Sam Altman’s Ouster at OpenAI Scrambles the A.I. Power Dynamic

What next for an A.I. leader?

Over just three days, the landscape for artificial intelligence has been reshaped drastically. On Friday morning, Sam Altman was the C.E.O. of OpenAI, the leader in commercializing generative A.I. through ChatGPT. By Monday, he had not only been fired by his board — he had also joined Microsoft, the start-up’s biggest backer.

What happened is more than just a juicy corporate tale. At stake are the fates of major A.I. players like OpenAI and Microsoft. And it’s a reminder of serious divides within the A.I. community — and questions about how that industry is led.

A recap:

• OpenAI’s board fired Altman for not being “consistently candid.” Greg Brockman, another co-founder, was stripped of his chairman title and quit. The two began pitching a new A.I. start-up that evening.

• Investors in OpenAI — who have little power because of the company’s quirky corporate governance structure (more on that below) — began plotting a way for Altman to return, with the encouragement of OpenAI executives. Altman returned to the office, marking the moment with a selfie that went viral.

• Talks to bring Altman back broke down, with OpenAI’s board eventually naming Emmett Shear, the former C.E.O. of the streaming service Twitch, as its interim leader, replacing Mira Murati, the company’s C.T.O. who had replaced Altman.

• Altman and Brockman are joining Microsoft to lead a new advanced research lab, and are likely to hire several former colleagues. (Some OpenAI employees workers wrote on X that “OpenAI is nothing without its people,” posts that Altman liked.)

OpenAI’s future is much murkier. According to The Information, rivals are looking to pick off workers. And a tender offer for OpenAI shares held by employees at an $86 billion valuation appears in doubt.

It’s unclear how much OpenAI’s strategy will change. Altman disagreed with board members — particularly Ilya Sutskever, another co-founder and the company’s chief scientist — about how quickly to commercialize new technologies. Sutskever, like Elon Musk and the A.I. pioneer Geoffrey Hinton, is deeply worried that A.I. could threaten humanity, and may now push the company to move much more slowly.

Microsoft is racing to protect its A.I. edge. The tech giant, which has invested billions in OpenAI, pushed over the weekend to reinstall Altman, with Satya Nadella, Microsoft’s C.E.O., reportedly deeply involved in the talks.

Although Nadella said that his company remained “committed” to OpenAI, he made clear that he would provide Altman and Brockman “with the resources needed for their success.”

One big question: Who watches the watchers? The drama has revealed just how uncertain oversight of this hugely consequential technology is. OpenAI has an unusual structure, in which a nonprofit entity controls the for-profit organization that produced ChatGPT. Observers, including the tech executive Marissa Mayer and the investor Dan Loeb, highlighted this setup as a big problem: It gives a nonprofit board with little financial stake in the company and little experience in corporate governance power over commercial investors.

“How much of the future of OpenAI technology is going to be hamstrung because they made the mistake in the first place of placing that I.P. and that tech within the public charity in the first place,” Scott Syphax, a corporate governance expert who also ran a nonprofit that created a for-profit business, told DealBook.

What’s next for A.I.? OpenAI may lose lots of employees and struggle to raise more funds. Meanwhile, its once dominant lead may have evaporated with Microsoft and Google now vying for leadership of the industry.

HERE’S WHAT’S HAPPENING

Argentina elects a far-right libertarian as president. Javier Milei, an economist and former television personality who has drawn comparisons to Donald Trump, won a decisive victory on Sunday. Milei has vowed to take a “chainsaw” to the state by slashing public spending and to replace the peso with the dollar in a bid to cut inflation.

President Biden’s former chief of staff joins Airbnb. Ron Klain will become the home-rental giant’s chief legal officer, months after stepping down from the White House. Klain, a longtime aide to Biden, will bring decades of connections in Washington to Airbnb — but his appointment may close the door to his joining Biden’s re-election campaign, something speculated about in Democratic circles.

Bayer shares tumble to a 12-year low after drug trial is stopped. The German pharmaceutical giant announced on Sunday that it would halt a trial of Oceanic, a blood-thinning drug that it hoped would be a big moneymaker. That followed a legal setback on Friday, when a Missouri jury ordered the company to pay $1.56 billion in damages related to its Roundup weedkiller.

Musk tries to clear the air

Elon Musk is gearing up for another fight, threatening to sue critics and big advertisers on X over allegations of antisemitism and calling reports that he himself is an antisemite “bogus.”

The tech billionaire’s assertions were met by an outpouring of support from his followers on the social media platform, but the controversy has piled the pressure on his C.E.O. as the wider business community contends with the rise of antisemitism in the wake of the Israel-Hamas war.

