Altman expressed relief over investigation closure, admits handling dispute with former board member could have been better
Sam Altman, CEO and co-founder of OpenAI, has been reinstated to the company’s board of directors after an external investigation. The investigation, conducted by the law firm WilmerHale, found that Altman’s removal was due to a breakdown in his relationship with the prior board, rather than his conduct, and that his conduct did not warrant removal.
For over three months, OpenAI remained mostly silent about the reasons behind the firing of its then-board of directors on November 17. In a statement, the board criticized Altman for lacking consistency in his communications and stated that they had lost confidence in his leadership abilities. However, less than a week later, Altman was reinstated as CEO after significant internal pressure, including threats of resignation from many employees, including board chair Greg Brockman, who resigned from his position as the company’s president in response to Altman’s ouster.
In addition to disclosing the investigation findings, the maker of ChatGPT has appointed three women to its board of directors: Sue Desmond-Hellman, former CEO of the Bill & Melinda Gates Foundation; Nicole Seligman, former Sony general counsel; and Fidji Simo, CEO of Instacart.
These actions signal OpenAI’s efforts to move past the internal conflicts that nearly caused its downfall last year, garnering global attention. Much of the company’s conflicts stem from its unique governance structure. Originally established as a non-profit with a goal of developing AI for the benefit of humanity, it has evolved into a rapidly growing commercial entity still governed by a non-profit board committed to its original mission.
A New York Times investigation, released on Thursday, highlighted the internal dynamics at OpenAI prior to Altman’s removal. The report indicated that the company’s chief technology officer, Mira Murati, had questioned Altman’s management approach. Additionally, Ilya Sutskever, co-founder and chief scientist at OpenAI, reportedly expressed concerns about Altman’s alleged “history of manipulative behavior.”
Altman indirectly referenced these allegations during a call with reporters on Friday, expressing disappointment at the leaking of information intended to sow discord within the team. He acknowledged the learning experience from this situation and apologized for a disagreement with a former board member, acknowledging that he could have handled it “with more grace and care.”
“I’m relieved this ordeal is finally over,” he said.
The investigation concluded that the prior board had acted within its authority. However, it also stated that Altman’s “conduct did not warrant removal,” according to OpenAI. The organization affirmed that both Altman and Brockman were still the right leaders for the company.
“The review found there was a significant breakdown in trust between the prior board and Sam and Greg,” Bret Taylor, the board’s chair, told reporters on Friday. “It also concluded that the board acted in good faith, believing at the time that its actions would address some of the perceived challenges and did not foresee the resulting instability.”
Following his unexpected removal, Altman, along with his supporters—backed by the majority of OpenAI’s staff and Microsoft, a close business partner—orchestrated a comeback. This reinstated Altman and Brockman to their executive positions and led to the departure of board members Tasha McCauley, Helen Toner, and Ilya Sutskever, although the latter retained his position as chief scientist.
Altman and Brockman did not immediately regain their board positions. Instead, an “interim” board of three men was established, with Bret Taylor, a former executive at Salesforce and Facebook who previously chaired Twitter’s board before Elon Musk’s tenure, leading the group. The other members were former US Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo, the sole member from the prior board to retain his position.
OpenAI had enlisted the law firm WilmerHale to investigate the circumstances surrounding Altman’s removal. Throughout the investigation, WilmerHale conducted numerous interviews with the former board, current executives, advisors, and other witnesses. The firm also reviewed thousands of documents and corporate actions.
The board announced plans to enhance the company’s governance structure. This includes adopting new corporate governance guidelines, reinforcing policies on conflicts of interest, establishing a whistleblower hotline for anonymous reporting by employees and contractors, and creating additional board committees.
The company faces additional challenges, notably a lawsuit filed by billionaire Elon Musk, who provided early financial support to OpenAI and served as co-chair of its board since its founding in 2015. Musk contends that the company is straying from its original mission in favor of profit.
Legal experts question the validity of Musk’s claims, which center on an alleged breach of contract.
Nonetheless, the lawsuit has highlighted the company’s internal struggles regarding its unique governance model, the level of transparency it should maintain regarding its research, and its pursuit of artificial general intelligence (AGI)—AI systems capable of performing as well as or better than humans in various tasks.
OpenAI and Microsoft are also facing lawsuits from several news outlets, including the New York Times, the Intercept, AlertNet, and Raw Story, alleging that their generative AI products have infringed on copyright laws.
