When Sam Altman and Elon Musk Created OpenAI Inc., and What the CEO and Board of the OpenAI Initiative Can Say About It
First, it’s important to remember that OpenAI was founded by Altman and Elon Musk to fulfill a mission. “The organization is trying to develop a human positive AI. And because it’s a nonprofit, it will be owned by the world,” Altman told me in December 2015, just before the project was revealed to the world.
“We have an incredibly great team here that can do a lot of things, so mostly, I defer to them,” he told me in May when I asked him how the company ran in his absence. There are some things only a CEO can do, like HR, or something with a major partner. Those items would accumulate on his phone and at the end of the day he’d bat out responses. Then he would go back to speechifying, meeting developers, and taking tea with prime ministers.
Altman’s firing caught investors off guard, including prominent firms such as Khosla Ventures, which has a significant stake in OpenAI, as well as Andreessen Horowitz and Sequoia Capital, which have smaller slices of shares, according to two people familiar with the matter not authorized to speak to media about the startup. Spokespeople for Khosla, Sequoia, and Andreessen declined to comment.
An attempt to restore Altman as CEO and replace the board ran into difficulty Sunday over the role of existing directors in choosing their replacements, Bloomberg reported.
The 11-page bylaws OpenAI Inc. established in January 2016 give board members the exclusive right to elect and remove fellow directors and also to determine the board’s size. The rules also say that a majority of the board can take any action without prior notice or a formal meeting, as long as a majority of board members provide written consent.
Openai has been at odds with the corporate structure of Air Street Capital and their need to support cutting-edge research through huge amounts of equity investment. “It was an experiment to defy the laws of corporate physics, and it appears that physics won out,” he says.
When Sam Altman, Elon Musk, and other investors formed the startup behind ChatGPT as a US not-for-profit organization in 2015, Altman told Vanity Fair he had very little experience with nonprofits. “So I’m just not sure how it’s going to go,” he said.