How Silicon Valley reunited Sam Altman and OpenAI – Financial Times

When OpenAI announced Sam Altman’s return to the helm on Tuesday evening, an impromptu party broke out at the company’s San Francisco offices.

As employees celebrated the reinstatement of the co-founder, who had been dramatically fired just four days earlier, the company’s investors and other tech leaders rushed to offer their support to Altman, and a flood of heart emojis swept across the social media site X

“Congratulations to OpenAI! Nice to see the good guys win!” wrote Salesforce founder Marc Benioff. He was one of several influential figures in Silicon Valley’s tight-knit tech scene to offer public support, even as he tried to poach OpenAI’s employees early in the crisis with an offer to equalize their salaries.

Altman’s return was the culmination of days of frantic efforts by employees, donors and high-profile Silicon Valley figures, conducted largely remotely, to convince a determined board that they had made a catastrophic mistake in firing the 38-year-old .

According to several people with direct knowledge of the discussions, a mass uprising by OpenAI employees was the main reason for the board’s about-face. Many had expected Altman to return to the company on Sunday, encouraged by her former boss’s appearance in the office.

Altman made it clear that his reinstatement would require a shakeup by the board, which had removed him days earlier for a lack of “consistent candor.” They included Ilya Sutskever, a co-founder whose work focused on artificial intelligence research; Adam D’Angelo, CEO of question-and-answer service Quora; technology entrepreneur Tasha McCauley; and Helen Toner of the Center for Security and Emerging Technology at Georgetown University.

The directors initially stood firm and appointed Emmett Shear, the co-founder of the video streaming service Twitch, as interim boss on Sunday evening.

When Sutskever invited his employees to an all-staff meeting to welcome the new boss through the company’s internal messaging system, he received a stream of middle finger emojis in response, according to two people familiar with the messages.

“The majority of people who were in the building at the time left the building,” one of the people said.

Altman immediately confirmed that he and Greg Brockman, another co-founder who left on Friday, would be joining Microsoft, OpenAI’s key partner. Former colleagues have an open door to follow and join a new AI unit, said Microsoft boss Satya Nadella.

By Monday morning, the threat of an exodus from OpenAI was clear: More than 500 of the company’s 770 employees — including Sutskever — put their names in a letter calling on the board to resign and reinstate Altman. As of Tuesday evening, all but 20 people on OpenAI’s payroll had signed.

The staff effort to bring Altman back was led by a trio of remaining senior executives — Mira Murati, Brad Lightcap and Jason Kwon.

At the same time, OpenAI’s venture capitalists had swung into action, promising Altman public support whatever he did next.

Privately, investors and company executives pressed the board for more details about what led to Altman’s firing, beyond the cryptic statement that suggested he had not always been open. According to several people with knowledge of these conversations, no further details were provided.

According to venture capitalist Vinod Khosla, an early OpenAI supporter, Sutskever had expressed concerns about the rapid advancement of generative AI capabilities.

However, a person with direct knowledge of the negotiations with Altman said the board’s decision was not based on concerns about the company’s research progress or any kind of wrongdoing. Rather, it reflects a loss of trust between the board and Altman stemming from multiple instances of cover-up, they said.

Ilya SutskewerIlya Sutskever, co-founder of OpenAI, had expressed concerns about the rapid advancement of generative AI capabilities © AFP/Getty Images

Some investors felt the company — and with it their prospects for billions of dollars in investment returns — were in jeopardy and began exploring legal action, according to two people familiar with their thinking. One question was how to sue a board whose duty, according to OpenAI’s charter, is the safety of all humanity and not that of investors.

Still, “the threat of litigation was taken seriously,” said an employee at a venture firm investing in OpenAI. “The company didn’t want that. It helped them come to the table and try to find a real solution here. Things got serious.”

Those who sided with Altman included Airbnb founder Brian Chesky, prominent venture capitalist Ron Conway and former Salesforce executive Bret Taylor, according to people with knowledge of the situation. Taylor has since been named chairman of the new board.

While Sutskever switched sides, the three remaining board members – D’Angelo, Toner and McCauley – worked together to negotiate OpenAI’s future as a unified team, according to a person close to their thinking.

Before Shear’s appointment was announced on Sunday, board members had been exploring alternative options for the chief executive position. One name discussed was Dario Amodei, a former OpenAI employee who left the company to start rival company Anthropic, according to a person familiar with the discussions.

The prospect of Amodei rejoining OpenAI or a possible merger of the companies was raised, but discussions did not advance beyond preliminary stages, the person said. A person with knowledge of the board’s position denied over the weekend that the board had approached Anthropic to discuss a deal.

Anthropic declined to comment.

The board has always found itself on the losing side of the public dispute that raged over the future of OpenAI. Altman’s “superpower is getting people on his side, shaping narratives and shaping situations into the form that works for him,” said a person with direct knowledge of the negotiations between Altman and the OpenAI board.

The board “likely underestimated the strength of Altman’s “public relations campaign” and was also likely “legally constrained by what he could or would say,” said another person who has worked with two board members. A person with direct knowledge of the board’s position confirmed that it was subject to legal restrictions during negotiations.

On Tuesday, as the U.S. Thanksgiving holiday approached, discussions among a small core group — which included Altman, flanked by his longtime friend Chesky, other OpenAI leaders and the board — entered its fifth day.

D’Angelo, Toner and McCauley negotiated together, according to two people familiar with the matter, securing an independent investigation into last week’s events and assurances that Altman would not rejoin OpenAI’s board.

Shear also played a key role in the talks, one person said.

A sticking point was the composition of the new board. Aside from the remaining directors’ eagerness to ensure Altman wasn’t there, the CEO’s backers recognized that it was important to select people the investment community would take seriously but who would be viewed as sufficiently independent, one person said Knowledge of the conversations.

OpenAI announced Tuesday that D’Angelo, Salesforce’s Taylor and former U.S. Treasury Secretary Larry Summers will serve on the new board.

Selecting a third person – Summers in the end – was particularly difficult, a person familiar with the talks said, and a long list of potential candidates was floated as options.

The two people who left the board, McCauley and Toner, were both AI security experts who were considered relative outsiders, while remaining director D’Angelo is an established figure in Silicon Valley.

Shortly after 10 p.m. on Tuesday evening, OpenAI announced in San Francisco that an agreement had been reached and Altman would be returning. “Over the last five days, I have seen people at OpenAI calmly and determinedly advance their mission despite everything that was happening around them,” Nadella said on X.

Alfred Lin, a partner at venture capital firm Sequoia Capital, which has invested in OpenAI, said he was “inspired” by Altman and Brockman’s “unwavering optimism and commitment to their mission and impact.”

On Wednesday, Sutskever – one of the directors who voted to remove Altman – said nothing could express “how happy I am with the outcome of the talks.”