Joel Umanzor

A day after Sam Altman was <a href="https://sfstandard.com/2023/11/17/openai-sam-altman-firing-board-members/">ousted as CEO of OpenAI</a>, Silicon Valley and beyond were waiting with bated breath to see whether his next move would be to start a new company—or negotiate a return to the San Francisco firm best known for making ChatGPT.

How OpenAI CEO Sam Altman was fired by rival board members

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<p>A day after Sam Altman was <a href="https://sfstandard.com/2023/11/17/openai-sam-altman-firing-board-members/">ousted as CEO of OpenAI</a>, Silicon Valley and beyond were waiting with bated breath to see whether his next move would be to start a new company—or negotiate a return to the San Francisco firm best known for making ChatGPT.</p>

Altman’s sudden firing on Friday set off a chain reaction of a number of other executives and researchers—like&nbsp;OpenAI President Greg Brockman—stepping down in solidarity.

<p>Altman’s sudden firing on Friday set off a chain reaction of a number of other executives and researchers—like&nbsp;OpenAI President Greg Brockman—stepping down in solidarity.</p>

Altman&#8217;s dismissal may have been related to a long-standing divide in the AI community, with one side that sees AI as an enormous business opportunity and those who are concerned about the dangers of AI’s rapid advancement.

<p>Altman's dismissal may have been related to a long-standing divide in the AI community, with one side that sees AI as an enormous business opportunity and those who are concerned about the dangers of AI’s rapid advancement.</p>

<p>Altman&#8217;s dismissal may have been related to a long-standing divide in the AI community, with one side that sees AI as an enormous business opportunity and those who are concerned about the dangers of AI’s rapid advancement.</p>

<strong>READ MORE: </strong><a href="https://sfstandard.com/2023/11/17/openai-sam-altman-firing-board-members/">How OpenAI CEO Sam Altman Was Fired by Rival Board Members</a>

<p><strong>READ MORE: </strong><a href="https://sfstandard.com/2023/11/17/openai-sam-altman-firing-board-members/">How OpenAI CEO Sam Altman Was Fired by Rival Board Members</a></p>

By Saturday afternoon, the <a href="https://www.theverge.com/2023/11/18/23967199/breaking-openai-board-in-discussions-with-sam-altman-to-return-as-ceo" target="_blank" rel="noreferrer noopener">Verge</a> and the <a href="https://www.nytimes.com/2023/11/18/technology/sam-altman-openai-board.html" target="_blank" rel="noreferrer noopener">New York Times were reporting</a> that OpenAI’s board was attempting to bring Altman back.

<p>By Saturday afternoon, the <a href="https://www.theverge.com/2023/11/18/23967199/breaking-openai-board-in-discussions-with-sam-altman-to-return-as-ceo" target="_blank" rel="noreferrer noopener">Verge</a> and the <a href="https://www.nytimes.com/2023/11/18/technology/sam-altman-openai-board.html" target="_blank" rel="noreferrer noopener">New York Times were reporting</a> that OpenAI’s board was attempting to bring Altman back.</p>

Meanwhile, <a href="https://www.theinformation.com/articles/openai-co-founder-altman-plans-new-venture?rc=uatl0i&amp;shared=001ac1e87ff564c3" target="_blank" rel="noreferrer noopener">The Information</a> and <a href="https://www.reuters.com/technology/openai-co-founder-altman-planning-new-venture-information-2023-11-18/#:~:text=Nov%2018%20(Reuters)%20%2D%20Sam,the%20plan%20said%20on%20Saturday." target="_blank" rel="noreferrer noopener">rumors</a> pointed to Altman launching his own venture.

<p>Meanwhile, <a href="https://www.theinformation.com/articles/openai-co-founder-altman-plans-new-venture?rc=uatl0i&amp;shared=001ac1e87ff564c3" target="_blank" rel="noreferrer noopener">The Information</a> and <a href="https://www.reuters.com/technology/openai-co-founder-altman-planning-new-venture-information-2023-11-18/#:~:text=Nov%2018%20(Reuters)%20%2D%20Sam,the%20plan%20said%20on%20Saturday." target="_blank" rel="noreferrer noopener">rumors</a> pointed to Altman launching his own venture.</p>

Altman responded on Friday night to his firing with two cryptic posts on X, formerly known as Twitter, in which he thanked his supporters while comparing the news to reading&nbsp;one’s eulogy. He also alluded to not having any shares in the company.

<p>Altman responded on Friday night to his firing with two cryptic posts on X, formerly known as Twitter, in which he thanked his supporters while comparing the news to reading&nbsp;one’s eulogy. He also alluded to not having any shares in the company.</p>

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<blockquote class="twitter-tweet" data-width="500" data-dnt="true"><p lang="en" dir="ltr">i love you all. <br><br>today was a weird experience in many ways. but one unexpected one is that it has been sorta like reading your own eulogy while you’re still alive. the outpouring of love is awesome.<br><br>one takeaway: go tell your friends how great you think they are.</p>&mdash; Sam Altman (@sama) <a href="https://twitter.com/sama/status/1725742088317534446?ref_src=twsrc%5Etfw">November 18, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

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<blockquote class="twitter-tweet" data-width="500" data-dnt="true"><p lang="en" dir="ltr">if i start going off, the openai board should go after me for the full value of my shares</p>&mdash; Sam Altman (@sama) <a href="https://twitter.com/sama/status/1725748751367852439?ref_src=twsrc%5Etfw">November 18, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

OpenAI&#8217;s board oversees the nonprofit parent organization that controls the for-profit subsidiary. The stated mission is to create safe artificial general intelligence for humanity&#8217;s benefit. Under the governance structure, independent directors without equity are to constitute the board majority.

