April 24, 2024

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Sam Altman confirms his control of OpenAI as he rejoins its board of directors

Sam Altman confirms his control of OpenAI as he rejoins its board of directors

The completion of the investigation into the messy firing of Sam Altman from OpenAI more than three months ago represents a resounding victory for the high-profile CEO as he moves to reassert control of the artificial intelligence company he helped create.

Mr. Altman, who returned to OpenAI just five days after being fired in November, had not done anything to warrant his dismissal and would regain the one role at the company that remains elusive, OpenAI said at a news conference on Friday. He has: a seat on the company's board of directors.

Mr. Altman's ouster has stunned Silicon Valley and put the future of one of the technology industry's most influential startups in jeopardy. It also raised questions about whether OpenAI — with or without Mr. Altman in charge — is ready to carry the banner of the tech industry's rabid focus on artificial intelligence.

When he returned to OpenAI in November, Mr. Altman did not regain his seat on the board while agreeing to an investigation into his and the board's conduct. The two members who voted for his removal agreed to step down. Their replacements, outside the company, supervised the investigation conducted by the law firm WilmerHale. Brett Taylor, chairman of OpenAI, said during the press conference that the anticipated report on the episode had been completed, but the company had not published the report.

The law firm's report found that OpenAI's board acted within its broad discretion to terminate Mr. Altman, but also found that his conduct did not warrant removal, the company said.

“The special committee recommended, and the entire board expressed, full confidence in Mr. Altman and Mr. Brockman,” Taylor said, referring to Greg Brockman, the company’s president, who resigned in protest of Mr. Altman’s firing. “We are enthusiastic and unanimous in our support of Sam and Greg.”

OpenAI also moved to address concerns about a lack of diversity on the board by adding three women as directors: Sue Desmond-Hellman, former CEO of the Bill & Melinda Gates Foundation; Nicole Seligman, former general counsel of Sony; and Fidji Simo, CEO of Instacart.

Mr. Taylor, who was one of the replacements appointed to OpenAI's board in November, said the board would continue to expand.

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Through the report and additions to the board, OpenAI's leadership hoped to move beyond the controversy surrounding Mr. Altman's ouster. The incident raised countless questions about his leadership and the San Francisco company's unusual structure — a nonprofit board that oversees a for-profit company.

But since the report was not published, OpenAI left many questions unanswered about the company. Some insiders have questioned whether Mr. Altman had too much control over how the investigation was handled.

“As we told investigators, deception, manipulation, and resistance to comprehensive oversight must be unacceptable,” Helen Toner and Tasha McCauley, two OpenAI board members who left late last year, said in a statement. “We hope the new board will do its job of governing OpenAI and holding it accountable to the mission.”

Mr. Taylor appeared alongside Mr. Altman at the news conference on Friday. After announcing the new board members, he said the review found that the previous board had acted in good faith in removing Mr. Altman but had not anticipated the challenges that would arise from his removal.

“The review determined that the board’s decision did not arise from concerns about the safety or security of the product,” Mr Taylor said. “It was just a breakdown of trust between the board and Mr. Altman.”

After Mr. Taylor completed his prepared remarks, Mr. Altman praised the resilience of the company and its partners during and after his dismissal. “I'm glad this whole thing is over,” he said.

OpenAI provided a six-paragraph summary of the report. WilmerHale reviewed 30,000 documents and conducted dozens of interviews, including with former OpenAI board members, she said.

It found that the previous board was accurate in its justifications and public explanation for firing Mr. Altman because he had not been “consistently candid in his communications with the board.” It also said that the board did not anticipate that this action would destabilize the company.

Wilmer Hill provided oral briefings on the report, which will not be released publicly, to Mr. Taylor and Lawrence H. Summers, the former Treasury secretary who was also added to the board in November, the company said.

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Mr Taylor said OpenAI had made several changes aimed at improving the way the company was run, including new governance guidelines for the board, a new conflict of interest policy and a whistleblower hotline.

OpenAI's summary of the report did not provide insight into the concerns the company's senior leaders raised to the previous board about Mr. Altman. Before his firing, Ilya Sutskever, chief scientist at OpenAI, and Mira Moratti, chief technology officer at OpenAI, expressed concerns about Mr. Altman's management style, including what was described as his history of manipulative behavior, the New York Times reported.

Dr. Sutskever, through an attorney, called the allegations “false.” Ms. Moratti said in A Slack Post Company On Thursday she shared the same comments with the board that she made directly to Mr. Altman, but said she never reached out to the board to share those concerns.

“I’m glad the independent review is over and we can all move forward united,” Ms. Moratti said Friday in a post on X, formerly called Twitter.

OpenAI remains under investigation by the Securities and Exchange Commission over the board's actions and the possibility that Mr. Altman misled investors. Companies that hire outside law firms often turn over the report to public investigators after it is completed. A spokeswoman for OpenAI's board of directors declined to say whether the company would file the report with the SEC

(The New York Times sued OpenAI and Microsoft in December for copyright infringement on news content related to AI systems.)

OpenAI, which was valued at more than $80 billion in its latest funding round, is at the forefront of generative AI, technologies that can generate text, images and sounds. Many believe that generative AI could radically transform the technology industry just as the web browser did about three decades ago. Others worry that the technology could cause serious harm, helping to spread misinformation online, displacing countless jobs, and perhaps even threatening the future of humanity.

After OpenAI launched its online chatbot ChatGPT in late 2022, Mr. Altman became the face of the industry's push toward generative AI. About a year later, the board of directors unexpectedly fired him, saying it no longer had confidence in his ability to run the company.

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The board of directors has shrunk to six people: three founders and three independent members. Along with the three strangers, Dr. Sutskever, one of the founders of OpenAI, voted to remove Mr. Altman as CEO and chairman of the board, saying without providing details that he had not been “consistently honest in his communications.”

Mr. Brockman, another founder, resigned from the company in protest. Days later, Dr. Sutskever said he regretted his decision to fire Mr. Altman and effectively resigned from the board, leaving three independent members standing in opposition to Mr. Altman.

OpenAI was founded as a non-profit in 2015, before Mr. Altman set up a for-profit subsidiary three years later and raised $1 billion from Microsoft. The board of directors of the non-profit, whose stated mission was to build artificial intelligence for the benefit of humanity, retained full control of the new subsidiary. Investors, including Microsoft, had no legal say in who ran the company.

In an effort to resolve the turmoil and bring Mr. Altman back to the company, he and the board agreed to replace two members with Mr. Taylor, a former Salesforce executive. But Mr. Altman was not returned to the board. Mr. Taylor and Mr. Summers were charged with overseeing the investigation and dismissal of Mr. Altman.

Microsoft, a close partner of OpenAI, has an observer position on the board, which is held by Dee Templeton, the company's vice president of technology partnerships and research. Microsoft on Friday declined to comment on the board and the reporting.

The new board has faced criticism from corporate governance experts for its lack of diversity. Mr. Taylor told The Times in November that he would fill the slate by adding “qualified and diverse candidates” who embody “the full extent of what this mission stands for, which will include technology and AI safety policy.”

Karen Wise contributed reporting.