OpenAI’s unusual company structure weakened Sam Altman’s position as CEO and left him open to surprise on Friday when he was quickly ousted from the company.

On Friday, November 17th, Sam Altman was removed from the position of CEO of OpenAI by the company’s board of directors. Meera Murthy, OpenAI’s Chief Technology Officer, has been appointed as the interim CEO. Greg Brockman, the company’s president and co-founder, also resigned a few hours after the announcement.

In a blog post, OpenAI expressed gratitude for Sam Altman’s contributions to the establishment and development of the company. However, they emphasized the need for new leadership as they continue to advance. Meera Murthy, with her exceptional qualifications in leading the company’s research, product, and security efforts, has been deemed fit to hold the role of interim CEO.

Launched in 2015, OpenAI gained significant attention in November by unveiling ChatGPT, a generative AI that quickly became one of the fastest-growing software applications in the world.

Why was Altman ousted? OpenAI stated in their release, “Mr. Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently clear in his communication with the board, hindering their ability to fulfill their oversight responsibilities.” The board no longer has confidence in Altman’s ability to continue leading OpenAI.

It remains unclear from the blog post why this decision was made beyond what was explicitly stated.

Altman’s dismissal and Brockman’s resignation have sent shockwaves through the tech industry. According to a report by the Associated Press, the departures surprised many employees, who learned about the internal message and sudden management changes from a blog post.

While the full impact of these changes will unfold over time, immediate concerns focus on how they may affect OpenAI’s fundraising efforts. The company is currently in discussions to close a new funding round that would value it at over $80 billion—nearly three times its valuation from a year ago. The repercussions of Altman’s departure on these negotiations are yet to be seen.

Altman, once viewed as a master fundraiser and co-founder of OpenAI, had successfully secured investments amounting to billions from Microsoft. Thomas Hess, the chairman of hedge fund Great Hill Capital, commented, “In the short term, it will hurt OpenAI’s ability to raise more capital. In the intermediate term, it won’t matter.”

Open AI CEO Sam Altman walks to his seat to participate in a discussion entitled ‘Charting the Path Forward: The Future of Artificial Intelligence” during the Asia-Pacific Economic Cooperation (APEC) CEO Summit, Thursday, Nov. 16, 2023, in San Francisco. (AP Photo/Eric Risberg)

Other analysts have told news outlets that while Altman’s departure is disruptive, it won’t hinder the popularity of generative AI or OpenAI’s dominance in the field.

DA Davidson analyst Gil Luria said, “The innovation created by OpenAI is bigger than any one or two individuals, and there’s no reason to think that OpenAI will lose its leadership position due to this. If anything, the partnership with Microsoft and progress at OpenAI ensure that appropriate leadership changes are being implemented.”

Who is Sam Altman?

According to The New Yorker, Altman was born in Chicago in 1985. At the age of 8, he learned to program computers and set them apart. He studied computer science at Stanford University but dropped out after a year to start a startup with some classmates.

After the failure of his social media app, Loopt, Altman joined Y Combinator, a venture capital firm focused on funding startups. He became its CEO in 2014. During his tenure, Y Combinator funded well-known startups like Airbnb and Dropbox.

In 2019, Altman decided to step down and focus full-time on OpenAI, an organization he co-founded as CEO five years earlier.

Who is Meera Murthy?

Born in Albania and educated in Canada, the 34-year-old Murthy is a mechanical engineer who joined OpenAI in 2018 after working at Tesla. According to a report in The New York Times, she played a crucial role in the development of a computing system that tracks the movement of hands and fingers for a startup named Loop Motion.

At OpenAI, she has overseen the development and launch of groundbreaking products like ChatGPT and DALL-E. Although Murthy became the company’s Chief Technology Officer last year, current and former employees told the NYT that she was working as the company’s Chief Operating Officer.

She ensured that the company’s engineers developed versions of ChatGPT on schedule. She also managed the company’s relationship with Microsoft, an investor and collaborator that has deployed OpenAI’s technology in Washington and Europe, helping shape its artificial intelligence policy, according to the report.

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