Sam Altman Back as OpenAI CEO amid Board Restructuring

There has been a frenzied drama at ChatGPT’s parent company OpenAI and after the board unceremoniously fired CEO Sam Altman it bought him back as the CEO within a week.

In a post on X (formerly Twitter), OpenAI said, “We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new initial board of Bret Taylor (Chair), Larry Summers, and Adam D’Angelo. We are collaborating to figure out the details. Thank you so much for your patience through this.”

Notably, while Taylor is the former co-CEO of Salesforce, Summers is a former US Treasury Secretary. Adam D’Angelo, co-founder and CEO of Quora would retain his position on the board.

Altman back as OpenAI CEO

Altman wrote on X, “i love openai, and everything i’ve done over the past few days has been in service of keeping this team and its mission together. when i decided to join msft on sun evening, it was clear that was the best path for me and the team. with the new board and w satya’s support, i’m looking forward to returning to openai, and building on our strong partnership with msft.”

Notably, after OpenAI’s board ousted Nadella, Microsoft announced that he would head the company’s AI operations.

Why did the OpenAI board remove Altman?

Altman’s departure, OpenAI’s board said, “Mr. Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI.”

The board initially appointed chief technology officer Mira Murati as the interim CEO but shortly said that former Twitch CEO Emmett Shear would take over as the CEO.

Notably, after Altman’s ouster there were reports that multiple OpenAI employees had threatened to resign and join Microsoft.

OpenAI employees threatened to resign

The letter said, “We are unable to work for or with people that lack competence, judgement and care for our mission and employees. We, the undersigned, may choose to resign from OpenAI and join the newly announced Microsoft subsidiary run by Sam Altman and Greg Brockman. Microsoft has assured us that there are positions for all OpenAI employees at this new subsidiary should we choose to join. We will take this step imminently, unless all current board members resign, and the board appoints two new lead independent directors, such as Bret Taylor and Will Hurd, and reinstates Sam Altman and Greg Brockman.”

Satya Nadella’s reaction to Altman rejoining OpenAI

Microsoft is among the investors of OpenAI and earlier this year announced a multibillion-dollar investment spread across multiple years. Reacting to Altman returning as OpenAI’s CEO, Microsoft’s CEO Satya Nadela said on X, “We are encouraged by the changes to the OpenAI board. We believe this is a first essential step on a path to more stable, well-informed, and effective governance. Sam, Greg, and I have talked and agreed they have a key role to play along with the OAI leadership team in ensuring OAI continues to thrive and build on its mission. We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners.”

Markets were in shock after the OpenAI board fired Altman

Markets were shocked by the OpenAI board’s decision to fire Altman and many drew parallels with Steve Jobs who was fired by Apple’s board but later returned to take the company to new highs.

Venture capitalist and startup investor Ron Conway said, “What happened at OpenAI today is a Board coup that we have not seen the likes of since 1985 when the then-Apple board pushed out Steve Jobs. It is shocking; it is irresponsible; and it does not do right by Sam & Greg or all the builders in OpenAI.”

AI war is heating up

The AI war has been heating up and tech giants like Microsoft, Amazon, and Alphabet are investing in the technology to gain an upper hand over rivals. There is also an AI war between the US and China and the former has banned the exports of several high-end chips to China on fears that they might be used in military technologies.

Meanwhile, through its investment and association with OpenAI, Microsoft seems to be having an upper hand over some of its peers. Markets have also been appreciative of Microsoft’s AI foray and it hit a record high after announcing that Altman would head its AI team.

Notably, optimism over AI has been a key driver of the rally in tech stocks this year with Nvidia emerging as a key beneficiary. The stock has risen over 240% this year and is the best-performing stock of the S&P 500 index.

Nvidia’s earnings show AI euphoria is far from over

Even as some have been skeptical about the AI euphoria, Nvidia’s fiscal Q3 2024 earnings show that the boom is far from over. Nvidia’s revenues more than tripled to $18.12 billion in the quarter which was ahead of Wall Street estimates as well as its own guidance. The per-share earnings of $4.02 were also higher than the $3.37 that analysts were expecting.

It guided for revenues of $20 billion in the fiscal fourth quarter which was again higher than what analysts were modelling.

Coming back to the OpenAI saga we have witnessed a sort of coup with Microsoft and Altman looking like winners. Notably, Thrive partner Kelly Sim told the Verge that “OpenAI has the potential to be one of the most consequential companies in the history of computing.”

Sim added, “Sam and Greg possess a profound commitment to the company’s integrity, and an unmatched ability to inspire and lead. We couldn’t be more excited for them to come back to the company they founded and helped build into what it is today.”

Meanwhile, Microsoft stock is trading slightly higher in US premarket price action today as markets digest the Altman saga as well as Nvidia’s earnings.