OpenAI says ousted CEO Sam Altman will return under new board

After more than four days of drama, leaders of OpenAI said late Tuesday that they had reached an agreement "in principle" with ousted CEO Sam Altman to return to the company under a reconstituted board.

In a message posted to X, the company behind ChatGPT said the board would consist of former Salesforce CEO Bret Taylor, former Treasury Secretary Larry Summers and current board member Adam D'Angelo, CEO of Quora.

The statement made no mention of current board members Helen Toner, Tasha McCauley or Ilya Sutskever, an OpenAI co-founder who serves as the company’s chief scientist and who has publicly expressed regret over his role in ousting Altman.

"We are collaborating to figure out the details," the company's statement said. "Thank you so much for your patience through this."

Altman posted a message on X as well, saying: "i love openai, and everything i’ve done over the past few days has been in service of keeping this team and its mission together. when i decided to join msft on sun evening, it was clear that was the best path for me and the team. with the new board and w satya’s support, i’m looking forward to returning to openai, and building on our strong partnership with msft."

Greg Brockman, who quit as OpenAI's president on Friday after the board fired Altman, also said on X that he was returning to the company and "getting back to coding." It was unclear if he was returning as president.

The moves appeared to cap a drama that had transfixed Silicon Valley for days.

After Altman's ouster, Microsoft CEO Satya Nadella announced Altman and Brockman would be joining his company to lead an AI research division. Nearly all of OpenAI’s 770 employees signed a letter calling for the board’s resignation. Ironically, among the signatories was Sutskever, a board member and one of the architects of Altman’s ouster.

Pressure had been mounting on OpenAI to change either the board makeup or the structure itself, much of it coming from investors who have poured billions into the company. Microsoft is the largest outside investor, with some $13 billion invested.

Nadella said Tuesday that Microsoft was "encouraged by the changes to the OpenAI board."

He called it "a first essential step on a path to more stable, well-informed and effective governance. Sam, Greg, and I have talked and agreed they have a key role to play along with the OAI leadership team in ensuring OAI continues to thrive and build on its mission. We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners."

After booting Altman, OpenAI had first named Mira Murati, the company's chief technology officer, as interim CEO. Then, late Sunday, the company said it was appointing Twitch co-founder Emmett Shear as interim CEO.

Shear said on X Tuesday evening that he was "deeply pleased by this result, after ~72 very intense hours of work."

"Coming into OpenAI, I wasn’t sure what the right path would be. This was the pathway that maximized safety alongside doing right by all stakeholders involved," he said. "I’m glad to have been a part of the solution."

Toner, one of the board members who apparently endorsed Altman's ouster, posted a brief message to X on Tuesday night: "And now, we all get some sleep"

OpenAI was founded in 2015 by a collection of tech industry leaders, including Altman, Brockman, Elon Musk, LinkedIn co-founder Reid Hoffman and investor Peter Thiel, who tapped a number of top AI researchers like Sutskever to join.

Seeded with $1 billion from its founding partners, OpenAI functioned largely as a research institution in its early history, studying algorithms to better train AI models. 

OpenAI’s first public blog post, co-authored in 2015 by Brockman and Sutskever, announced the organization as a nonprofit artificial intelligence research company with a goal to “advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.” 

In 2019, soon after the release of GPT 2.0, the second generation of its foundational large language model (LLM), the organization announced the creation of what it called a “capped-profit” company, OpenAI LP.  

What OpenAI leaders realized is that the scale of development required to fulfill its mission of creating artificial general intelligence beneficial to humanity required a whole lot of capital, much of it to pay for the massive amount of computational power to develop the technology.

Essentially, the structure let investors receive a “capped return” allowing OpenAI LP to raise capital and attract more talent. OpenAI LP original investors’ returns are limited to 100x in the first round, meaning a $1 investment is capped at $100 in total profits. The rest would go to the nonprofit parent company. 

The primary “fiduciary obligation” of all employees and investors—according to the post announcing OpenAI’s for-profit arm—is to abide by the OpenAI Charter, which aims to make AI technology safe and broadly distributed. 

The development of the capped profit model led to Microsoft’s initial $1 billion investment in the company, which helped advance OpenAI’s goals but led to internal tensions over the company’s direction. Over time, Microsoft has grown its ownership stake to 49% of OpenAI’s capped profit arm, with a total investment of $13 billion. 

Microsoft has balanced its lack of control or board seats by negotiating contracts that gave it rights to OpenAI intellectual property, copies of source code and insight into the “weights” OpenAI uses for its models, essentially how LLMs are tuned to create desired outputs, according to reporting from the New York Times,

Nadella has said he was blindsided by Altman's ouster.

“One thing I’ll be very, very clear on is we are never going to get back into a situation where we get surprised like this ever again,” Nadella said in an interview with Kara Swisher, referring to changing OpenAI’s governance structure.

“We have all the rights, so therefore we will make sure that we are very, very clear that the governance gets fixed in a way that we really have maturity and guarantee that we don’t have surprises.”