Getting Fired and Hired In 3 Days
The curious case of Sam ‘Outman’
10 MINS READ
Hello,
In issue #23, on how ChatGPT works, I complained about how the power outage in my area screwed me up.
Well, when power came back on Sunday night, I fed my devices several volts of energy and then logged into X.
What I saw felt like the Rapture had happened and I had slept through it.
OpenAI’s CEO Sam Altman had been surprisedly sacked on Friday. Microsoft was renegotiating his return. Greg Brockman (Co-founder and President) had resigned.
X was more upbeat than the Super Bowl.
Some called it a coup. Some called it a skirmish.
Sunday evening, the board had named Emmett Shear as interim CEO. By Monday morning, Microsoft CEO Satya Nadella had announced that he had hired Sam and Greg to lead an advanced AI research lab within Microsoft.
It was so exciting that I have to confess, I spent more time ON my phone than off it from 11PM on Sunday to 2AM on Tuesday.
Didn’t sleep through that night.
And the day.
Phew.
Saw more speculative + investigative threads in one day than possibly all my life. Lol.
In today’s issue, I’ll bring the whirlwind of events that have occurred at the world’s most powerful AI company to you.
I have followed the news as they happened, so you don’t have to.
All you have to do is to slurp on a straw with your inbox open.
This account will not be exhaustive. I am sorry, but if I am the one writing to you, I have to choose what bits and bolts of our story are more important.
I won’t be over-simplistic too. Brief, summaries wring out the delicious details from tawny tales like this.
We’ll set our butts as comfortably as we can between the two spikes of minimalism and maximalism.
Cool?
Historian Tacitus said history is the story of the greatest people. Another said history is rather the story of the greatest events.
Well, according to non-historian PaulMaah, history is the story of the greatest people involved in the greatest events.
I don’t know if anyone has said it before me. The idea is so simple that, I’d be genuinely shocked if no one has.
OpenAI’s recent drama is as interesting as a Hollywood script today. But tomorrow, it’d be the basis of someone’s boring class.
An account like this is an example of contemporary history, shaped by what may become our greatest events and actors.
Well, imagine watching a movie from 0:00 to the credits scene and not having an idea about the characters.
Our story will be as boring as that if we don’t get to know these human actors.
So, foolish assumptions1
Sam Altman is the former soft-spoken CEO of OpenAI. He was heading startup accelerator, Y Combinator before co-founding the AI research lab with Elon Musk, Reid Hoffman and others in 2015 and becoming CEO in 2019.
Greg Brockman is a co-founder and the former President and chairman of OpenAI.
Ilya Sutskever is a machine learning researcher that sits on the board of OpenAI.
OpenAI is an American research org founded with the mission of creating artificial general intelligence (AGI) in a safe way.
Other relevant actor names will drop in our story.
Lay back. This might be a long read and you don’t want to have backache from bad reading posture. Lol.
Let’s shoot.
The Genesis
Winter ice was thawing. Research had started seeing more success than ever before. Real AI applications were being used by millions of people already.
Faith in the possibility of engineering human-level intelligence was slowly been restored. The curtain of shame, sewn from the era of doomed predictions, that glued lips was being drawn back.
AGI was back on the lips and tables of tech execs and researchers, the people who, more than anyone else in the world, had the capital to make it reality.
At this time, Big Tech was locked in its characteristic bullfight to build the Next Big Thing.
AI was a serious candidate.
They were aggressively hand-picking brains from academia, buying startups and building fat-salaried AI teams.
A small group of tech people thought it’d be dangerous for such powerful tech to be developed and controlled by executives who were only motivated by the desire to increase their market share.
That’s why Elon Musk, Sam Altman, Greg Brockman, Ilya Sutskever and 9 others … teamed up.
Musk served as an initial board member until he left in 2018 due to a “potential future conflict [of interest]” between his AI pursuits at electric vehicle manufacturer, Tesla and the research company.
(I talked about Elon Musk’s departure in X Marks the Spot)
How to morph a company
OpenAI was founded as a non-profit research firm to develop AI safely and share; OpenAI, Inc.
They planned to change the world by making sure the most important tech ever built was not siloed by one company. And by making the company a non-profit, the team would not have to put money above its virtuous goal.
The more people that could develop AI applications using OpenAI products, the better for the world.
The vision was grand and utopic.
Well, Sam Altman knew that they needed more than a vision to change the world.
They needed money.
The money guy …
Sam Altman is a Silicon Valley archetype. He founded a social network service that raised $30 million in venture capital when he was 20. After selling Loopt, Paul Graham named the youngster as his replacement as head of Y Combinator.
Y Combinator is a support pad for startups. They give valuable advice and access to capital to the startups under their belt in exchange for equity. Altman also made his little investments and became rich.
His time at Y Combinator had strengthened his skillset: top-tier people skills from having to deal with high-stress, ambitious founders, teams and shareholders, and a knack for raising money.
At OpenAI, Altman set to solve the funding ache.
He had said he planned to spend a billion dollars in five years and that to achieve AGI, he might have to raise more capital than any non-profit had ever done.
He succeeded in securing $1 billion, then an additional multi-year $10 billion investment in January 2023 from Microsoft in exchange for a rumored 49% stake in the company.
This was a twist.
Unlike other tech giants, Microsoft had been rather slow getting its mark on the racetrack. OpenAI was one of its best bets to winning the race either way.
It seemed OpenAI under Altman no longer saw a big tech company as the enemy.
Well, the company’s approach and the size of its purse weren’t the only things that changed.
