One of the strangest episodes in the history of the tech industry ended as startup events often do: with a party in San Francisco’s eclectic Mission District.
Late Tuesday, OpenAI announced that Sam Altman would return as chief executive, five days after the artificial intelligence startup’s board forced him out. At the company’s San Francisco office, boisterous employees ate chicken tenders, drank boba tea and champagne and celebrated Mr. Altman’s return late into the night.
Mr. Altman’s reinstatement was the culmination of a corporate drama that mixed lots of money, a pressure campaign from allies, intense media attention and the unshakable conviction of some members of the AI community that they should proceed with caution in what they are building .
Now OpenAI, which appeared to be on the verge of collapse for two days just a year after launching the popular ChatGPT chatbot, will replace a heavily criticized board of directors with a more traditional group including former Treasury Secretary Lawrence Summers and a former executive at software giant Salesforce .
Additional board members, who could be drawn from OpenAI’s largest investor Microsoft and the AI research community, are expected to join soon. Mr. Altman was not appointed to the board Tuesday night, and it was not clear whether he ever will be.
On Wednesday, a company appeared to emerge from the mess better able to handle the billions of dollars thrown its way and the attention it has received since ChatGPT’s release. However, some are already arguing that it will not be as well aligned with OpenAI’s original mission of creating AI that is safe for the world.
The OpenAI debacle has shown that building AI systems is testing whether business people looking to make money can work with researchers who fear that what they are developing will ultimately destroy jobs or become a threat could if technologies like autonomous weapons get out of control.
The tech industry – perhaps even the entire world – will be eager to see whether OpenAI gets closer to these goals than it was a week ago.
“We will look back on this period as a very brief, highly dramatic incident that gave us a public and dramatic reset,” said Aaron Levie, chief executive of Box, an online data storage provider. “This has to be a trustworthy organization that is aligned with its board, and in the end OpenAI is a more valuable organization than it was a week ago.”
When Mr. Altman, 38, was fired shortly after noon on Friday, OpenAI was thrown into chaos. His employees and Microsoft, which invested $13 billion in the company, were caught off guard.
The AI company has an unusual governance structure. It is controlled by a nonprofit’s board of directors and its investors have no formal ability to influence decisions. But no one expected that four members of the board — including OpenAI’s chief scientist Ilya Sutskever, a co-founder — would suddenly remove Mr. Altman on the grounds that he could not be trusted with the company’s mission of developing artificial intelligence that “benefits.” “, no longer entrust all humanity.”
The consequences were immediate. OpenAI President Greg Brockman, who also co-founded the company eight years ago, resigned in protest.
Over the last year, the board became increasingly frustrated with Mr. Altman’s behavior and felt it needed to get him under control, according to two people familiar with the board’s thinking. One episode in particular highlighted how strained the relationship between the board and Mr. Altman had become.
Both sides focused on an October research paper co-authored by Helen Toner, an OpenAI board member who serves as strategy director at Georgetown University’s Center for Security and Emerging Technology.
Mr. Altman complained to Ms. Toner that the paper appeared to criticize OpenAI’s efforts to keep its technologies secure while praising a competitor. He argued that “any criticism from a board member carries a lot of weight,” he wrote in an email to colleagues.
Ms. Toner defended the paper as academic research, but Mr. Altman and other OpenAI executives, including Mr. Sutskever, later discussed whether she should be removed from the board, a person involved in the discussions said.
But Mr. Sutskever, who fears that AI could one day destroy humanity, unexpectedly sided with Ms. Toner and two other board members: Adam D’Angelo, chief executive of the question-and-answer site Quora, and Tasha McCauley, to Associate Senior Management Scholar at the RAND Corporation.
During a video call on Friday, Mr. Sutskever read a statement to Mr. Altman that said Mr. Altman was being fired because he was “not consistently open in his communications with the board.”
Over the next five days, Mr. Altman and his allies urged the board to bring him back and resign from the board. On Sunday, he and company executives negotiated at OpenAI’s offices. In the early afternoon, a delivery driver arrived outside on a motorcycle with a dozen drinks from the Boba Guys chain carrying two bags. Then a second delivery driver appeared.
That night, talks collapsed and the board named Emmett Shear, a co-founder of Twitch, as interim boss.
But Microsoft offered a Plan B: Hire Mr. Altman to co-run a new AI research lab for Microsoft with Mr. Brockman. OpenAI executives organized a letter from employees saying they would follow Mr. Altman to Microsoft if he was not rehired. More than 700 of OpenAI’s 770 employees have signed, including Mr. Sutskever, who said in a post on X that he “deeply regrets” his role in Mr. Altman’s ouster.
The pressure gave other board members pause, three people familiar with their thinking said. They were appalled that Mr. Altman and his allies were encouraging a mutiny and wondered whether it might be illegal because the employees had a contractual obligation to the company, not its chief executive. And they were confident that as a board they were acting with integrity and fulfilling their commitment to the nonprofit’s mission.
The board remains committed to forcing Mr. Altman to change his behavior, said two people familiar with the board’s deliberations. There have also been concerns about some of his recent efforts to raise money for personal interests, such as for a drug development start-up, while also raising money for OpenAI.
The discussions from Saturday to Tuesday focused on how to create a committee that everyone can trust. For current members, that meant finding directors who would check Mr. Altman’s power and push for an independent investigation into his behavior.
While Microsoft supported Mr. Altman’s return to OpenAI, the company was working on backup plans, a person familiar with the matter said. Microsoft employees began preparing offer letters and assembling immigration lawyers for OpenAI employees for work visas, the person said.
OpenAI’s three board members spent most of Tuesday on Google Meet video calls discussing board options. They spoke to Microsoft CEO Satya Nadella several times, one of these people said.
Mr. Altman’s allies offered Mr. D’Angelo, Mr. Summers and Bret Taylor, a veteran Silicon Valley executive, as board members. Mr. Taylor, who will be the new chief executive, oversaw Twitter’s $44 billion sale to Elon Musk last year when he led Twitter’s board.
Mr. Taylor and Ms. McCauley did not respond to requests for comment. No one involved in the discussions has explained how Mr. Summers became an option, and he did not respond to requests for comment on Wednesday.
But he has recently established himself as an authority on AI and economics. Mr. Summers has warned that ChatGPT is coming for “cognitive teaching” and will change the way doctors diagnose, editors work on books, and Wall Street traders invest. He has also served on the boards of other technology companies, including financial services company Block, formerly known as Square.
The board considers Mr. Summers an independent thinker with enough management experience to hold his own against Mr. Altman, two people familiar with the negotiations said.
On Tuesday night they had a deal. Thanksgiving helped. Despite the differences, everyone agreed that the chaos should not spill over into Thursday, one person said.
But there is still a lot to do. Over the next six months, the board will analyze and possibly change OpenAI’s unusual structure, one of these people said.
After the decision to bring Mr. Altman back, OpenAI employees filled employee Slack channels with heart emojis and images of a frog, known as “Frog,” which has become an unofficial company mascot, three employees said.
Late Tuesday, employees gathered at the company’s office to drink boba tea, an insider’s clue to the weekend’s coverage. Mr. Brockman posted a selfie with dozens of smiling workers in the office around midnight.
The caption read: “We are so back.”
Erin Griffith and Yiwen Lu contributed reporting.