The Nonlinear Library LW - OpenAI: The Battle of the Board by Zvi
Nov 22, 2023
17:32
Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: OpenAI: The Battle of the Board, published by Zvi on November 22, 2023 on LessWrong.
Previously: OpenAI: Facts from a Weekend.
On Friday afternoon, OpenAI's board fired CEO Sam Altman.
Overnight, an agreement in principle was reached to reinstate Sam Altman as CEO of OpenAI, with an initial new board of Brad Taylor (ex-co-CEO of Salesforce, chair), Larry Summers and Adam D'Angelo.
What happened? Why did it happen? How will it ultimately end? The fight is far from over.
We do not entirely know, but we know a lot more than we did a few days ago.
This is my attempt to put the pieces together.
This is a Fight For Control; Altman Started it
This was and still is a fight about control of OpenAI, its board, and its direction.
This has been a long simmering battle and debate. The stakes are high.
Until recently, Sam Altman worked to reshape the company in his own image, while clashing with the board, and the board did little.
While I must emphasize we do not know what motivated the board, a recent power move by Altman likely played a part in forcing the board's hand.
OpenAI is a Non-Profit With a Mission
The structure of OpenAI and its board put control in doubt.
Here is a diagram of OpenAI's structure:
Here is OpenAI's mission statement, the link has intended implementation details as well:
This document reflects the strategy we've refined over the past two years, including feedback from many people internal and external to OpenAI. The timeline to AGI remains uncertain, but our Charter will guide us in acting in the best interests of humanity throughout its development.
OpenAI's mission is to ensure that artificial general intelligence (AGI) - by which we mean highly autonomous systems that outperform humans at most economically valuable work - benefits all of humanity. We will attempt to directly build safe and beneficial AGI, but will also consider our mission fulfilled if our work aids others to achieve this outcome.
OpenAI warned investors that they might not make any money:
The way a 501(c)3 works is essentially that the board is answerable to no one. If you have a majority of the board for one meeting, you can take full control of the board.
But does the board have power? Sort of. It has a supervisory role, which means it can hire or fire the CEO. Often the board uses this leverage to effectively be in charge of major decisions. Other times, the CEO effectively controls the board and the CEO does what he wants.
A critical flaw is that firing (and hiring) the CEO, and choosing the composition of a new board, is the board's only real power.
The board only has one move. It can fire the CEO or not fire the CEO. Firing the CEO is a major escalation that risks disruption. But escalation and disruption have costs, reputational and financial. Knowing this, the CEO can and often does take action to make them painful to fire, or calculates that the board would not dare.
Sam Altman's Perspective
While his ultimate goals for OpenAI are far grander, Sam Altman wants OpenAI for now to mostly function as an ordinary Big Tech company in partnership with Microsoft. He wants to build and ship, to move fast and break things. He wants to embark on new business ventures to remove bottlenecks and get equity in the new ventures, including planning a Saudi-funded chip factory in the UAE and starting an AI hardware project. He lobbies in accordance with his business interests, and puts a combination of his personal power, valuation and funding rounds, shareholders and customers first.
To that end, over the course of years, he has remade the company culture through addition and subtraction, hiring those who believe in this mission and who would be personally loyal to him. He has likely structured the company to give him free rein and hide his actions from the board and others. Normal CEO did n...
Previously: OpenAI: Facts from a Weekend.
On Friday afternoon, OpenAI's board fired CEO Sam Altman.
Overnight, an agreement in principle was reached to reinstate Sam Altman as CEO of OpenAI, with an initial new board of Brad Taylor (ex-co-CEO of Salesforce, chair), Larry Summers and Adam D'Angelo.
What happened? Why did it happen? How will it ultimately end? The fight is far from over.
We do not entirely know, but we know a lot more than we did a few days ago.
This is my attempt to put the pieces together.
This is a Fight For Control; Altman Started it
This was and still is a fight about control of OpenAI, its board, and its direction.
This has been a long simmering battle and debate. The stakes are high.
Until recently, Sam Altman worked to reshape the company in his own image, while clashing with the board, and the board did little.
While I must emphasize we do not know what motivated the board, a recent power move by Altman likely played a part in forcing the board's hand.
OpenAI is a Non-Profit With a Mission
The structure of OpenAI and its board put control in doubt.
Here is a diagram of OpenAI's structure:
Here is OpenAI's mission statement, the link has intended implementation details as well:
This document reflects the strategy we've refined over the past two years, including feedback from many people internal and external to OpenAI. The timeline to AGI remains uncertain, but our Charter will guide us in acting in the best interests of humanity throughout its development.
OpenAI's mission is to ensure that artificial general intelligence (AGI) - by which we mean highly autonomous systems that outperform humans at most economically valuable work - benefits all of humanity. We will attempt to directly build safe and beneficial AGI, but will also consider our mission fulfilled if our work aids others to achieve this outcome.
OpenAI warned investors that they might not make any money:
The way a 501(c)3 works is essentially that the board is answerable to no one. If you have a majority of the board for one meeting, you can take full control of the board.
But does the board have power? Sort of. It has a supervisory role, which means it can hire or fire the CEO. Often the board uses this leverage to effectively be in charge of major decisions. Other times, the CEO effectively controls the board and the CEO does what he wants.
A critical flaw is that firing (and hiring) the CEO, and choosing the composition of a new board, is the board's only real power.
The board only has one move. It can fire the CEO or not fire the CEO. Firing the CEO is a major escalation that risks disruption. But escalation and disruption have costs, reputational and financial. Knowing this, the CEO can and often does take action to make them painful to fire, or calculates that the board would not dare.
Sam Altman's Perspective
While his ultimate goals for OpenAI are far grander, Sam Altman wants OpenAI for now to mostly function as an ordinary Big Tech company in partnership with Microsoft. He wants to build and ship, to move fast and break things. He wants to embark on new business ventures to remove bottlenecks and get equity in the new ventures, including planning a Saudi-funded chip factory in the UAE and starting an AI hardware project. He lobbies in accordance with his business interests, and puts a combination of his personal power, valuation and funding rounds, shareholders and customers first.
To that end, over the course of years, he has remade the company culture through addition and subtraction, hiring those who believe in this mission and who would be personally loyal to him. He has likely structured the company to give him free rein and hide his actions from the board and others. Normal CEO did n...