OpenAI employees threaten Microsoft with a mass walkout, demand the resignation of the board

Almost all of OpenAI's employees have threatened to leave and follow ousted leader Sam Altman to work for the company's biggest investor, Microsoft, unless the current board steps down, leaving the future of the high-profile artificial intelligence startup increasingly uncertain.

More than 700 of the artificial intelligence firm's roughly 770 employees signed a letter to OpenAI's board on Monday, saying the signatories cannot work with people who lack competence, judgment and care for our mission and employees. The letter called for all board members to resign and Altman to be reinstated, or the employees could move to Microsoft. The software giant “has assured us that there are positions available for all OpenAI employees,” the letter said.

The unusual threat of a mass exodus followed a rollercoaster weekend in which OpenAI's board resisted calls from investors and executives to bring back Altman, who was fired over disagreements with the board over how quickly to develop and monetize artificial intelligence. OpenAI executives — including then-CEO Mira Murat, chief operating officer Brad Lightcap and chief strategy officer Jason Kwon — were in talks with the board to bring Altman back to the company as of Sunday evening, according to a source familiar with the discussions who made the request. Anonymity refers to personal information. Instead, the board named a new leader — former Twitch CEO Emmett Shear — and Microsoft hired Altman and OpenAI co-founder Greg Brockman to head up a new in-house AI team.

The chaos inside OpenAI could change the world of artificial intelligence. OpenAI started the global buzz around generative artificial intelligence with the release of its wildly popular chatbot ChatGPT a year ago. With Altman at the helm, OpenAI has been at the center of the tech industry's efforts to bring the technology to business and consumers — and to work with regulators on AI's guardrails. But the tension at OpenAI raises new questions about whether AI startups can balance responsible AI development with the need to raise large amounts of capital from investors to support the expensive computing infrastructure needed to build these tools.

OpenAI's turmoil could also lead to other tech companies racing to find highly competitive AI talent. Salesforce CEO Marc Benioff on Monday offered to immediately hire researchers who are leaving their positions at OpenAI. Salesforce will provide appropriate compensation to any researchers who leave OpenAI, Benioff said in a post on X.

Among the many employees and executives who signed the letter were Murat, OpenAI's chief technology officer, who was named acting CEO on Friday, and Ilya Sutzkever, OpenAI's co-founder and board member, who is seen as instrumental in the board's actions. (Previously reported on staff letter.)

“I deeply regret my involvement in the board's actions,” Sutzkever wrote on X, formerly Twitter, in a post on Monday. “I never intended to harm OpenAI. I love everything we've built together and will do everything I can to bring the company together.”

Altman clashed with his board members, particularly Sutskever, the company's chief scientist, over how fast generative AI should be developed, how to commercialize the products, and what steps were needed to minimize their potential harm to society. Other OpenAI board members included Adam D'Angelo, co-founder and CEO of Quora; GeoSim Systems CEO Tasha McCall; and Helen Toner, director of strategy and fundamental research grants at Georgetown's Center for Security and Emerging Technologies.

In addition to rifts over strategy, board members also grappled with Altman's entrepreneurial ambitions. Altman sought to raise tens of billions of dollars from Middle Eastern sovereign wealth funds to build an AI chip startup that would compete with processors made by Nvidia Corp., according to a person with knowledge of the investment proposal. Altman was asking SoftBank Group Corp. Chairman Masayoshi Son for a multibillion-dollar investment in a new business to develop artificial intelligence-driven hardware in partnership with former Apple designer Jony Ivey.

Altman's ouster from the co-founded company also leaves OpenAI and its employees with few immediate strangers. Thrive Capital was expected to lead the employee share offering, a deal that valued OpenAI at $86 billion (roughly Rs 7,16,735 crore). As of this weekend, the firm had yet to receive the money, and it told OpenAI that Altman's departure would affect its operations.

Some investors were considering writing down the value of their OpenAI holdings to zero, according to a person familiar with the discussions. The potential move, which would make it more difficult for the company to raise additional funds, appeared to be aimed at pressuring the board to resign and bring Altman back.

Also in the balance was a second tender planned for early 2024, which would give early-stage investors a chance to get some liquidity on their shares, the people said. As recently as last week, OpenAI's private equity blocks were being offered, valuing OpenAI at over $100 billion (approx. 8,33,413 crore). That market dried up Friday after news broke that Altman had been fired by the board, leaving hundreds of millions of dollars in private transactions pending.

Altman's firing came as a surprise to OpenAI employees, the letter said, as it did to Microsoft. A coalition of powerful investors, company leaders and the world's largest software company tried unsuccessfully over the weekend to reinstate Altman.

Late Sunday, the company's four-member board appointed Shear, the co-founder and former CEO of game streaming website Twitch, to replace him. Shir, who became OpenAI's second acting CEO in three days, won over directors because of his past recognition of the dangers AI poses, said a person familiar with the matter, who asked to remain anonymous to discuss personal matters.

Shear is a well-known technologist and computer scientist who has long advocated a more cautious approach to artificial intelligence. He prioritized X's first 30 days in office, promising to reform the leadership team and hire an independent investigator to look into the circumstances of Altman's firing. Apparently, that wasn't enough for the staff to issue an ultimatum to the board. Shear did not immediately respond to a request for comment.

Before the letter was published, many OpenAI employees posted identical messages on X: “OpenAI is nothing without its people.” Altman responded to several of them with a heart emoji.

“We have more unity, commitment and focus than ever before,” Altman wrote on X Monday. “We're all going to work together in one way or another and I'm really excited. One team, one mission.”

© 2023 Bloomberg LP

Affiliate links may be generated automatically – see our ethics statement for details.