OpenAI investors are considering suing the companys board of directors How should we view the development of this matter?

Microsoft Supports OpenAI’s Collaboration with Sam, Employees' Favorability towards Sam is a Valuable Asset for OpenAI.

Microsoft’s CEO has recently been interviewed, and here is a machine translation of the interview transcript for you to read:

Emily: “I’d like to welcome our Bloomberg TV and radio audience as well as Microsoft CEO Sacha Nadella, who is joining us live.”

Emily: “Sacha, obviously, this has been a very fast and dramatic process in the past 72 to 48 hours. I want to start with the status of the match. Where are we now?”

Nadella: “OpenAI stated that they have hired a new CEO. We hear rumors that someone is making efforts to bring back Sam Altman. Please let us know the situation. Yes. Well, first of all, it’s great to be with you. You know, on Friday morning, we were very excited, determined, and confident about our innovation roadmap to bring the next generation of artificial intelligence to our customers. We felt great and capable of accomplishing that. We were working with OpenAI, we were working with Sam. This is exactly where I find myself on Monday afternoon because we thought we could, you know, be in a leading position in the next generation of AI technology. We continue to be committed to open AI and to Sam and Greg and the team. Oh, wherever they are. And you know, I think it’s amazing that Sam has chosen to work with us multiple times now. It’s really great.”

Emily: “I think the real question is, what Microsoft has in terms of capabilities across the technology stack that attracts outstanding talents like Sam, you know, people like Sam, you know, innovators like Sam, and we are excited about this when it comes to AI. Did you quickly hire Sam and Greg? We heard that Sam wanted to come back and investors want him to return to OpenAI. What are your thoughts on this?”

Nadella: “Yes, as I said, we really want to work with OpenAI, and we want to work with Sam. So, wherever Sam is, he is working with Microsoft, that was the case on Friday, and it continues to be the case today. We absolutely believe it will be the case tomorrow.”

Emily: “So, from their perspective, what conversations have you had with the current board of OpenAI? What’s the situation? Have you spoken with the new interim CEO, Emmett Shearer?”

Nadella: “Yes, I have had conversations with Emmett, and it’s one and the same thing. It’s not really any different from when we worked with Mira, who was the interim CEO, Sam was the CEO, and Emmett is the CEO. So, the message I want to convey is that Emmett is very clear that, hey, look, we are still very, very committed to OpenAI and its mission and roadmap, they can rely on us. And as I said, we are also very committed to Sam and Greg and others who want to join us, if they are not at OpenAI, or anyone at OpenAI who wants to go elsewhere. We want them to come to Microsoft and continue to work here and cooperate with OpenAI.”

Emily: “According to your knowledge, why was Sam fired? Did he engage in any illegal activities? Did the board give you a reason?”

Nadella: “Actually, no. For me, you know, as I said, we have a lot of confidence in Sam and his leadership team. I haven’t heard anything. You know, they haven’t put out anything internally at OpenAI, the board hasn’t talked about anything Sam has done, except for some communication breakdowns. And for me, you know, I am not directly with them, so nobody from their board has informed me of any issues. So, I have confidence in Sam and his leadership abilities. That’s why, you know, we want to welcome him to Microsoft.”

Emily: “Now, we understand that to support Sam Moment 2 OpenAI’s return, Microsoft wants to make some changes to the board and governance. The overall contract signed with OpenAI. So that things like this won’t happen again. What exactly are you looking for? For example, do you want a board seat? If not, what else?”

Nadella: “Yes, what I mean is, I think we definitely want some governance changes. So, they, you know, you know, surprises are bad. We just want to ensure that we can continue to work well together in a way that gets the job done. That’s all. The idea of sudden changes happening without any loop is not good. We will make sure that some necessary changes happen, so that we can continue to work with OpenAI.”

Emily: “So, how do you think about the role, you know, the advanced AI team that Sam and Greg will join and lead? Can you explain? Are they actually Microsoft employees now? Like, who are they working for?”

