OpenAI Made the Right Call Letting Go of Sam Altman
Even though OpenAI has both nonprofit and for-profit sides, there's one board that controls both, giving priority to the nonprofit side. Recently, there was some drama at OpenAI, and Sam Altman, a board member, was let go quite easily due to a unique board structure crafted by OpenAI. The motive behind this structure justified Altman's firing.
- OpenAI started as a nonprofit AI research company in 2015.
- OpenAI LP, a capped-profit company, was established in 2019.
- The board of directors sits at the top, overseeing both nonprofit and for-profit arms.
- The unique hierarchy places the nonprofit wing above profit generation, limiting investor influence.
- Altman's removal traced back to the nonprofit board's overarching authority.
- The intricate board setup made Altman's removal a smooth process.
- Lack of equity in the company limited Altman's power in critical decisions.
- Absence of protective measures like dual-class share structures.
- Unexpected rapid growth, especially after ChatGPT's launch, added to the company's challenges.
- A weak board structure exposed vulnerabilities in the world's leading AI company.
- The ousting of Altman serves as a costly lesson in corporate governance.