It’s timelessly Shakesperean. It’s got the why dunnitness of a Christie novel. It has tech-sperts tweeting their speculative brains out. Until we get real details, or for a while after that, the intrigue will consume conspiracy theorists like a grassy knoll. Since you must know,… I’m going to tell you why OpenAI really dumped its CEO, Sam Altman.
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It's around midnight. This went down a few hours ago. How it’s played out explains life as we live it.
The first take on what shenanigans led to Sam’s split was sex. He must have committed an HR faux pas. Because that’s always the reason an executive is dismissed with no notice and scant details.
I think they’re off by miles on this one. Mainly because the Chairman and OpenAI co-founder, Greg Brockman demoted himself a few hours later. Unless this story was Caligula, we’re barking up the wrong tree. If it was a lesser HR offense, like, say, being un-nice, the press release would have been from the CEO and would have read more like the mea culpe by Uber founder, Travis Kalanick. “Admitting I’m an asshole is the first step in not being one.”
Sex off the table, we pivot to a god complex. A friend of mine and AI insider messaged me this gem about Sam, “He’s an evangelist, and he was starting to believe and speak, his own Gospel. Some of his recent comments were borderline psychotic.”
I’m not going to take this one off the table. Let’s just say mental instability could be an underlying causal issue.
But, I want more. Malfeasance. The dude stole money. Or took sides against the family. Yeah, that’s it. He went all Adam Neumann. Insider dealing. Outsider dealing. Double dealing. He owned a big piece of hu.ma.ne. Just today, the company launched a $699 bauble you wear like a Star Trek communicator and casts laser beams on your hand to remind you about appointments. No joke. Best slide deck I’ve seen in ages.
Now, let’s say, hu.ma.ne hits it big. In March they were worth $800M. They could be a unicorn. Sam could be a rich dude. But Sam is already a rich dude. He’s worth more than $500M. Plus, many CEOs have investments in non-competitive startups and don’t get fired.
OpenAI just had a developer day. Sam led and, by most accounts, rocked it. The stage was more about repackaging recent features into shiny wrappers. In fact, those shiny wrappers scared the heck out all the startups that made shiny wrapper apps around OpenAI. A few days earlier, there were rumblings that Open’s latest large language model didn’t really work.
But, you don’t fire the CEO who took a company from nothing to $100B in five years due to a product failure. And, this was barely a setback. Besides, Open promoted their CTO to interim CEO. So, no, it’s not a tech issue.
No. It’s bigger. And more nefarious. As more details came to light, we could ignore obvious strawman arguments. First, as big as this firing was, OpenAI only told Microsoft one minute before the press release. One minute. The board learned something, decided Sam had to go, and that he had to go away FAST.
While Open is a worth $100B, this isn’t fraud in the Enron sense. There’s no point in cooking books in a private company that’s burning money despite being on pace to generate $1.3B this year.
That said, I think that number seems high. We use AI quite a bit. We pay about seven bucks per month. Open AI would need 15 million customers to do what we do every month. Two days ago, in a press release, Altman said, “92% of Fortune 500 companies are building on ChatGPT” and that the company has 100 million weekly active users.
Even if Sam went rogue. Even if all those number are inflated, it’s not a reason to fire the CEO. Google lies. Meta lies. Volkswagen lies. Tobacco companies. J&J lies about talc. Asbestos lies. Lie now, pay later.
That’s not it. But we’re getting close. Trust. Massive differences of opinion. Fissures in the direction.
I’m going to tell a story. One I lived through and know well. Our venture fund invested in early-stage companies. If we were lucky, we’d sell them for more than we put in. If we were really lucky, they company would go public. We’d look smart to our investors and to more founders, and we’d make lots of money. One of our public companies had a CEO who kept telling the board he had a huge deal pending with a major media company. Multiple board meetings passed and the deal still hadn’t closed. He was spending money like a drunken entrepreneur backed by big VCs on shore leave. The Chairman called a senior friend at the “major media company” to learn that the deal had died “months ago.” The Chairman called an emergency board meeting and fired the CEO. The press release eluded to “lack of candor.” Because that’s what lawyers advised.
I thought about this story today. A lot. The press release read, “The board lost confidence in his [Sam’s] ability to lead OpenAI effectively.”
What is the company and who is the board. Well…
OpenAI isn’t one company, it’s two. It’s a riddle wrapped in an enigma. The not-for-profit OpenAI owns the only share of the for-profit OpenAI Global LLC. What the actual complexity, Batman. The not-for-profit raised $1B to create a general AI to do good.
Think of OpenAI as an Oreo. It has a dark cookie part trying to do go around a creamy white middle trying to make money. It gives rise to conflict. For-profit. Not-for-profit. Evil. Good. Figuratively, two sides.
The board lost confidence. The board is about good. Who is the board?
The scientist who figured this out. The guy who co-founded Quora. The lady married to Joseph Gordon-Levitt. And, a lady who is Director of Strategy and Foundational Research Grants at Georgetown University's Center for Security and Emerging Technology (CSET).
Odd for a company of this size not to have VCs on the board. Not to have Microsoft on the board. Especially, after the latter plonked down $10B to be involved with the tech.
Sam came from Y Combinator. Startups of the YC caliber talk about doing good TO make money. Sam wasn’t just a YC guy. He was the President of YC – well, until he left under suspicious reasons.
I promised you the reason why Open really dumped Sam. Here it is. I grew up in the 80s. I watched Alex P. Keaton and Gordon Gecko put money over everything else. Alex’s parents and Bud Fox were meant to be their conscience. Alex turned out ok. Greed-is-good Gecko went to jail because Bud wasn’t much better. We’ve woken up to a different world now. People want to do good. Or, believe that they are doing good or can.
Sex is bad. Being an asshole is bad. Wanting money is bad. I have a feeling we’re going to learn that Sam was ok building tech that scaled those and other human imperfections. TO MAKE MONEY. He committed today’s worst sin. And, the board didn’t like that.
How peolple have speculated on why Sam is out out explains life as we live it.
