OpenAI – corporate drama unleashed
OpenAI, the firm behind ChatGPT, was in uproar as its boss was booted out, briefly snapped up by Microsoft and then brought back again.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Twice daily
MoneyWeek
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Four times a week
Look After My Bills
Sign up to our free money-saving newsletter, filled with the latest news and expert advice to help you find the best tips and deals for managing your bills. Start saving today!
The decision by the board of OpenAI to fire CEO Sam Altman “triggered a Silicon Valley corporate drama”, says Dan Milmo in The Guardian. He is the CEO of the company behind the ChatGPT artificial intelligence chatbot and “the figurehead of a revolution in AI that has enthralled the public and investors but also alarmed industry insiders and experts”.
With OpenAI’s staff in “uproar” and threatening to quit, investors, led by Microsoft, attempted to reinstate Altman, only for Microsoft to decide a few days later to hire him to lead a new AI division.
There then followed a “dramatic reversal”, says the Financial Times. Just two days later, it was announced that Altman would return as CEO of the firm that he co-founded. He will be under the supervision of a new board of directors, including former US Treasury Secretary Larry Summers and former Salesforce CEO Bret Taylor. This draws a line under a stand-off that has seen almost all of the company’s workers line up against the original four-person board.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
OpenAI's unusual corporate governance structure
Rumours and speculation relating to the sacking abound, says James Titcomb in The Telegraph. However, the key reason is that while the main part of the start-up, originally a non-profit, was moved to a profit-making subsidiary that could give employees shares and raise money, the original board still has ultimate control. This created an inevitable conflict between the board, which has “become increasingly focused on the risks arising from a commercial influence over AI” and Altman, who concentrated on “growing the technology at pace”.
The drama erupted at a key moment for the company. At the beginning of November, ChatGPT hit a milestone of 100 million weekly users and the company had been working on plans to sell shares at an $86bn valuation, as Lex pointed out in the FT. But with or without Altman, the company’s valuation looks a stretch, says Anita Ramaswamy on Breakingviews. It’s not just the governance structure, but the fact that its AI still needs work.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Related articles
- How to invest in ChatGPT and other AI tech changing the world
- 3 ways to play the artificial intelligence boom
- The jury's out on the AI summit at Bletchley Park
-
Should you buy an active ETF?ETFs are often mischaracterised as passive products, but they can be a convenient way to add active management to your portfolio
-
Power up your pension before 5 April – easy ways to save before the tax year endWith the end of the tax year looming, pension savers currently have a window to review and maximise what’s going into their retirement funds – we look at how
-
Three key winners from the AI boom and beyondJames Harries of the Trojan Global Income Fund picks three promising stocks that transcend the hype of the AI boom
-
RTX Corporation is a strong player in a growth marketRTX Corporation’s order backlog means investors can look forward to years of rising profits
-
Profit from MSCI – the backbone of financeAs an index provider, MSCI is a key part of the global financial system. Its shares look cheap
-
'AI is the real deal – it will change our world in more ways than we can imagine'Interview Rob Arnott of Research Affiliates talks to Andrew Van Sickle about the AI bubble, the impact of tariffs on inflation and the outlook for gold and China
-
Should investors join the rush for venture-capital trusts?Opinion Investors hoping to buy into venture-capital trusts before the end of the tax year may need to move quickly, says David Prosser
-
Food and drinks giants seek an image makeover – here's what they're doingThe global food and drink industry is having to change pace to retain its famous appeal for defensive investors. Who will be the winners?
-
Barings Emerging Europe trust bounces back from Russia woesBarings Emerging Europe trust has added the Middle East and Africa to its mandate, delivering a strong recovery, says Max King
-
How a dovish Federal Reserve could affect youTrump’s pick for the US Federal Reserve is not so much of a yes-man as his rival, but interest rates will still come down quickly, says Cris Sholto Heaton
