I’d expect a tough challenge ahead as msft/other stakeholders try to put guardrails in while dealing with the fact that whoever’s bright idea this coup was - is now in charge.
What a mess.
Pissing off all your stakeholders with a snap decision isn't great governance. Particularly egregious circumstances might make it necessary.
Finding something wrong might require action, but a board's responsibility is also to make the corrective action in a responsible manner that is in the organization's interests.
but the trust of the board completely braking down doesn't mean that e.g. MS doesn't trust or want him anymore as in the end the interest the board have to defend and the ones which stake holder like MS have might be in conflict
so even if it has negative consequences if it must be done it might be easier to get it done fast and then resolve the mess instead of giving other a chance to turn it into an even bigger mess
That very well may have happened here. It is important to consider that this is effectively an HR matter and that the results of employee investigations cannot be made public.
Here, there's been a statement that there's no malfeasance, too.
Maybe Ilya doesn't want to be at the forefront of AI building I guess. He probably thinks he can lead it better by not being at the table.
Or who knows.
So depending on the exact non-public reasons for the communication breaking down it might not be a disaster but the hybrid doing exactly what it was intended to do.
Now the real interesting question is how much MS must have been afraid to be technologically left behind to knowingly enter such a deal with such a huge investment?
To my eyes, and to many others, it appears the board is power-tripping. Also, OpenAI's unique structure means they have no checks on the board that an investor class would normally give.
It's difficult to envision a thriving future for OpenAI under these circumstances or a world in which they are a significant factor in AI policy. Their early market lead, still a considerable advantage, will not be sufficient to weather the storm brewed by the board's own actions. Losing their market leverage would mean ceding the influential role in shaping AI's future, potentially leaving the giants such as Microsoft, Google, Amazon, and others assuming control and steering the future course of AI, but without the creed to make AI "good."
It's so strange to hear this regarding a CEO, a single person, effectively going rogue against a company's charter, but then layoffs of tens, hundreds, and thousands of workers, on the basis of zero fault of their own, by these CEOs and boards are considered good governance.
The rank-and-file serfs don't matter, they're expendable and interchangeable. When Dear Leadership is shaken up, it's newsworthy. When ten thousand labourers are let go, it's just a statistic.
This is EXACTLY what late stage "political" companies are like. There is no rational way to decide who gets the window office vs. the internal office. Everything is "political"
Pointing out that modern capitalism is comprised of actors that have large structural similarities to failed communist government seems like more valuable comment than your shallow and dismissive response.
I'll try to expand on my previous comment without using the "C" word itself, prior programming seems to have triggered an emotional reaction there.
Here are some qualities that many (if not most) corporations seem to share:
- centralized power
- collective goals (Team A has an 18 month plan to deliver V18)
- top-down approach
- bureaucratic hierarchy
- collectivist ideology (down to "we're a family, we're all in it together, do it for the company")
- controlled expression (approved list of questions for the all-hands meeting, anyone?)
- resistance to change
- top-down reforms (vc / top brass reorgs)
- limited transparency
Does that sound like traits characteristic of capitalism, or more like spooky ivan papa bear, sickle and hammer stuff?
Where the similarities end is around ownership. In an (idealized) communist system, people own the means of production; in a corporate setting, everything is owned by the organization. Of course this is a key, essential, and critical difference, and it goes all the way back to maybe the 1600's when chartered corporations first appeared; but the roots of that reach even earlier, to the aristocracy disempowered by the rise of the merchant class in the middle ages.
The idea of parasitic Majority Shareholders siphoning off any benefits created by the collective efforts of individually irrelevant and easily replaceable Individual Contributors has been with us ever since. That the corporate structures would adopt the social organization aspects of a system that was created in direct response to their relentless exploitation, well, that's just irony of the highest caliber.
Yes, it is good governance to cut unproductive jobs.
There is no problem here then, is there
It definitely used to be considered as such. There has been a cultural shift over the last 40 years.
That usually means making money, but it's not a certainty that's what the primary purpose will be.
