Sam Altman vs. OpenAI Board: What Everybody is Missing

Sam Altman was recently fired by the board of OpenAI. Most analysts report this as a story of a good boss vs. a cavalier board. But not so fast. Here's what everybody is missing.

Sam Altman, arguably the biggest name in artificial intelligence (AI), was recently called a servant leader. He led one of the most innovative and rapidly growing tech companies in the world. So it was a huge surprise when he was fired from his CEO role at OpenAI Friday. The explanation for his termination was vague and 95% of the company’s employees threatened to follow their CEO. Therefore, most analysts report this as a story of a good boss vs. a cavalier board. Not so fast! Here’s what they all seem to be missing about the situation…

OpenAI’s Unique Structure

AI technology has the potential to help or harm humanity in equally shocking ways. For that reason, OpenAI was created with a very unique corporate structure. There is a nonprofit 501(c)(3) overseeing a capped profit arm. Simply put: the overarching body and board of the nonprofit is responsible for ensuring the new technology is developed in a safe manner that benefits humanity. This could include limiting the speed of growth to ensure careful study and guidelines. That oversight conflicts with the desire of many investors.

Board Responsibility

If the OpenAI board believes the capped profit arm is being irresponsible or unsafe with its development of the technology, they have a responsibility to take action. That action could include everything up to and including terminating leaders who support such behaviors.

What Insiders Say

When there is a dramatic show of support for a CEO, we often find great servant leaders. The 95% of OpenAI employees (more than 740 people) that threatened to leave the company, if Altman was not reinstated, leave most thinking he is a great leader. Before we go crowning Altman a great servant leader though, we need to look inside the organization. That’s exactly what The Atlantic did. What she uncovered was a massive power struggle. One side is primarily motivated by safety, the other, by profitability. Based on her findings, journalist Karen Hao summarized the struggle inside the organization like this: 

Ultimately, both the techno-optimists and the other faction have the same endgame: They’re both trying to control the technology. One is using morality as a cover for that, and the other one is using capitalism as its banner. But both are saying This is for the good of humanity, and they’re using that as their enabling mantra for a seizure of power and control.

A Better Approach

From the outside, it seems the OpenAI board did not handle this situation well. A better approach would have included more open communications, better alignment of supporters, and greater efforts toward realigning Altman. However, if Altman has the investors on his side, which is clearly the case now, the Board may have decided this abrupt action was their only option to secure the technology for safest development. This is what most analysts and reporting seems to miss.

What’s Next?

It will be interesting to see what new information is revealed. In the meantime, don’t jump to defend someone simply because they were called a servant leader and have the support of investors. Remember, servant leadership requires the leader to serve all stakeholders. When a leader becomes too focused on a single stakeholder group, such as investors, at the exclusion of others, bad things happen.

Maybe that’s what OpenAI’s board has been concerned about all along.

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