<p>OpenAI's board oversees the nonprofit parent organization that controls the for-profit subsidiary. The stated mission is to create safe artificial general intelligence for humanity's benefit. Under the governance structure, independent directors without equity are to constitute the board majority.</p>

<p>OpenAI&#8217;s board oversees the nonprofit parent organization that controls the for-profit subsidiary. The stated mission is to create safe artificial general intelligence for humanity&#8217;s benefit. Under the governance structure, independent directors without equity are to constitute the board majority.</p>

But a source told The Standard on Friday that the billions invested by Microsoft and others raised complications for that structure.

<p>But a source told The Standard on Friday that the billions invested by Microsoft and others raised complications for that structure.</p>

OpenAI raised approximately $11.3 billion in funding from investors, including Microsoft, Sequoia Capital, Andreessen Horowitz and Tiger Global, according to Crunchbase.

<p>OpenAI raised approximately $11.3 billion in funding from investors, including Microsoft, Sequoia Capital, Andreessen Horowitz and Tiger Global, according to Crunchbase.</p>

According to an Axios <a href="https://www.axios.com/2023/11/17/microsoft-openai-sam-altman-ouster" target="_blank" rel="noreferrer noopener">report</a> Friday, Microsoft—OpenAI’s largest investor—was blindsided by the move.

<p>According to an Axios <a href="https://www.axios.com/2023/11/17/microsoft-openai-sam-altman-ouster" target="_blank" rel="noreferrer noopener">report</a> Friday, Microsoft—OpenAI’s largest investor—was blindsided by the move.</p>

A memo to OpenAI employees from Chief Operating Officer Brad Lightcap, which was obtained Saturday by <a href="https://www.cnbc.com/2023/11/18/openai-exec-addresses-ceo-sam-altmans-firing-in-note-to-employees-read-the-full-memo.html?&amp;qsearchterm=sam%20altman" target="_blank" rel="noreferrer noopener">CNBC</a>, clarified that Altman’s firing was not related to any misconduct.

<p>A memo to OpenAI employees from Chief Operating Officer Brad Lightcap, which was obtained Saturday by <a href="https://www.cnbc.com/2023/11/18/openai-exec-addresses-ceo-sam-altmans-firing-in-note-to-employees-read-the-full-memo.html?&amp;qsearchterm=sam%20altman" target="_blank" rel="noreferrer noopener">CNBC</a>, clarified that Altman’s firing was not related to any misconduct.</p>

“We can say definitively that the board’s decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices,” Lightcap wrote. “This was a breakdown in communication between Sam and the board.”&nbsp;

<p>“We can say definitively that the board’s decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices,” Lightcap wrote. “This was a breakdown in communication between Sam and the board.”&nbsp;</p>

<strong>READ MORE: </strong><a href="https://sfstandard.com/2023/11/17/openai-sam-altman-fired-apec-talk/">Here’s What Sam Altman Said at APEC, a Day Before He Got Fired From OpenAI</a>

Here&#8217;s what Sam Altman said at APEC, a day before he got fired from OpenAI

<p><strong>READ MORE: </strong><a href="https://sfstandard.com/2023/11/17/openai-sam-altman-fired-apec-talk/">Here’s What Sam Altman Said at APEC, a Day Before He Got Fired From OpenAI</a></p>

OpenAI’s board has been in contact with Altman on possibly returning to the company, though he admittingly is “ambivalent” about returning if no governance changes happen, according to the Verge <a href="https://www.theverge.com/2023/11/18/23967199/breaking-openai-board-in-discussions-with-sam-altman-to-return-as-ceo" target="_blank" rel="noreferrer noopener">article</a> published Saturday, citing sources familiar with the situation.

<p>OpenAI’s board has been in contact with Altman on possibly returning to the company, though he admittingly is “ambivalent” about returning if no governance changes happen, according to the Verge <a href="https://www.theverge.com/2023/11/18/23967199/breaking-openai-board-in-discussions-with-sam-altman-to-return-as-ceo" target="_blank" rel="noreferrer noopener">article</a> published Saturday, citing sources familiar with the situation.</p>

For David Larcker, director of the Corporate Governance Research Initiative at Stanford University&#8217;s Graduate School of Business, OpenAI’s dynamic rise in the AI industry could have contributed to Altman and the nonprofit board not seeing eye-to-eye on the company’s mission.

