 3y ago
        Maybe maybe not. There certainly wouldn't have been the version of OpenAI that runs a massively successful and profitable AI product company. But reading the OpenAI charter, it's pretty clear that running a massively successful AI product company was never a necessary component of the organization; and indeed, as we just saw, is actually a conflict of interest with the organization's charter. I don't really care much about the demise of OpenAI-the-nonprofit - I don't think it was ever a very promising approach to accomplishing its own goals, so I don't lament its failure all that much - but I feel like there is a kind of gaslighting going on, where people are trying to erase the history of the organization as a mission-oriented non-profit, and claim that it was always intended to be a wildly profitable product company, and that just isn't the case.
paulddraper 3y ago
Gosh sure is hard to have a business if none of your employees want to work for you.
- sanderjd 3y ago
  Hard to run a non profit when you promised all your employees you'd make them millionaires.
  - paulddraper 3y ago
    I'm pretty sure all the employees are employed by a for-profit.
    - sanderjd 3y ago
      I don't know if that's true of all of them, but it certainly seems to be true of most, and that's entirely my point: the structure just doesn't work. All (or at least the vast majority) of the employees have for-profit incentives, which - as we've now seen - makes it impossible for the non-profit board to act in accordance with their mission, when those actions conflict with the for-profit incentives, as they inevitably will. It was doomed from the start.
mikeryan 3y ago
Not sure that’s the exact case. Once the employees threatened en masse to quit, all the power shifted to Sam and Greg’s hands - which I’m not sure they had up to that point. I still think the board did what they thought was right (and maybe even was?), but not having the pulse of the company and their lack of operational experience was fatal.
- jacquesm 3y ago
  It looked like this was all decided in a hurry rather than that stakeholder buy-in was achieved. And maybe that's because if they had tried to get that buy-in the cat would be out of the bag and they would find even more opposition. It also partially explains why they didn't have a plan post-firing Sam but tried a whole bunch of weird (and weirder) moves.
deleted 3y ago
[deleted]
drexlspivey 3y ago
You can play board room all you want but the guy with the GPUs has the real power

So even if you maintain strict board control, the money people can still kick you out. Incredible!

fallingknife 3y ago

Technically no, but when 90% of their employees threatened to quit, they would just be the board of nothing.

firebirdn99 3y ago
The board was a non profit board serving the mission. Mission was foremost. Employees are not. One of the comments a member made was, if the company was destroyed, it would still be consistent with serving the mission. Which is right. The fallout showed non-profit missions can't co-exist with for-profit incentives. And the power that investors were exerting, and employees (who would also benefit from the recent 70B round they were going to have) was too much. And any disclaimer the investors got when investing in OpenAI was meaningless. It reportedly stated they would be wise in viewing their investment as charity, and they can potentially lose everything. And there was an AGI clause that said it will reconsider all financial arrangements, that Microsoft and other investors had when investing in the company was all worthless. Link to Wired article with interesting details -https://www.wired.com/story/what-openai-really-wants/ https://www.wired.com/story/what-openai-really-wants/
- rvba 3y ago
  If it was a for-profit company would you write that "profit is foremost and 90% employees can leave"?
- khazhoux 3y ago
  > One of the comments a member made was, if the company was destroyed, it would still be consistent with serving the mission. Which is right. I know you're quoting the (now-gone) board member, but this is a ridiculous take. By this standard, Google should have dissolved in 2000 ("Congrats everyone, we didn't be evil!"). Doctors would go away too ("Primum non nocere -- you're all dismissed!").
  - jacquesm 3y ago
    Indeed, it made no sense. But that's why I never attach any value to mission statements or principles of large entities: they are there as window dressing and preemptive whitewash. They never ever survive their first real test.
- marcus0x62 3y ago
  > The board was a non profit board serving the mission. Mission was foremost. Employees are not. They need employees to advance their stated mission. > One of the comments a member made was, if the company was destroyed, it would still be consistent with serving the mission. Which is right. I mean, that's a nice sound bite and everything, but the only scenario where blowing up the company seems to be consistent with their mission is the scenario where Open AI itself achieves a breakthrough in AGI and where the board thinks that system cannot be made safe. Otherwise, to be relevant in guiding research towards AGI, they need to stay a going concern, and that means not running off 90% of the employee base.
  - firebirdn99 3y ago
    > Otherwise, to be relevant in guiding research towards AGI, they need to stay a going concern, and that means not running off 90% of the employee base. That's why they presumably agreed to find a solution. But at the same time shows that in essence, entities with for-profit incentives find a way to get what they want. There certainly needs to be more thought and discussion about governance, and how we collectively as a species or each company individually governs AI.
    - sanderjd 3y ago
      I don't really think we need more thought and discussion on creative structures for "governance" of this technology. We already have governance; we call them governments, and we elect a bunch of representatives to run them, we don't rely on a few people on a self-appointed non profit board.
- sanderjd 3y ago
  Yep, this is spot on. The entire concept of a mission driven non profit with a for profit subsidiary just wasn't workable. It was a nice idea, a nice try, but an utter failure. The silver lining is that this should clear the path to proper regulation, as it's now clear that this self-regulation approach was given a go, and just didn't work.