Nadella: “Yes, so they are both in the process of joining. Yes, I mean, the question is, you know, we have a wealth of AI expertise at this company. In fact, at last week’s Ignite conference, we talked about all the great work that OpenAI is doing on Azure and all the, you know, models and tools that we build around it. We also talked about all the open-source models on Azure, you know, Lama and Mistral and JS and everything, you know, and then you know, the fact is, we are not only the leaders in LLM, which we are working with OpenAI, but we are also leaders in small language models, with SLN or FI with Microsoft Research. So, I’m excited about creating another team that will be ambitious about cutting-edge advanced AI work, which excites Sam and Greg.”

In this long dialogue, I think there are two main points:

1. Microsoft will continue to support OpenAI.
2. Microsoft will cooperate with Sam Altman, regardless of his location.

I believe the second point is particularly important because it represents Microsoft’s high affirmation of Sam as an individual.

In fact, the reactions of OpenAI employees in these past few days can best demonstrate Sam’s character.

After he was fired, out of the approximately 750 employees, over 700 signed a joint letter requesting the dissolution of the current board and the return of Sam.

This guy is truly good to his colleagues.

The most valuable asset for OpenAI is actually this group of employees.

Their importance outweighs that of the shareholders.

OpenAI Dissolution Worries AI Practitioners

It was unimaginable that one day OpenAI would crumble from within.

Although OpenAI has transformed into CloseAI, which has disgusted many. Let’s just spectate without getting involved, but still wish OpenAI well. Without OpenAI, without ChatGPT, without DALLE, most AI practitioners would truly struggle to survive the previous AI winter. Everyone is still hoping that OpenAI will continue to prove the value of AI and secure their livelihoods.

The Board Points to Adam D’Angelo

The latest development has pointed to one of the directors: Adam D’Angelo.

Speculation:

It is possible that Poe, the AI robot product founded by Adam D’Angelo, will be replaced by the newly released GPTs. Adam, as a board member, did not inform GPTs in advance, causing dissatisfaction. Sam should not have kept it a secret, so it is believed that Sam lacks integrity. It seems that Ilya may also have disagreements with Sam, and has convinced Ilya to vote 4 to 2 to remove Sam and dismiss Greg.

Both employees and investors have already figured out the fundamental reason behind this, thus unanimously targeting the board.

OpenAI’s Penetration and Development at Microsoft

Now let’s have some fun, following the subsequent plot:

1. The new CEO has a hard time adapting to the company. Most of the employees either ignore the new CEO or directly follow Ultraman and transfer to Microsoft. Ultraman sets up a new AI department at Microsoft.

2. The new CEO doesn’t last long and nobody wants to work under them. All the blame falls on Ilya Sutskever, and Microsoft’s support for OpenAI decreases.

3. Ilya Sutskever finally succumbs to the pressure and leaves the board. Eventually, he becomes marginalized and ultimately leaves OpenAI.

4. At this point, OpenAI is left without anyone steering the ship. The other co-founders also struggle to hold their ground. So, everyone ponders and eventually invites Ultraman back or merges with Microsoft’s AI department led by Ultraman. The ultimate outcome is the return of the Ultraman champion.

Do you think this is the end? No, No, No……

5. Without Ilya, ChatGPT remains forever stuck at its current version. Although there are various iterations and version updates afterwards, people realize there isn’t much difference compared to the current version. As a result, everyone starts questioning whether the large-scale model is the correct path to achieve general artificial intelligence.

6. With ChatGPT being stagnant, major investors lose patience. Consequently, productization, monetization, and profitability become the main tasks for OpenAI. You will see more and more Microsoft products embedding various ChatGPT technologies, and the openness of the ChatGPT public interface will continue to shrink. This is exactly the outcome that the major investor Microsoft desires.

7. After a few years, nobody discusses ChatGPT anymore. People are more focused on the AI in Microsoft’s products. In the end, OpenAI’s position at Microsoft is similar to Google Brain’s position at Google. Its technology permeates through various products, but there won’t be a singular focus on one specific field anymore.

“Board Dissolution, Altman and Brockman Return to OpenAI”

I feel that the result of this farce is the dissolution of the board, with Sam Altman and Greg Brockman returning to OpenAI.

