Sam Altman returns to OpenAI after agreement reached

Sam Altman is to return to OpenAI within days of his departure and the company appointing two interim CEOs during the period, OpenAI announced in a post on X.

“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,” OpenAI said in an update posted to the social media platform X, formerly known as Twitter.

Altman’s departure late last week from the AI startup because of a conflict with the board was the subject of much speculation, as the reasons weren’t clearly spelled out.

“I love OpenAI and have acted to preserve our team and mission. Joining Microsoft was the best decision for us, and with a new board and Satya’s support, I’m excited to return to OpenAI and strengthen our partnership with Microsoft,” Altman posted.

Initially, former Twitch CEO Emmet Shear was set to replace Altman.

“It’s clear that the process and communications around Sam’s removal has been handled very badly, which has seriously damaged our trust,” Shear said on Monday in a posted on X.

Before Shear took over the role of interim CEO at OpenAI, the company had appointed OpenAI CTO Mira Murati as the interim CEO on Friday. It’s unclear what role Shear or Murati would have in the company after Altman’s return. 

Altman’s firing sparked widespread disapproval in the tech community, drawing comparisons to Steve Jobs’ infamous dismissal and later successful return to Apple.

As many as 747 out of 770 OpenAI employees signed a letter threatening to quit and join Microsoft if Altman was not reinstated.

Altman and other key members, including Greg Brockman, were initially set to join Microsoft to lead a new AI research team, as announced by Microsoft CEO Satya Nadella, following their departure.

Microsoft is a large investor in OpenAI, and Nadella appeared pleased that Altman was rejoining the startup company.

“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,” Nadella posted on X. “We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners.”

The startup has a corporate structure that’s quite unusual by Silicon Valley standards.

OpenAI has been organized as a nonprofit since 2015 and is governed by a board overseeing all activities.

A 2019 thread on YCombinator’s Hacker News forum, written as the firm shifted to a hybrid structure of nonprofit and for-profit entities, sparked debate about its mission shift, profit motives, and the ethical complexities of AI development.

“Investor returns are capped at 100x, that’s quite a high cap for a non-profit,” wrote one user who had skepticism about OpenAI’s shift to a hybrid structure and its alignment with its original non-profit ethos. 

Reuters recently reported that some investors are considering suing the company over Altman’s firing; however, the firm’s unique structure potentially shields it from investor lawsuits, legal experts who spoke to Reuters said, and weakens their position in challenging the recent CEO dismissal.