Aperocky 3y ago

The board could have stayed, they (and OpenAI) just had to bear with the consequences (i.e. all the employees leave). There are no board that can prevent employees from leaving, nor should there.

jacquesm 3y ago
That depends on whether the board was there to provide cover and protection against regulation/nationalization or whether it was supposed to have an actual role. Apparently some board members believed that they had an actual role and others understood that they were just a fig leaf and that ultimately money (and employees) hold the strings.
- vikramkr 3y ago
  No, to the specific question of making employees stay, that's not a thing that you can do outside of prisons. If employees want to leave they can leave. If they want to start the nonprofit from scratch, they can do that but employees cannot be stopped from leaving
  - jacquesm 3y ago
    Was anyone arguing that or am I misunderstanding you? Of course they are free to leave, that's obvious. I think the point was: the employees have that power and nothing will take that away from them.
    - vikramkr 3y ago
      The gp said there's no way a board can stop employees from leaving and the one I was replying to started with "that depends" and suggested it was a question as to whether the board "believed" employees held all the strings. Though reading it again the parent does seem a bit non-sequitor from the gp which was strictly talking about what the board physically could have done, as in what options they had. The options they had don't really depend on any particular belief - they couldn't have made them stay thanks to the civil war and stuff

stingraycharles 3y ago

I think the whole OpenAI team being determined to follow Sam was crucial in all this, and is not something that’s easy to control. Having said that, as there’s obviously a lot of money involved for all OpenAI employees (Microsoft offered very generous packages if they jumped ship), it can be said that money in the end is what people care a lot about.

coredog64 3y ago
Allegedly (per Twitter) there was a persistent effort by a small group to get those signatures rather than an organic ride-or-die attitude. However, as you note, Sam’s exit would have cost those employees at least high six figures, so I’m sure that reduced the amount of leverage required to extract signatures.

refulgentis 3y ago

Ty for pointing this out. Massive, massive, corporate governance loss.

khazhoux 3y ago
A better lesson is that a board can't govern a company if the company won't follow its lead. They were misaligned with almost the entirety of the employees.
- simbolit 3y ago
  Because they formed an additional entity, which is a for-profit, and has leadership treating the whole thing as a for-profit, and so employees also see what their eyes are telling them. The misalignment is not accidental, it was carefully developed over the last few years.
  - khazhoux 3y ago
    Or: the employees all joined to work on AI, and they succeeded at building the top AI company, under Sam, and their support of Sam was not engineered or any sort of judgement error on their part. I like to imagine that the employees are smart and thoughtful and have full agency over their own values. It was the Board who apparently had zero pulse on the company they were supposed to oversee.
    - seattleeng 3y ago
      the majority if the employees at openai joined after chatGPT launched, so it's not like there's some sense of nostalgia or forlorn distress for what they built slowly changing. The stock comp (sorry, "PPUs"... which are a phantom stock plan lol) is also quite high (check levels.fyi) and would have been high 7 to low 8 figures for engineers if secondary/tender offers were made. I agree it's not that deep - they wanted to join a hypergrowth startup, build cool stuff, and get paid. If someone is rocking the boat, you throw them off the boat. No mission alignment needed! :)

rmbyrro 3y ago

Not the "money people", but the extremely bad way they removed Altman, I think. It made it easy to sway employees to Altman's favor and pressure the board. If the employees were not cohesive on Altman's side, he probably wouldn't be back...

jrockway 3y ago
Yeah, I think this was "700 out of 730 employees signed a letter saying they'd quit, over a holiday weekend". OpenAI with no employees is not worth a whole lot.
- sanderjd 3y ago
  This episode taught us the very obvious lesson that if you hire people incentivized by equity growth, it is not possible to take steps that detrimentally impact equity growth, without losing all those people. The board had already lost the moment it allowed hundreds of fat compensation packages to be signed.
  - Aperocky 3y ago
    > lost the moment it allowed hundreds of fat compensation packages to be signed. There will be no OpenAI to begin with had that not been the case.
    - sanderjd 3y ago
      Maybe maybe not. There certainly wouldn't have been the version of OpenAI that runs a massively successful and profitable AI product company. But reading the OpenAI charter, it's pretty clear that running a massively successful AI product company was never a necessary component of the organization; and indeed, as we just saw, is actually a conflict of interest with the organization's charter. I don't really care much about the demise of OpenAI-the-nonprofit - I don't think it was ever a very promising approach to accomplishing its own goals, so I don't lament its failure all that much - but I feel like there is a kind of gaslighting going on, where people are trying to erase the history of the organization as a mission-oriented non-profit, and claim that it was always intended to be a wildly profitable product company, and that just isn't the case.

paulddraper 3y ago

Gosh sure is hard to have a business if none of your employees want to work for you.

sanderjd 3y ago
Hard to run a non profit when you promised all your employees you'd make them millionaires.
- paulddraper 3y ago
  I'm pretty sure all the employees are employed by a for-profit.
  - sanderjd 3y ago
    I don't know if that's true of all of them, but it certainly seems to be true of most, and that's entirely my point: the structure just doesn't work. All (or at least the vast majority) of the employees have for-profit incentives, which - as we've now seen - makes it impossible for the non-profit board to act in accordance with their mission, when those actions conflict with the for-profit incentives, as they inevitably will. It was doomed from the start.

mikeryan 3y ago

Not sure that’s the exact case. Once the employees threatened en masse to quit, all the power shifted to Sam and Greg’s hands - which I’m not sure they had up to that point. I still think the board did what they thought was right (and maybe even was?), but not having the pulse of the company and their lack of operational experience was fatal.

jacquesm 3y ago
It looked like this was all decided in a hurry rather than that stakeholder buy-in was achieved. And maybe that's because if they had tried to get that buy-in the cat would be out of the bag and they would find even more opposition. It also partially explains why they didn't have a plan post-firing Sam but tried a whole bunch of weird (and weirder) moves.

deleted 3y ago

[deleted]

drexlspivey 3y ago

You can play board room all you want but the guy with the GPUs has the real power