<p>For David Larcker, director of the Corporate Governance Research Initiative at Stanford University's Graduate School of Business, OpenAI’s dynamic rise in the AI industry could have contributed to Altman and the nonprofit board not seeing eye-to-eye on the company’s mission.</p>

<p>For David Larcker, director of the Corporate Governance Research Initiative at Stanford University&#8217;s Graduate School of Business, OpenAI’s dynamic rise in the AI industry could have contributed to Altman and the nonprofit board not seeing eye-to-eye on the company’s mission.</p>

“When things take off like that, you know, the job of the board just gets much more complicated,” he said. “You&#8217;ve got this cap on profits to be distributed and this social mission. You&#8217;ve probably got billions of dollars of potential profit lying there. My guess is they just had a real different perspective on that. And they (the board) had the votes to do it.”

<p>“When things take off like that, you know, the job of the board just gets much more complicated,” he said. “You've got this cap on profits to be distributed and this social mission. You've probably got billions of dollars of potential profit lying there. My guess is they just had a real different perspective on that. And they (the board) had the votes to do it.”</p>

<p>“When things take off like that, you know, the job of the board just gets much more complicated,” he said. “You&#8217;ve got this cap on profits to be distributed and this social mission. You&#8217;ve probably got billions of dollars of potential profit lying there. My guess is they just had a real different perspective on that. And they (the board) had the votes to do it.”</p>

A longtime San Francisco tech executive and angel investor who has not spoken to Altman but is aware of some of the internal dynamics at OpenAI criticized the firing as imprudent.

<p>A longtime San Francisco tech executive and angel investor who has not spoken to Altman but is aware of some of the internal dynamics at OpenAI criticized the firing as imprudent.</p>

“I really think that this was a foolish move by the board,” the executive said. “AI is a hyper-competitive space, and rightfully so. I believe Sam wanted to move more aggressively than the board felt comfortable with. Perhaps they weren’t on the same page regarding how far the next version has gone in terms of [artificial general intelligence].”

<p>“I really think that this was a foolish move by the board,” the executive said. “AI is a hyper-competitive space, and rightfully so. I believe Sam wanted to move more aggressively than the board felt comfortable with. Perhaps they weren’t on the same page regarding how far the next version has gone in terms of [artificial general intelligence].”</p>

OpenAI&#8217;s board now consists of its Chief Scientist Ilya Sutskever, Quora CEO Adam D&#8217;Angelo, ex-GeoSim Systems CEO Tasha McCauley and Helen Toner of Georgetown&#8217;s Center for Security and Emerging Technology. Altman and Brockman had previously served on the board as well. 

<p>OpenAI's board now consists of its Chief Scientist Ilya Sutskever, Quora CEO Adam D'Angelo, ex-GeoSim Systems CEO Tasha McCauley and Helen Toner of Georgetown's Center for Security and Emerging Technology. Altman and Brockman had previously served on the board as well. </p>

<p>OpenAI&#8217;s board now consists of its Chief Scientist Ilya Sutskever, Quora CEO Adam D&#8217;Angelo, ex-GeoSim Systems CEO Tasha McCauley and Helen Toner of Georgetown&#8217;s Center for Security and Emerging Technology. Altman and Brockman had previously served on the board as well. </p>

Some observers suggested that the board struggled to keep up with OpenAI’s rapid growth and increasing complexity.  The company said recently it had <a href="https://techcrunch.com/2023/11/06/openais-chatgpt-now-has-100-million-weekly-active-users/" target="_blank" rel="noreferrer noopener">100 million weekly active users</a>.

<p>Some observers suggested that the board struggled to keep up with OpenAI’s rapid growth and increasing complexity.  The company said recently it had <a href="https://techcrunch.com/2023/11/06/openais-chatgpt-now-has-100-million-weekly-active-users/" target="_blank" rel="noreferrer noopener">100 million weekly active users</a>.</p>

In September, <a href="https://news.crunchbase.com/ai/openai-unicorn-valuation-china-zhipu-thrive/" target="_blank" rel="noreferrer noopener">reports</a> surfaced that the company was planning to sell existing shares in a so-called tender offer that would put its valuation at over $80 billion.

<p>In September, <a href="https://news.crunchbase.com/ai/openai-unicorn-valuation-china-zhipu-thrive/" target="_blank" rel="noreferrer noopener">reports</a> surfaced that the company was planning to sell existing shares in a so-called tender offer that would put its valuation at over $80 billion.</p>

Regardless of whether Altman returns, Larcker said he is interested in seeing how the company answers investors like Microsoft.

<p>Regardless of whether Altman returns, Larcker said he is interested in seeing how the company answers investors like Microsoft.</p>

“I&#8217;m sure that all of the investors—Microsoft included—they&#8217;re of course reaching out after this news here,” he said. “No doubt the board&#8217;s going to have a conversation with some of these people almost immediately because there’s real money involved here.”

