Passion around OpenAI continues: Investors are preparing lawsuit against board of directors, and 90% of employees threatening to quit

November 21, 2023  10:49

The passion around OpenAI continues unabated. After the company's board fired founder Sam Altman, followed by board chairman Greg Brockman, more than 90% of employees signed an open letter demanding the resignation of the board of directors - otherwise they threatened to quit and go to Microsoft . The most interesting thing is that the letter also bears the signature of Ilya Sutskever, who, in fact, is at the head of the “coup” in the company.

Moreover, OpenAI investors are considering filing a lawsuit against the board of directors.

Investors are unhappy

According to Reuters, some OpenAI investors intend to sue the company's board of directors for firing Sam Altman, which led to the dismissal of some other employees - and could lead to the dismissal of the majority. All this can have an extremely negative impact on the company's work, and investors can lose hundreds of millions of dollars.

According to the publication, potentially affected investors are currently consulting with lawyers to assess the prospects for this lawsuit.

Note that OpenAI's ownership structure is a little non-standard: the parent non-profit company OpenAI has quite serious powers in terms of business management, and the capital of the subsidiary commercial company is 49% owned by Microsoft Corporation, which has invested $20 billion in this business. Other investors and OpenAI employees control 49 % of the capital of a for-profit company, and the remaining 2% belongs to the parent non-profit structure.

Thanks to this structure, company employees have serious opportunities to put pressure on the board of directors - unlike venture investors who have invested in the company. At the same time, members of the company's board of directors bear limited responsibility for personnel decisions made. According to experts, it turns out that it will be difficult for OpenAI investors to win a potential lawsuit.

The open letter

Initially, 505 of the company's 770 employees signed an open letter threatening to resign from OpenAI unless the board of directors announced their resignations and reinstated Sam Altman and Greg Brockman. A little later, the letter was signed by more than 700 employees, that is, more than 90%.

It is interesting that among them was the coordinator of the coup in the company - the company’s chief researcher and member of the board of directors Ilya Sutskever.

Shortly before the letter was published, Sutskever wrote on the social network X:

I deeply regret my participation in the board's actions. I never intended to harm OpenAI. I love everything we've built together and I will do everything I can to reunite the company."

Many OpenAI employees have indicated their willingness to leave OpenAI if their terms are not met and to join Altman at Microsoft.

In the letter, employees demand not only the dismissal of the current board of directors (Ilya Sutskever, Adam D'Angelo, Helen Toner and Tasha McCauley), but also the appointment of two new independent leading board members - Bret Taylor (who is considered a technology industry veteran) and Will Hurd ( politician who previously served on the board of directors of OpenAI).

The letter reads:

To the Board of Directors at OpenAI,

OpenAI is the world’s leading AI company. We, the employees of OpenAI, have developed the best models and pushed the field to new frontiers. Our work on AI safety and governance shapes global norms. The products we built are used by millions of people around the world. Until now, the company we work for and cherish has never been in a stronger position.

The process through which you terminated Sam Altman and removed Greg Brockman from the board has jeopardized all of this work and undermined our mission and company. Your conduct has made it clear you did not have the competence to oversee OpenAI.

When we all unexpectedly learned of your decision, the leadership team of OpenAI acted swiftly to stabilize the company. They carefully listened to your concerns and tried to cooperate with you on all grounds. Despite many requests for specific facts for your allegations, you have never provided any written evidence. They also increasingly realized you were not capable of carrying out your duties, and were negotiating in bad faith.

The leadership team suggested that the most stabilizing path forward - the one that would best serve our mission, company, stakeholders, employees and the public - would be for you to resign and put in place a qualified board that could lead the company forward in stability.

Leadership worked with you around the clock to find a mutually agreeable outcome. Yet within two days of your initial decision, you again replaced interim CEO Mira Murati against the best interests of the company. You also informed the leadership team that allowing the company to be destroyed “would be consistent with the mission.”

Your actions have made it obvious that you are incapable of overseeing OpenAI. We are unable to work for or with people that lack competence, judgement and care for our mission and employees. We, the undersigned, may choose to resign from OpenAI and join the newly announced Microsoft subsidiary run by Sam Altman and Greg Brockman. Microsoft has assured us that there are positions for all OpenAI employees at this new subsidiary should we choose to join. We will take this step imminently, unless all current board members resign, and the board appoints two new lead independent directors, such as Bret Taylor and Will Hurd, and reinstates Sam Altman and Greg Brockman.

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