The dramatic events at OpenAI in November 2023 sent shockwaves through the tech industry and raised fundamental questions about AI governance, corporate structure, and the future of the world’s most influential AI company.
Timeline of Events
Friday, November 17
- OpenAI board announces Sam Altman’s termination as CEO
- Board cites lack of candor in communications
- President Greg Brockman also removed from board, resigns
- Mira Murati named interim CEO
- Announcement catches employees, investors, and Microsoft off guard
Saturday-Sunday, November 18-19
- Intense negotiations for Altman’s return
- Three senior researchers resign in solidarity
- Emmett Shear (former Twitch CEO) named interim CEO
- Microsoft offers to hire Altman and any employees who follow
- Over 700 of 770 employees sign letter demanding board resign
Monday, November 20
- Negotiations continue around the clock
- Employee pressure intensifies
- Microsoft states it’s committed to partnership regardless of outcome
- Reports of deal close to completion
Wednesday, November 22
- Sam Altman returns as CEO
- New board announced: Bret Taylor (Chair), Larry Summers, Adam D’Angelo
- Investigation into events to be conducted
- Company begins stabilization
The Board Structure
OpenAI’s unusual structure contributed to the crisis:
Non-Profit Control
- OpenAI Inc (non-profit) controls OpenAI LP (for-profit)
- Board has fiduciary duty to mission, not shareholders
- Can prioritize safety over commercial interests
- Structure designed to keep AI beneficial
Why This Matters
The structure that enabled Altman’s sudden removal was designed to prevent profit motives from overriding safety. Ironically, it also enabled a board to remove a CEO without investor or employee input.
Key Players
Sam Altman
CEO who built OpenAI into an AI powerhouse with a $90B valuation. Known for aggressive deployment strategy and commercial partnerships.
Ilya Sutskever
Chief Scientist and board member who reportedly led the removal effort. Later signed the employee letter supporting Altman’s return.
Microsoft
Invested $13 billion with limited governance rights. The crisis exposed risks of their passive investor position.
The Employees
The near-universal employee revolt proved decisive, demonstrating that talent, not just capital, drives AI companies.
Aftermath and Changes
Governance Reforms
- Expanded board with experienced directors
- Investigation into what went wrong
- Likely restructuring of nonprofit-for-profit relationship
- Enhanced communication protocols
Industry Impact
- Questions about AI company governance models
- Investor awareness of structural risks
- Talent leverage demonstrated
- Microsoft’s dependence exposed
Ongoing Questions
- What specifically triggered the removal?
- Will the nonprofit structure survive?
- How will safety concerns be balanced with commercial interests?
- Can trust be rebuilt among all parties?
Lessons Learned
The OpenAI crisis offers important lessons:
- Governance matters - Unusual corporate structures create unusual risks
- Talent is power - Knowledge workers have unprecedented leverage
- Communication is critical - Lack of transparency created cascading failures
- Mission alignment - Balancing safety and deployment remains unresolved
The full story may never be public, but its impact on AI governance discussions will persist for years.