<p>“I'm sure that all of the investors—Microsoft included—they're of course reaching out after this news here,” he said. “No doubt the board's going to have a conversation with some of these people almost immediately because there’s real money involved here.”</p>

<p>“I&#8217;m sure that all of the investors—Microsoft included—they&#8217;re of course reaching out after this news here,” he said. “No doubt the board&#8217;s going to have a conversation with some of these people almost immediately because there’s real money involved here.”</p>

What’s next for OpenAI, ChatGPT after Sam Altman’s ouster?

Kevin Truong

Perhaps one of our most scrutinized tech moguls, OpenAI CEO Sam Altman can’t <a href="https://www.businessinsider.com/sam-altman-koenigsegg-regera-expensive-sports-car-video-openai-musk-2024-7">buy a sportscar</a>, <a href="https://sfstandard.com/2023/11/17/openai-sam-altman-firing-board-members/">get fired</a>, <a href="https://sfstandard.com/2024/07/16/sam-altman-lawsuit-lemon-mansion/">purchase a house</a>, or make secret plans for an AI-powered <a href="https://sfstandard.com/2024/04/29/jony-ive-buys-up-jackson-square-properties/">superdevice</a> without creating headlines. And yet, in many ways, he remains inscrutable as the face of our AI-fueled hopes and fears.

Sam Altman thought he’d bought a $27M home with a ‘Batcave.’ Lawsuit says it’s a ‘lemon’

Making the Ive Hive: Jony Ive’s bold plans to reshape a small slice of San Francisco

<p>Perhaps one of our most scrutinized tech moguls, OpenAI CEO Sam Altman can’t <a href="https://www.businessinsider.com/sam-altman-koenigsegg-regera-expensive-sports-car-video-openai-musk-2024-7">buy a sportscar</a>, <a href="https://sfstandard.com/2023/11/17/openai-sam-altman-firing-board-members/">get fired</a>, <a href="https://sfstandard.com/2024/07/16/sam-altman-lawsuit-lemon-mansion/">purchase a house</a>, or make secret plans for an AI-powered <a href="https://sfstandard.com/2024/04/29/jony-ive-buys-up-jackson-square-properties/">superdevice</a> without creating headlines. And yet, in many ways, he remains inscrutable as the face of our AI-fueled hopes and fears.</p>

However, a completely different side of Altman was revealed in The Standard’s “Life in Seven Songs” podcast episode, published Tuesday. In the episode, hosted by Sophie Bearman,&nbsp;Altman reveals some of the lesser-known aspects of his life story and some of the more private quirks of his personality.

<p>However, a completely different side of Altman was revealed in The Standard’s “Life in Seven Songs” podcast episode, published Tuesday. In the episode, hosted by Sophie Bearman,&nbsp;Altman reveals some of the lesser-known aspects of his life story and some of the more private quirks of his personality.</p>

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He often stares at a hand ax in his home office&nbsp;


<h2 class="wp-block-heading" id="h-he-often-stares-at-a-hand-ax-in-his-home-office-nbsp">He often stares at a hand ax in his home office&nbsp;</h2>


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<h2 class="wp-block-heading" id="h-he-often-stares-at-a-hand-ax-in-his-home-office-nbsp">He often stares at a hand ax in his home office&nbsp;</h2>

Altman’s home office/work sanctuary is adorned with objects tracking the technological development of humanity’s existence. On one end is a hand ax, the tool used longest by humans and their ancestors. “I just think about how far we have come from this single piece of technology we used everything for,” he said. No comment on whether a Nvidia GPU running ChatGPT is on the other end of the room.

<p>Altman’s home office/work sanctuary is adorned with objects tracking the technological development of humanity’s existence. On one end is a hand ax, the tool used longest by humans and their ancestors. “I just think about how far we have come from this single piece of technology we used everything for,” he said. No comment on whether a Nvidia GPU running ChatGPT is on the other end of the room.</p>


<h2 class="wp-block-heading" id="h-he-s-a-blink-182-fan-kinda">He’s a Blink-182 fan, kinda</h2>


Even as he works to create technology that might someday surpass humanity, Altman is very much a millennial. And like nearly every member of his generation who went through an angsty period, he loves pop-punk pioneers Blink-182. But perhaps he’s loath to admit it. Though Altman chose “What&#8217;s My Age Again?” as one of the seven songs that symbolize his life, he says it’s not a “good song,” and Blink-182 is “not a good band.” But the memories! Et tu, Sam?

<p>Even as he works to create technology that might someday surpass humanity, Altman is very much a millennial. And like nearly every member of his generation who went through an angsty period, he loves pop-punk pioneers Blink-182. But perhaps he’s loath to admit it. Though Altman chose “What's My Age Again?” as one of the seven songs that symbolize his life, he says it’s not a “good song,” and Blink-182 is “not a good band.” But the memories! Et tu, Sam?</p>

<p>Even as he works to create technology that might someday surpass humanity, Altman is very much a millennial. And like nearly every member of his generation who went through an angsty period, he loves pop-punk pioneers Blink-182. But perhaps he’s loath to admit it. Though Altman chose “What&#8217;s My Age Again?” as one of the seven songs that symbolize his life, he says it’s not a “good song,” and Blink-182 is “not a good band.” But the memories! Et tu, Sam?</p>