Its entire structure was about to transform into a form that confused people and especially infuriated co-founder Elon Musk.
How did it tangle?2
It happened that although OpenAI was registered as a “not-for-profit” in 2015, Sam Altman managed to incorporate a for-profit subsidiary, OpenAI Global LLC in 2019.
In this ‘tangled’ structure, the non-profit OpenAI, Inc was the sole controlling shareholder of the for-profit arm.
Majority of OpenAI, Inc’s board can’t have shares in OpenAI Global LLC. Also, minority board members who have a stake in OpenAI Global LLC can’t vote on particular issues.
Altman turned a not-for-profit into a “capped” for-profit.
This means, hey you can invest here, but you can’t take profit above a certain level.
For OpenAI, the cap or limit is 100 times any investment.
So, even if my investment accrues 105%, I can only have 100.
Period.
Hero days
Altman [is] … generative AI's … icon
December 2022 was a crowning time. OpenAI released ChatGPT and it took the world by storm.
Over a million users in five days. Over 100 million today.
Altman was catapulted to global recognition.
Microsoft embedded OpenAI tech in it’s Bing search engine. It was a lease of new life. We could now find answers instead of pages of options.
Google nearly pissed in its pants. Search was everything to it. Google CEO, Sundar Pichai couldn’t watch this happen.
So, they scrambled to launch Bard, an “AI experiment”.
There was a movement for generative AI pulsing and surging and the 38-year-old Stanford dropout was its unofficial icon.
OK, give me the REAL gist
OpenAI’s board (consisting Ilya Sutskever, Quora CEO, Adam D’Angelo, Tasha McCauley and Helen Toner) unceremoniously and abruptedly ousted Sam Altman over Google Meet.
They said Altman was hiding information and so they had lost confidence in his ability to continue to lead.
Chief Technology Officer, Mira Murati (who had also worked at Elon Musk's Tesla) took over as interim CEO.
Greg Brockman, the president of OpenAI was removed as chairman. He resigned in protest and over 700 of the 770 OpenAI employees signed a letter threatening to quit and join Altman if he was not restated.
The board later named Twitch CEO, Emmett Shear as interim CEO, a title he still holds even as the waters don’t seem like they are calming soon enough.
We also heard that the board even asked former OpenAI employee who spawned a competitor AI firm, Anthropic CEO Dario Amodei to merge Anthropic with OpenAI and replace Altman.
Amodei wouldn’t budge.
Microsoft waded in to renegotiate Altman’s reinstatement. If OpenAI was lost in a managerial chaos, so will it’s $11B investment (not counting possible future ROI).
Board was adamant. So, Nadella, Microsoft’s CEO announced on X that Altman would lead an advanced AI research team with Greg Brockman.
Some reporters said Ilya Sutskever was “instrumental” to Altman’s sack. But Sutskever co-signed the open letter to the board threatening to quit. I don’t know who to believe anymore.
Meanwhile, Microsoft is warming up its embrace for a potential mass influx of OpenAI employees, in what I’d call The Exodus if it happens.
How do I know this? Microsoft CTO said it’ll pay any OpenAI employees who transit, the same as they were paid at OpenAI.
Well, it seems Altman’s only using the Microsoft spot as a sofa. He’s still in talks with the board for a reinstatement.
Simple: Altman wants to continue his work.
At OpenAI.
My questions and takes:
There were six people on the board. Minus Altman and Brockman, that’d be four. What made these four, act so quickly and decisively?
Was the board afraid of Altman’s aggressive pursuing of AGI?
Was it about ChatGPT’s recent problems?
Why is everyone at the board hush about what Altman REALLY did?
Two weeks ago, Altman was one of 100 global delegates at the world’s first AI summit. And on Nov. 6, he hosted OpenAI’s first developer conference. Everything was chill. He didn’t see this coming.
Is Musk gloating?
Since Sutskever has now sided with Altman, can the last three face the immense pressure?
If Altman is stuck at Microsoft, I think Nadella would give Altman some degree of independence. Like, GitHub and LinkedIn.
The hyper speed rate of developments was captured succinctly. On X. Every twitch (pun not intended), every sigh, every cough. Traditional media just gave us glossed retellings of what we already knew afterwards.
In other words, X showed it is the most up-to-date news engine on this blue planet. (Would have hit better if the logo was still blue).
We’re still watching as events continue to unfold.
This year has got to be the most eventful tech year in years.
Big announcements. Four big CEOs leaving.
Sam Altman with office politics. Former CEO of crypto exchange FTX, Sam Bankman-Fried being convicted for fraud. Kyle Vogt of self-driving car maker, Cruise has quit. And more recently. Binance CEO Changpeng Zhao (CZ), admitting to anti-money laundering charges and stepping down.
And I want to go to bed rn.
*yawns like a robot*
Prompt of the Day: Speech Writer
Copy and paste this into ChatGPT:
Write me a 1000 word speech about [TOPIC] in the style of [FAMOUS ORATOR]. Place emphasis on [EMPHASIS]Tool of the Day
Summarify summarises everything. Including YouTube videos and webpages.
Did You Know?
Amidst the noise at OpenAI, Meta dissolved it's Responsible AI team.
Image of the Day
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emmanuelpaulmaah.substack.comThanks for reading.
Until tomorrow,
Enjoy your day.
With love and ink,
Emmanuel
I had wanted to place this section in a footnote but decided against it. I felt it’d be easier for you to skip this section and read on if it was unnecessary. Let’s face it: footnotes can be clumsy. Funny that THIS is a footnote
Skip if you hate corporate-speak.