In a surprising turn of events, OpenAI's board made the decision to remove CEO Sam Altman without informing key investors beforehand. This shocking news has sent shockwaves through the tech world, leaving everyone, including OpenAI's own investors, stunned. Let's delve into the details of this unexpected move and explore the reactions from the investment community.
Investors Caught Off Guard
Prominent investors left in the dark about OpenAI's CEO ousting
Investors such as Vinod Khosla and Reid Hoffman were taken by surprise when OpenAI's board decided to remove CEO Sam Altman without prior notice. These key venture capital backers were not given any advanced warning, leaving them shocked and bewildered.
One investor familiar with the matter expressed their disbelief, stating, 'This is insane.' Even Vinod Khosla, who had invested in OpenAI through his firm Khosla Ventures, was unaware of the ousting prior to the announcement.
Reid Hoffman, an early investor and former board member of OpenAI, was also not made aware of the news. The lack of communication with such prominent investors has raised eyebrows and sparked speculation about the decision-making process within OpenAI.
Microsoft Informed Last Minute
Microsoft learns of Altman's firing moments before the public announcement
Despite Microsoft's significant investment of over $10 billion in OpenAI, the tech giant was only informed about Sam Altman's firing and removal from the board one minute before the news was shared in a press release.
According to an Axios report, this last-minute notification caught Microsoft off guard, highlighting a lack of transparency and communication between OpenAI and its major investor.
It remains to be seen how this sudden leadership change will impact the relationship between OpenAI and Microsoft moving forward.
OpenAI's Shifting Corporate Structure
From nonprofit to for-profit AI company
OpenAI's corporate structure has undergone a significant transformation since its inception as a nonprofit organization in 2015. Initially, key investors included prominent figures such as Elon Musk, Peter Thiel, and Amazon Web Services, alongside the co-founders Sam Altman and Greg Brockman.
Now, OpenAI operates as a for-profit AI company controlled by a non-profit umbrella organization. Investors in the for-profit business agree to a cap on their return on investment, with the initial investors having a cap of 100x.
Later investors, including Andreessen Horowitz, Bedrock Capital, Sequoia, and Tiger Global, have also joined the journey, contributing to OpenAI's growth and evolution.