More brands have paused ad spending on X. Apple, Sony, Disney and others followed IBM in pulling ads from the platform after Musk endorsed a white nationalist conspiracy theory that accused Jewish people of “dialectical hatred against whites.”

A number of marketing leaders have called on Linda Yaccarino, the social network’s C.E.O. and a former advertising executive who was brought in to soothe relations with big brands, to quit, Forbes reported. (The lobbying reportedly started while Yaccarino was at her daughter’s wedding on Saturday.) For now, she’s pushed back against those calls.

Yaccarino had persuaded many advertisers to return in recent months. And she has insisted that X’s record of weeding out hate speech was getting better after Musk scythed through the company’s content moderation team after buying Twitter last year.

Following Musk’s controversial post last week, she posted that the platform “has been extremely clear about our effort to combat antisemitism and discrimination. There’s absolutely no place for it anywhere in the world.”

Musk has sought to defend himself, posting overnight to his 163 million followers that “I wish only the best for humanity and a prosperous and exciting future for all.”

The uproar has put Musk’s polarizing effect on the business community in full view. Bill Ackman, the billionaire investor who has taken his alma mater, Harvard, to task as not doing enough to protect Jewish students from recent antisemitic threats, threw his support behind Musk this weekend. (Ackman has a small stake in X through a foundation connected to his hedge fund, Pershing Square. He told CNBC last month that he would be interested in taking the social media platform public through a new investment vehicle he recently set up.)

What’s next? On Friday, Musk had threatened to file “a thermonuclear lawsuit against Media Matters and ALL those who colluded in this fraudulent attack on our company,” referring to the left-leaning campaign group that last week pointed out how ads for big brands were appearing next to antisemitic content on X. The lawsuit, Musk said, would be filed “the split second court opens on Monday.”

Cruise’s C.E.O. runs out of road

It was a rough weekend for some of Silicon Valley’s tech founders.

Kyle Vogt, the C.E.O. and a co-founder of Cruise, quit on Sunday, weeks after General Motors’ self-driving car unit halted driverless taxi operations nationwide following a number of crashes. It is the latest setback for the start-up after California regulators revoked its license to operate in the state and accused the company of not properly sharing information about an accident last month.

Vogt was one of the industry’s pioneers. G.M. acquired Cruise for $1 billion in 2016, three years after Vogt started the company, promising that driverless cars would cut road deaths.

Cruise is racing with Tesla and Waymo, Alphabet’s self-driving car unit, to be the leader in robot taxis. The company hoped to achieve $1 billion in revenues by 2025.

An Oct. 2 accident threw that ambition into doubt. A pedestrian collided with a car and was flung into the path of a Cruise taxi. The Cruise vehicle ran her over and dragged her for 20 feet before pulling over. California’s Department of Motor Vehicles said the company had initially shared footage showing the car braking after hitting the pedestrian. But officials later learned that the person had been dragged.

The D.M.V. ordered Cruise to shut down its operations on Oct. 24. The regulator had met with the company abut 50 times this year over scores of incidents. Cruise was also testing its robo-taxi services in Phoenix and Austin, Texas.

Cruise’s issues are hanging over the self-driving sector. The industry worries that regulators could step up enforcement and scrutiny. That could hit companies including Aurora, Amazon’s Zoox, and Waymo, which has been operating self-driving taxis in San Francisco largely without incident.

The week ahead

It’s a holiday-shortened week in the U.S., but there’s plenty going on. Here’s what to look out for.

Tuesday: The Fed is set to release the minutes from its most recent rate-setting meeting. The report could hold clues into the central bank’s outlook on borrowing costs next year.

Elsewhere, Wall Street will be closely watching the latest quarterly results for Nvidia, the leader in A.I. chips. Lowe’s also reports.

Wednesday: Deere reports earnings.

Thursday: U.S. markets are closed for Thanksgiving.

Friday: It’s Black Friday, and economists are wondering about the mood of the shopper. Last week, the Commerce Department reported that retail sales had dipped last month, a sign that consumers are beginning to pull back on spending.

THE SPEED READ

Deals

Policy

Best of the rest

• Meta has split up the team responsible for creating safeguards for its A.I. products. (The Information)

• A former junior banker at Centerview Partners sued the investment bank over her dismissal for sleep requirements that she said were necessary because of her mental illness diagnoses. (FT)

• Rosalynn Carter, the wife of Jimmy Carter and one of the most politically active first ladies since Eleanor Roosevelt, died on Sunday. She was 96. (NYT)

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