Jony Ive shaped the iPhone. These are the songs that shaped him

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No matter how rich or famous you are, getting fired in public sucks


<h2 class="wp-block-heading" id="h-no-matter-how-rich-or-famous-you-are-getting-fired-in-public-sucks">No matter how rich or famous you are, getting fired in public sucks</h2>


It was almost a year ago that the OpenAI board ousted Altman from the company in a shocking Friday announcement. As he details to Bearman in the podcast, he turned his home into a de facto command center, with lawyers commandeering his office — the only time he’d ever had guests in the room. The shock and incredibly public nature of the removal “was very painful and sort of shameful,” Altman said. Even though he was back at the company less than a week later, the first few months “were just this crazy fugue,” he recalled. “The whole thing was a just wild, crazy, like, what-the-fuck confusing moment. And then it was over, and we had to pick up the pieces.”

<p>It was almost a year ago that the OpenAI board ousted Altman from the company in a shocking Friday announcement. As he details to Bearman in the podcast, he turned his home into a de facto command center, with lawyers commandeering his office — the only time he’d ever had guests in the room. The shock and incredibly public nature of the removal “was very painful and sort of shameful,” Altman said. Even though he was back at the company less than a week later, the first few months “were just this crazy fugue,” he recalled. “The whole thing was a just wild, crazy, like, what-the-fuck confusing moment. And then it was over, and we had to pick up the pieces.”</p>

He has taken psychedelics at Burning Man, but he’s not one of <em>those</em> Burners


<h2 class="wp-block-heading" id="h-he-has-taken-psychedelics-at-burning-man-but-he-s-not-one-of-those-burners">He has taken psychedelics at Burning Man, but he’s not one of <em>those</em> Burners</h2>


The utopian ideal of a post-AGI (artificial general intelligence) world might closely resemble Burning Man, according to Altman. That means making art, giving gifts, sharing music, caring for one another, and, crucially, not working. Oh, and there will be drugs. Although he’s partaken during the “five or six” times he’s been to Burning Man, his most transformative experience with psychedelics was a guided “weekend-long retreat in Mexico.”

<p>The utopian ideal of a post-AGI (artificial general intelligence) world might closely resemble Burning Man, according to Altman. That means making art, giving gifts, sharing music, caring for one another, and, crucially, not working. Oh, and there will be drugs. Although he’s partaken during the “five or six” times he’s been to Burning Man, his most transformative experience with psychedelics was a guided “weekend-long retreat in Mexico.”</p>

He’s a pro-natalist and envisions having at least half a dozen kids


<h2 class="wp-block-heading" id="h-he-s-a-pro-natalist-and-envisions-having-at-least-half-a-dozen-kids">He’s a pro-natalist and envisions having at least half a dozen kids</h2>


The CEO grew up the eldest of four siblings and apparently wants to top that. Having married Oliver Mulherin this year, Altman is more excited to have kids than anything else. How many does he want? Not 20, but “six or eight, maybe, would be awesome.”

<p>The CEO grew up the eldest of four siblings and apparently wants to top that. Having married Oliver Mulherin this year, Altman is more excited to have kids than anything else. How many does he want? Not 20, but “six or eight, maybe, would be awesome.”</p>

<em>You can listen to Altman’s <a href="https://open.spotify.com/playlist/6McAmo6sFAkknNBNtFIEJa?si=836cc5d174d64959&amp;nd=1&amp;dlsi=d373f70e9401466b">full playlist on Spotify</a> and find a transcript of the podcast episode <a href="https://www.lifeinsevensongs.com/sam-altman/">here</a>. Thoughts? Guest suggestions? Email us at <a href="mailto:lifeinsevensongs@sfstandard.com">lifeinsevensongs@sfstandard.com</a>.</em>

<p><em>You can listen to Altman’s <a href="https://open.spotify.com/playlist/6McAmo6sFAkknNBNtFIEJa?si=836cc5d174d64959&amp;nd=1&amp;dlsi=d373f70e9401466b">full playlist on Spotify</a> and find a transcript of the podcast episode <a href="https://www.lifeinsevensongs.com/sam-altman/">here</a>. Thoughts? Guest suggestions? Email us at <a href="mailto:lifeinsevensongs@sfstandard.com">lifeinsevensongs@sfstandard.com</a>.</em></p>

Five things we learned from our bare-all interview with Sam Altman

Despite OpenAI CEO Sam Altman’s <a href="https://sfstandard.com/business/chatgpt-creator-sam-altman-tells-san-francisco-crowd-he-cant-be-trusted/">frequent public appearances</a>, the firm’s internal structure and operations have <a href="https://sfstandard.com/technology/i-tried-to-visit-openais-office-hilarity-ensued/">remained notoriously opaque</a>.&nbsp;

<p>Despite OpenAI CEO Sam Altman’s <a href="https://sfstandard.com/business/chatgpt-creator-sam-altman-tells-san-francisco-crowd-he-cant-be-trusted/">frequent public appearances</a>, the firm’s internal structure and operations have <a href="https://sfstandard.com/technology/i-tried-to-visit-openais-office-hilarity-ensued/">remained notoriously opaque</a>.&nbsp;</p>

But the startup Levels.fyi has <a href="https://www.levels.fyi/companies/openai/salaries/software-engineer" target="_blank" rel="noreferrer noopener">raised the curtain</a> on a key aspect of OpenAI&#8217;s strategy: the compensation packages it&#8217;s offering to lure engineers to come aboard.

