OpenAI’s CEO Was Reinstated Just Days After Being Ousted

OpenAI’s CEO Was Reinstated Just Days After Being Ousted
Paul Allison, CFA

3 months ago2 mins

Mentioned in story

What’s going on here?

Sam Altman was reinstated as OpenAI’s CEO, proving that the five-day test run without him was more hassle than it was worth.

What does this mean?

Netflix scriptwriters have just been handed the plot of the year – unless AI can whip up a screenplay first, that is. In the last drama-filled few days, OpenAI’s cofounder was CEO, ex-CEO, head of Microsoft’s new AI lab, and now, CEO again – a lifetime of achievements most can only dream of. The side character’s ready to be cast too: former treasury secretary Larry Summers unexpectedly landed a seat on the board. You can bet the office was full of whispers when Altman clocked in on Wednesday, but let’s hope the focus wasn’t lost for long: OpenAI’s working on potentially humankind-ending technology, after all.

Why should I care?

The bigger picture: Follow the leader.

Altman certainly built quite a reputation for himself at OpenAI, or maybe he was known for bringing in snacks every Friday. More than 90% of the company’s workers threatened to quit after the shock firing, while big-name tech executives threw their compliments at the cofounder. That amount of dependence is known as a “key-man risk” for a company, and while most CEOs won’t make or break a firm, any small businesses that have pinned their hopes on a single leader may be inspired to draft more locked-in contract terms right about now.

AI pay
OpenAI staff turned their rare skillsets into leverage | Source: Bloomberg

Zooming in: It’s about the principle, promise.

OpenAI’s protesting staff may have been sacrificing themselves to support the firm’s visionary, it’s true. But with a round of fundraising – expected to value the firm at nearly $90 billion – coming up, there was probably another motive at play. Staff will be able to cash in their shares at the next round, which will make most of them millionaires. Altman’s departure could have jeopardized that price tag, though, so OpenAI workers arguably had a financial incentive to keep him around.

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