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> On paper the board has the power and it’s their job to monitor and hire/fire the execs. But they’re dependent on the execs for info. It's way worse for the O

> On paper the board has the power and it’s their job to monitor and hire/fire the execs. But they’re dependent on the execs for info. It's way worse for the OpenAI board position in this case, because the company is basically just an assemblage of researchers, engineers, and Microsoft Azure credits. They can replace the CEO if they want, but all the value of the company can walk away if they don't like it.

deleted 2y ago
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habitue 2y ago
> the company is basically just an assemblage of <people> and <capital>. They can replace the CEO if they want, but all the value of the company can walk away if they don't like it. This is generally true of any company
- underdeserver 2y ago
  Not really. There are long term contracts, IP, infrastructure and product moats. OpenAI has virtually none of that.
- jdminhbg 2y ago
  OpenAI is substantially different from other companies in that the capital part is almost totally ephemeral (the Azure credits). Amazon employees can’t just walk across the street and start a new company because they’d be leaving all the warehouses and trucks behind.
  - red-iron-pine 2y ago
    to put a yet finer point on it, Microsoft owns the infrastructure, and can afford to throw vast sums of money at the researchers to get them hired, if needed, assuming the GOOG or other big players don't get at them first.
- jokethrowaway 2y ago
  No way, plenty of companies running simpler software can survive almost everyone leaving
- RestlessMind 2y ago
  Not really. For example, Google Search's value is mainly in the historical data it has amassed; its algorithms and infrastructure can be replicated elsewhere. Or, WhatsApp's value is in the network effects; a chat app infra and people can be replaced.
n2d4 2y ago
> all the value of the company can walk away if they don't like it They really can't, because a majority of their compensation is in now-unreasonable amounts of OpenAI equity (because it was worth much less when it was granted). If employees decided to walk away, rendering their vested equity worthless, they wouldn't get anywhere near the same value of, say, Microsoft equity as a signing bonus to make it worth. Any senior OpenAI employee with decent amounts of vested equity on low valuations has strong financial incentives to stick with the company, and also strong financial incentives to convince others to stick with the company. Some more thoughts from back when employees "threatened" to leave: https://www.businessinsider.com/openai-employees-did-not-want-to-work-for-microsoft-2023-12 https://www.businessinsider.com/openai-employees-did-not-wan...
- jdminhbg 2y ago
  > They really can't, because a majority of their compensation is in now-unreasonable amounts of OpenAI equity (because it was worth much less when it was granted). If employees decided to walk away, rendering their vested equity worthless, they wouldn't get anywhere near the same value of, say, Microsoft equity as a signing bonus to make it worth. The problem with this is that the board was basically threatening to also make their equity worthless by taking the position that Sam was moving too fast to commercialize the company. They pretty much burned their leverage everywhere possible.
  - dcow 2y ago
    I guess the takeaway is you can’t give equity to employees and also expect them to operate in a way that reflects the charter of a non-for-profit governing board.
  - n2d4 2y ago
    The board never took that position.

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habitue 2y ago

> the company is basically just an assemblage of <people> and <capital>. They can replace the CEO if they want, but all the value of the company can walk away if they don't like it. This is generally true of any company

underdeserver 2y ago
Not really. There are long term contracts, IP, infrastructure and product moats. OpenAI has virtually none of that.
jdminhbg 2y ago
OpenAI is substantially different from other companies in that the capital part is almost totally ephemeral (the Azure credits). Amazon employees can’t just walk across the street and start a new company because they’d be leaving all the warehouses and trucks behind.
- red-iron-pine 2y ago
  to put a yet finer point on it, Microsoft owns the infrastructure, and can afford to throw vast sums of money at the researchers to get them hired, if needed, assuming the GOOG or other big players don't get at them first.
jokethrowaway 2y ago
No way, plenty of companies running simpler software can survive almost everyone leaving
RestlessMind 2y ago
Not really. For example, Google Search's value is mainly in the historical data it has amassed; its algorithms and infrastructure can be replicated elsewhere. Or, WhatsApp's value is in the network effects; a chat app infra and people can be replaced.

n2d4 2y ago

> all the value of the company can walk away if they don't like it They really can't, because a majority of their compensation is in now-unreasonable amounts of OpenAI equity (because it was worth much less when it was granted). If employees decided to walk away, rendering their vested equity worthless, they wouldn't get anywhere near the same value of, say, Microsoft equity as a signing bonus to make it worth. Any senior OpenAI employee with decent amounts of vested equity on low valuations has strong financial incentives to stick with the company, and also strong financial incentives to convince others to stick with the company. Some more thoughts from back when employees "threatened" to leave: https://www.businessinsider.com/openai-employees-did-not-want-to-work-for-microsoft-2023-12 https://www.businessinsider.com/openai-employees-did-not-wan...

jdminhbg 2y ago
> They really can't, because a majority of their compensation is in now-unreasonable amounts of OpenAI equity (because it was worth much less when it was granted). If employees decided to walk away, rendering their vested equity worthless, they wouldn't get anywhere near the same value of, say, Microsoft equity as a signing bonus to make it worth. The problem with this is that the board was basically threatening to also make their equity worthless by taking the position that Sam was moving too fast to commercialize the company. They pretty much burned their leverage everywhere possible.
- dcow 2y ago
  I guess the takeaway is you can’t give equity to employees and also expect them to operate in a way that reflects the charter of a non-for-profit governing board.
- n2d4 2y ago
  The board never took that position.