<p>But the startup Levels.fyi has <a href="https://www.levels.fyi/companies/openai/salaries/software-engineer" target="_blank" rel="noreferrer noopener">raised the curtain</a> on a key aspect of OpenAI's strategy: the compensation packages it's offering to lure engineers to come aboard.</p>

<p>But the startup Levels.fyi has <a href="https://www.levels.fyi/companies/openai/salaries/software-engineer" target="_blank" rel="noreferrer noopener">raised the curtain</a> on a key aspect of OpenAI&#8217;s strategy: the compensation packages it&#8217;s offering to lure engineers to come aboard.</p>

According to the startup&#8217;s data—which is taken from real, submitted offer letters mainly over the past year—the median compensation package OpenAI is offering to software engineers is valued at around $925,000.

<p>According to the startup's data—which is taken from real, submitted offer letters mainly over the past year—the median compensation package OpenAI is offering to software engineers is valued at around $925,000.</p>

<p>According to the startup&#8217;s data—which is taken from real, submitted offer letters mainly over the past year—the median compensation package OpenAI is offering to software engineers is valued at around $925,000.</p>

That&#8217;s split up over a $300,000 base salary and $625,000 in OpenAI&#8217;s equivalent of stock compensation, a <a href="https://www.levels.fyi/blog/openai-compensation.html" target="_blank" rel="noreferrer noopener">novel financial incentive</a> called Profit Participation Units (PPU), which is meant to provide employees with benefits from the company&#8217;s potential financial upside.

<p>That's split up over a $300,000 base salary and $625,000 in OpenAI's equivalent of stock compensation, a <a href="https://www.levels.fyi/blog/openai-compensation.html" target="_blank" rel="noreferrer noopener">novel financial incentive</a> called Profit Participation Units (PPU), which is meant to provide employees with benefits from the company's potential financial upside.</p>

<p>That&#8217;s split up over a $300,000 base salary and $625,000 in OpenAI&#8217;s equivalent of stock compensation, a <a href="https://www.levels.fyi/blog/openai-compensation.html" target="_blank" rel="noreferrer noopener">novel financial incentive</a> called Profit Participation Units (PPU), which is meant to provide employees with benefits from the company&#8217;s potential financial upside.</p>

In the offer letters provided to Levels.fyi, the PPU grants are given a nominal value and generally vest evenly over four years. The total compensation data provided to Levels.fyi for OpenAI engineers ranged from $325,000 to $1.37 million.

<p>In the offer letters provided to Levels.fyi, the PPU grants are given a nominal value and generally vest evenly over four years. The total compensation data provided to Levels.fyi for OpenAI engineers ranged from $325,000 to $1.37 million.</p>

Levels.fyi was founded in 2017 to provide information on benefits, compensation and other job perks. It sells the data to users and employers, as well as services like resume review and consulting around compensation negotiation.

<p>Levels.fyi was founded in 2017 to provide information on benefits, compensation and other job perks. It sells the data to users and employers, as well as services like resume review and consulting around compensation negotiation.</p>

OpenAI did not respond to a request for comment on its compensation packages.

<p>OpenAI did not respond to a request for comment on its compensation packages.</p>

PPUs differ from stock options, which provide an opportunity to buy shares in an employer, as well as restricted stock units, which are stock-based compensation granted to employees at a certain date.

<p>PPUs differ from stock options, which provide an opportunity to buy shares in an employer, as well as restricted stock units, which are stock-based compensation granted to employees at a certain date.</p>

&#8220;In a way, PPUs kind of act like options because you have to overcome a threshold in order for them to have value,&#8221; said Josh Steinfeld, principal product strategist for equity management company Carta.&nbsp;

<p>"In a way, PPUs kind of act like options because you have to overcome a threshold in order for them to have value," said Josh Steinfeld, principal product strategist for equity management company Carta.&nbsp;</p>

<p>&#8220;In a way, PPUs kind of act like options because you have to overcome a threshold in order for them to have value,&#8221; said Josh Steinfeld, principal product strategist for equity management company Carta.&nbsp;</p>

Steinfeld said that whereas stock options only have value if the stock price rises, PPUs only have value if the company is profitable above a certain threshold.

<p>Steinfeld said that whereas stock options only have value if the stock price rises, PPUs only have value if the company is profitable above a certain threshold.</p>

Part of the complexity is around how OpenAI employees can directly financially benefit from their PPUs, which translate to a percentage of future profits. The first option is to hold onto the PPUs until the company turns a significant profit—which, for an organization whose stated purpose is to spend billions to develop artificial general intelligence, could be years off.