Although Altman, Brockman, and their team announced that they would join Microsoft to lead a new AI research team.

However, according to multiple sources, as reported earlier today, Sam Altman has not yet appeared in Microsoft’s company directory.

This is because Microsoft’s human resources and onboarding processes are not designed for 24-hour urgent transactions, and Microsoft has not provided any detailed information about appointments to employees in any internal memorandum. If Altman fully joins Microsoft, he will hold the title of CEO within Microsoft.

In addition, according to reports from foreign media: Microsoft CEO Satya Nadella, in interviews with CNBC and Bloomberg TV, also seems uncertain: Where will Sam Altman choose to serve as CEO? Microsoft or OpenAI.

More information:

The Necessity of Disassembling OpenAI

From a global industry perspective, the disassembling of OpenAI is necessary in order to maximize the benefits of the human community. Currently, OpenAI is essentially a monopoly, and when external competition is unable to threaten its survival, internal conflicts cannot be stopped.

OpenAI’s innovative equity structure theoretically makes all of humanity ultimately responsible and the ultimate beneficiaries. In other words, all employees are just working for the greater good, without any individual interests. This means that there is essentially no ultimate leader.

If OpenAI were to be disassembled, its employees would be dispersed globally. Some could start their own ventures, others could join organizations similar to the “Beggar’s Sect” and become elder members. In short, everyone except OpenAI itself would benefit. This would intensify global competition, accelerate the influx of capital, increase the mobility of personnel, and accelerate technological advancements, bringing a glimmer of hope to the chaotic year of 2023.

Furthermore, even if Microsoft were able to absorb such a large number of people in the short term, in the long run (within six months), personnel mobility would still intensify.

Historically, we can refer to examples such as Fairchild Semiconductor and Bell Labs to see how the global industrial landscape and the speed of technological advancement changed after their employees left.

Therefore, there is a strong call for the disassembling of OpenAI.

Internal Leadership Dispute at OpenAI

The biggest issue in this matter is not the removal of OpenAI CEO Sam Altman.

The biggest problem is that the Chief Scientist, Ilya Sutskever, was able to exert complete control over the board of directors and remove the CEO. And this happened not because the CEO made any mistakes, but simply because the two sides had different ideas about the future direction of AI. Ilya believes that we should be cautious about the impact of artificial intelligence on human society, while Altman believes that prioritizing the improvement of AI performance is more important.

For most employees at OpenAI, this situation is completely out of control and they are extremely upset, empathetic, and even angry!

In my opinion, among the employees who have signed against the board of directors, there are actually not many die-hard loyalists of Altman. They aren’t strongly supporting or agreeing with Altman himself, but are simply opposing Ilya and the board’s arrogant behavior of removing people.

How did a team formed for ideals suddenly become a one-man dictatorship under Ilya? Is there any justice in this? Is there any rule of law?

If this is to be tolerated, does it mean that in the future, any employee who holds a different opinion from Ilya will have to consider whether they will be kicked out by him?

We must remember that OpenAI was originally a nonprofit open-source organization, sustained solely by donations and contributions. Many contributors don’t even receive a salary. Even though Ilya may have made the greatest contribution to the project, why does he have the right to turn the entire project into his one-man show? Disregarding other contributors as if they were nothing?

Isn’t this dictatorial, tyrannical, and a return to feudalism?

Can OpenAI really be achieved solely by Ilya?

What’s even more ridiculous is Microsoft. They invested hundreds of billions, but didn’t even get a seat on the board. Microsoft’s intention was initially very clear and open-minded: “We won’t interfere with your team’s decision-making.”

But Microsoft never expected that a team driven by ideals could deteriorate and corrupt so quickly!

By voluntarily abandoning its seat on the board, Microsoft has become an accomplice to Ilya’s tyrannical rule!

Now, Microsoft needs to correct this situation, even if it is difficult to do anything to Ilya due to his personal abilities. At the very least, Microsoft should reclaim control of OpenAI’s board of directors to prevent similar foolish internal conflicts from happening again.

