The recent removal of OpenAI CEO Sam Altman has caused shock and dissatisfaction among the company’s employees. Over 90% of the employees signed a letter threatening to leave OpenAI if the board did not resign and reinstate Altman. It appears that Altman has since been recruited by Microsoft, along with other key former staff members.
The employees had faith in Altman and his vision, and they were unhappy with how easily the board could dismiss him. This raises the question of whether their upset is justified and whether the board overstepped its boundaries or exercised a necessary check on power.
The concept of a “genius founder” is deeply ingrained in Silicon Valley culture. Figures like Steve Jobs, Elon Musk, Mark Zuckerberg, Sergey Brin, and Larry Page are celebrated as geniuses who achieved extraordinary feats due to their innate brilliance. This founder narrative is often seen as essential for tech startups in Silicon Valley, making the company more marketable and structuring power within the organization.
Throughout history, founder mythologies have been used to explain and justify hierarchies of power. They provide a way to understand the current distribution of power and unite people around a central figure. The events at OpenAI challenge this natural order in Silicon Valley.
Altman’s removal is surprising considering his status as a superstar “genius founder.” Tech company founders often create structures to solidify their control over their companies. For example, Google’s restructuring into Alphabet included different share classes that ensured founders Larry Page and Sergey Brin would retain control while benefiting financially from the company’s success.
In contrast, OpenAI’s corporate structure made Altman more vulnerable to losing control. As a non-profit initially, OpenAI has a unique structure with a non-profit entity overseen by a board of directors. To attract investors, OpenAI also has a for-profit subsidiary called OpenAI Global, which Microsoft has invested billions of dollars into. Altman held no equity in OpenAI Global and was accountable to the other board members.
The board’s decision to remove Altman as CEO was based on an internal investigation that claimed he had not been consistently candid with the board, leading to a loss of trust in his leadership.
Regardless of the specifics and the emotional impact on OpenAI’s employees, Altman’s removal could be seen as a victory for corporate accountability. There have been numerous examples of founders who betrayed the trust of their employees and investors, such as Elizabeth Holmes of Theranos, Adam Neumann of WeWork, Trevor Milton of Nikola, and Sam Bankman-Fried of FTX.
Silicon Valley needs more accountability, especially as tech entrepreneurs operate at the intersection of risk, hype, and boundary-pushing. The technologies produced by these companies have significant impacts on society, and the power they wield has prompted regulators to address big tech’s market power. Lina Khan, the chair of the United States Federal Trade Commission, is focused on this issue.
In an age of AI and big tech, blind faith in leaders is no longer sufficient. Public oversight and transparency are crucial. OpenAI’s unusual company structure may be something to consider if the collective good is a priority.
The potential poaching of OpenAI’s talent by Microsoft will likely be closely monitored by regulators like Lina Khan, who are concerned about the competitive effects of big tech companies acquiring innovative startups.
Overall, the events at OpenAI raise important questions about power, accountability, and the role of founders in Silicon Valley.