<p>Part of the complexity is around how OpenAI employees can directly financially benefit from their PPUs, which translate to a percentage of future profits. The first option is to hold onto the PPUs until the company turns a significant profit—which, for an organization whose stated purpose is to spend billions to develop artificial general intelligence, could be years off.</p>

The second, more immediate option is to sell them off to a willing buyer. Because of OpenAI&#8217;s structure as a &#8220;capped profit&#8221; company, PPUs are currently capped at 10 times their original stated value.

<p>The second, more immediate option is to sell them off to a willing buyer. Because of OpenAI's structure as a "capped profit" company, PPUs are currently capped at 10 times their original stated value.</p>

<p>The second, more immediate option is to sell them off to a willing buyer. Because of OpenAI&#8217;s structure as a &#8220;capped profit&#8221; company, PPUs are currently capped at 10 times their original stated value.</p>

That means $1 million worth of PPUs grants can only be sold for up to $10 million. Additionally, OpenAI&#8217;s PPUs have a two-year lockup, meaning new hires have to hold onto their units for two years before selling them.

<p>That means $1 million worth of PPUs grants can only be sold for up to $10 million. Additionally, OpenAI's PPUs have a two-year lockup, meaning new hires have to hold onto their units for two years before selling them.</p>

<p>That means $1 million worth of PPUs grants can only be sold for up to $10 million. Additionally, OpenAI&#8217;s PPUs have a two-year lockup, meaning new hires have to hold onto their units for two years before selling them.</p>

&#8220;We&#8217;ve seen earlier this year in January; they&#8217;ve done a tender offer where employees were able to sell these shares,&#8221; said Levels.fyi CEO Zuhayeer Musa. &#8220;Right now, they&#8217;re sold as almost a promise of future value.&#8221;

<p>"We've seen earlier this year in January; they've done a tender offer where employees were able to sell these shares," said Levels.fyi CEO Zuhayeer Musa. "Right now, they're sold as almost a promise of future value."</p>

<p>&#8220;We&#8217;ve seen earlier this year in January; they&#8217;ve done a tender offer where employees were able to sell these shares,&#8221; said Levels.fyi CEO Zuhayeer Musa. &#8220;Right now, they&#8217;re sold as almost a promise of future value.&#8221;</p>

Musa said OpenAI&#8217;s system is the first example he knows of the use of PPUs at scale in the tech industry. He added that the organization has also made high base salary offers in comparison with the broader market. Research from Levels.fyi showed that the median compensation for AI-focused software engineers in the Bay Area is around $300,000.

<p>Musa said OpenAI's system is the first example he knows of the use of PPUs at scale in the tech industry. He added that the organization has also made high base salary offers in comparison with the broader market. Research from Levels.fyi showed that the median compensation for AI-focused software engineers in the Bay Area is around $300,000.</p>

<p>Musa said OpenAI&#8217;s system is the first example he knows of the use of PPUs at scale in the tech industry. He added that the organization has also made high base salary offers in comparison with the broader market. Research from Levels.fyi showed that the median compensation for AI-focused software engineers in the Bay Area is around $300,000.</p>

The instruments are broadly similar to what&#8217;s known as Profit Incentive Units, which have been widely used among fund managers in the private equity space, and increasingly for the management of private equity portfolio companies, according to Zahava Blumenthal, a senior counsel at Cohen &amp; Buckmann specializing in executive compensation and employee benefits.

<p>The instruments are broadly similar to what's known as Profit Incentive Units, which have been widely used among fund managers in the private equity space, and increasingly for the management of private equity portfolio companies, according to Zahava Blumenthal, a senior counsel at Cohen &amp; Buckmann specializing in executive compensation and employee benefits.</p>

<p>The instruments are broadly similar to what&#8217;s known as Profit Incentive Units, which have been widely used among fund managers in the private equity space, and increasingly for the management of private equity portfolio companies, according to Zahava Blumenthal, a senior counsel at Cohen &amp; Buckmann specializing in executive compensation and employee benefits.</p>

This is in part because the profits interests are granted tax-free. The only tax PPUs are subject to is when the profits are realized or the units are sold.

<p>This is in part because the profits interests are granted tax-free. The only tax PPUs are subject to is when the profits are realized or the units are sold.</p>

&#8220;Plus, as opposed to options, profits interest is a little bit easier because there&#8217;s no expiration date and no exercise mechanism,&#8221; Blumenthal said.

<p>"Plus, as opposed to options, profits interest is a little bit easier because there's no expiration date and no exercise mechanism," Blumenthal said.</p>

<p>&#8220;Plus, as opposed to options, profits interest is a little bit easier because there&#8217;s no expiration date and no exercise mechanism,&#8221; Blumenthal said.</p>

Part of OpenAI&#8217;s reliance on PPUs is because of its founding structure as a nonprofit. In 2019, the company formed OpenAI LP, which allowed it to raise more capital from investors and provide what it termed a &#8220;capped return&#8221; to employees.