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In fact, Ilya didn’t need to make the situation this way at all. His concerns about the future development of artificial intelligence are meaningful, but this meaning should not be imposed within OpenAI. Compared to its competitors, OpenAI is not significantly ahead. OpenAI’s lead is only about 2-3 years. In this context, Altman’s strategy of upgrading AI capabilities before managing AI direction is actually not a problem.

What Ilya should do is use his influence to promote the establishment of a third-party organization to supervise AI development, rather than unilaterally slowing down the research and development speed of OpenAI. This approach will only allow competitors to catch up.

One can only say that Ilya’s decision was truly foolish! Now he has not only offended the major shareholder Microsoft, making them rethink whether their past hands-off supervision was appropriate, but he has also offended the majority of employees, pushing many initially neutral employees to the side of the opponents. In the end, it is unlikely that he will achieve his original goal. This is a clear example of a technical talent getting involved in politics and making a mess of things.

OpenAI to lose most of its employees

OpenAI currently has 777 employees, and over 700 individuals have issued a joint statement, saying that if Ultraman does not come back, they will leave together with him.

So, what will be left of this company?

Breaking through the Obstacle of the Board of Directors

Microsoft: Instead of continuing to invest, why not swallow the team? With just over 700 people, can’t I afford to buy them?

The board of directors disagrees? Just sort out the board of directors.

Analysis of the CEO Layoff Incident

In order for a company to grow and become strong, its leader must not be solely focused on technology. If pure technical personnel interfere with the company’s operations, the outcome is generally either failure or acquisition. Technology giants who transition into management must understand technology, but they cannot continue to work on frontline development.

Well-known examples include Lei Jun of Xiaomi and Cai Haoyu of miHoYo, both of whom have a technical background but were “forced” into management. One has achieved great success, while the other has retired and returned to technology.

Ultraman follows the same path as Elon Musk. They understand technology, but they are not nerds or geeks. They are more like business leaders with strong personal charisma. In this layoff incident, the company had fewer than 1000 employees, and over 700 people signed a joint letter demanding his return, threatening to resign otherwise. There are very few business leaders in the world who have such internal rallying power.

Even the investors are dissatisfied and want to sue the board…

This shows that everyone recognizes this CEO, whether it’s the prospects or the future. Sam has given the team and investors extreme confidence to persevere. Once he leaves, the confidence disappears.

In contrast, there’s Ilya, a technical giant who frequently conducts strange rituals in the company. On the one hand, he opens the Pandora’s box, and on the other hand, he fears the future chaos caused by AI and wants to restrict the commercialization of AI. Then he collaborates with the board to get rid of Sam, and later signs an open letter expressing regret for driving Sam away.

This kind of person can’t accomplish anything significant.

Most people are profit-driven. Don’t idealize the world too much, shouting that you want to benefit humanity, promote open source, and not make money. There is every reason to believe that this time, getting rid of Sam was possibly the board’s collaboration with Microsoft in a staged drama. Do you really think Microsoft invested so much money without interfering? Was it really for philanthropy? Now that Sam is under Microsoft, the next step is to further undermine OpenAI and gradually absorb the employees who leave OpenAI, completing the transition from open source to closed source.

They gave you money upfront, and you were free to do whatever you wanted until a certain point when I made a move. If you can’t afford it, I’ll undermine you from within.

Don’t accuse me of conspiracy theory. Microsoft’s acquisition of ZeniMax may seem like a lot of money, but think about it, if ZeniMax wasn’t performing so poorly over the past few years, Microsoft would have to spend several tens of billions more to afford the acquisition. Think about the various actions taken by Bobby Kotick when he was CEO of Activision Blizzard. Wasn’t it unusual for them to persist in doing things they knew would incite criticism? And look at the jubilation of the Activision Blizzard employees after being acquired by Microsoft, as if the entire company had intentionally performed poorly and waited for Microsoft’s acquisition…

Now think about what happened with OpenAI, employee protests, investors considering lawsuits; it is clear that the situation is heading downhill. Do you think the board didn’t anticipate these consequences from the beginning? If they truly couldn’t foresee it, then they are to blame for their incompetence. If they knew it would turn out this way, then the board is truly malicious.