<p>Part of OpenAI's reliance on PPUs is because of its founding structure as a nonprofit. In 2019, the company formed OpenAI LP, which allowed it to raise more capital from investors and provide what it termed a "capped return" to employees.</p>

<p>Part of OpenAI&#8217;s reliance on PPUs is because of its founding structure as a nonprofit. In 2019, the company formed OpenAI LP, which allowed it to raise more capital from investors and provide what it termed a &#8220;capped return&#8221; to employees.</p>

Whereas most startups are structured as C Corporations—which allow them to sell equity—utilizing PPUs allows OpenAI to provide comparable incentive packages within its corporate structure.

<p>Whereas most startups are structured as C Corporations—which allow them to sell equity—utilizing PPUs allows OpenAI to provide comparable incentive packages within its corporate structure.</p>

Experts across the board generally agree that while this system allows OpenAI recruiters to remain competitive with its big tech rivals, it&#8217;s likely not an approach many other startups will take on because of OpenAI&#8217;s unique structure. But the tactic has allowed the company to remain competitive in an increasingly tight labor market for engineers focused on AI.

<p>Experts across the board generally agree that while this system allows OpenAI recruiters to remain competitive with its big tech rivals, it's likely not an approach many other startups will take on because of OpenAI's unique structure. But the tactic has allowed the company to remain competitive in an increasingly tight labor market for engineers focused on AI.</p>

<p>Experts across the board generally agree that while this system allows OpenAI recruiters to remain competitive with its big tech rivals, it&#8217;s likely not an approach many other startups will take on because of OpenAI&#8217;s unique structure. But the tactic has allowed the company to remain competitive in an increasingly tight labor market for engineers focused on AI.</p>

&#8220;Anytime you&#8217;re at a startup, and you&#8217;re trying to recruit talent or even working on a secondary market, you&#8217;re kind of trying to sell the dream, right?&#8221; Steinfeld said. &#8220;In some cases, that takes the form of equity, and in this case, it&#8217;s future profit interest.&#8221;

<p>"Anytime you're at a startup, and you're trying to recruit talent or even working on a secondary market, you're kind of trying to sell the dream, right?" Steinfeld said. "In some cases, that takes the form of equity, and in this case, it's future profit interest."</p>

<p>&#8220;Anytime you&#8217;re at a startup, and you&#8217;re trying to recruit talent or even working on a secondary market, you&#8217;re kind of trying to sell the dream, right?&#8221; Steinfeld said. &#8220;In some cases, that takes the form of equity, and in this case, it&#8217;s future profit interest.&#8221;</p>

The OpenAI engineers building ChatGPT are making crazy money

Joshua Bote

OpenAI CEO Sam Altman was ousted in a sudden boardroom knifing on Friday arising from a power struggle over the direction of the company behind ChatGPT.

<p>OpenAI CEO Sam Altman was ousted in a sudden boardroom knifing on Friday arising from a power struggle over the direction of the company behind ChatGPT.</p>

According to <a href="https://twitter.com/gdb" target="_blank" rel="noreferrer noopener">a tweet</a> from former OpenAI President Greg Brockman, Altman received a text on Thursday night from OpenAI Chief Scientist and fellow board member Ilya Sutskever, asking him to meet at noon Friday.

<p>According to <a href="https://twitter.com/gdb" target="_blank" rel="noreferrer noopener">a tweet</a> from former OpenAI President Greg Brockman, Altman received a text on Thursday night from OpenAI Chief Scientist and fellow board member Ilya Sutskever, asking him to meet at noon Friday.</p>

When Altman logged into the meeting, Brockman wrote, the entire OpenAI board was present—except for Brockman. Sutskever informed Altman he was being fired.&nbsp;

<p>When Altman logged into the meeting, Brockman wrote, the entire OpenAI board was present—except for Brockman. Sutskever informed Altman he was being fired.&nbsp;</p>

Brockman said that soon after, he had a call with the board, where he was informed that he would be removed from his board position and that Altman had been fired. Then, OpenAI published a blog post sharing the news of Altman’s ouster.&nbsp;

<p>Brockman said that soon after, he had a call with the board, where he was informed that he would be removed from his board position and that Altman had been fired. Then, OpenAI published a blog post sharing the news of Altman’s ouster.&nbsp;</p>

Brockman wrote that the only person on the management team who knew ahead of time was Chief Technology Officer Mira Murati, <a href="https://sfstandard.com/2023/11/17/sam-altman-openai-chatgpt-mira/">who was named interim CEO</a>.

Sam Altman fired as CEO of OpenAI, creator of ChatGPT

<p>Brockman wrote that the only person on the management team who knew ahead of time was Chief Technology Officer Mira Murati, <a href="https://sfstandard.com/2023/11/17/sam-altman-openai-chatgpt-mira/">who was named interim CEO</a>.</p>

“Sam and I are shocked and saddened by what the board did today,” Brockman wrote.

<p>“Sam and I are shocked and saddened by what the board did today,” Brockman wrote.</p>

Search Results for: artificial intelligence

What’s next for OpenAI, ChatGPT after Sam Altman’s ouster?

Five things we learned from our bare-all interview with Sam Altman

The OpenAI engineers building ChatGPT are making crazy money

How OpenAI CEO Sam Altman was fired by rival board members

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