If cigarette companies could cause 5% less cancer by selling 5% fewer packs of cigarettes (resulting in 5% lower profits) do you believe they would do it?
You might say that companies have strayed from the Platonic ideal of a corporation and that cigarette companies have strayed from their “purpose” but the reality is that purely prosocial companies have never been the norm.
You might also suggest that the very fact that people are purchasing cigarettes demonstrates that they are providing “valuable” goods/services but this is to water down the definition of value to the point of meaninglessness.
The truth is that a corporation is a sort of alien entity that almost entirely operates to maximize profits. I say “almost” entirely because it is possible in extreme cases for their leadership to face personal responsibility, but it’s pretty rare.
http://www.antipope.org/charlie/blog-static/2010/12/invaders...
I think you mean "by providing anything anyone will pay for" in this universe you describe. There are a ton of companies that provide zero or even negative valuable services to society.
And what you describe is unbridled capitalism. That's not what most people consider viable. A company is not a logical entity that satisfies "if company, then capital at all costs", although there are the few (the super wealthy) that would like it to be that way. A company is part of a complex system and thus it needs to satisfy a wide variety of conditions.
And note that my comment is reacting to the idea that firing the CEO is some sort of crime against humanity.
Are you expecting them to reach out to Microsoft and ask "we're thinking of firing our CEO. How does that grab you?"
I don't think this is the type of thing you can really do by consulting outside groups.
Note that the non-profit doesn't have shareholders, but the effect is much the same because the two are linked closely together and you can't affect the non-profit in such a drastic way without also affecting the for-profit arm. So they just pointed the double barrelled shotgun at their feet and pulled the trigger, twice. It will take a massive effort to restore trust in the brand, both on the commercial side and on the side of the people working there.
For a normal board, this stakeholder check would have been a simple check with internal leadership on positioning.
Really, most organizations try to maintain at least some facade of predictability and transparency.
The OpenAI board should have known not to piss off Satya.
"AI safety" is a euphemism for "aligns with our interests." "Roko's basilisk" is nonsense science fiction babble.
Or people who are mentally deficient and actually believe in rokos basilisk and its ilk.
It is a 501(c)(3) even if they had all of the board members Open AI, Inc can not be run for MSFT benefit or for profit. A sympathetic board member might have tipped MSFT off about the firing ahead of time though.
This needs to shake out. Sam Altman was clearly not the best fit anymore. Thats the moral of the story.
Why are executives special? They aren’t. It’s a damn myth
Frankly, as it should. If you are going to take $10B from another organization and you nuke the CEO during market hours and then later it turns out that it was just an ordinary disagreement, then you should answer for that action.
On a Friday, no less. This is actually the kind of thing that can sink MSFT's apparent "first mover" advantage in the eyes of big money. OpenAI is now fractured, and whatever work they were going to be doing on tech is now going to be devoted to figuring out WTF to do with this mess the board just created all by themselves for no apparent reason.
The board has the power to dissolve itself, I am sure there(edit typo) are legal mechanisms for illegal acts, I think the IRS can revoke 501(c)(3) status but not dissolve, not sure if there are other mechanisms.
OpenAI might just show the world how the naive ideal we are not driven by profit but spending billions every year is never a good idea.
Those board has no stake in the company, on the other side means their have no accountability either. It is like they remote controlling the titanic, and who cares it crashes, because they are not on it.
Regardless, they made very stupid decisions now sabotaging interests and the company itself, brutally beheaded itself.
By firing the guy who founded Loopt?
I’m genuinely mystified, where does this theory come from. What makes this guy essential?
He elected himself to be the face of OpenAI
That is why he is now essential. He is the hinge of trust, and people believed his vision of OpenAI, as a company.
Ilya might be the science guy, but he 0 track record to run a company. And now he executes this badly planned coup, how would people trust him not to play such shticks in the future?
Arguing about semantics is useless
The board in a real way decides what the interests of the company are since they are the majority owner. The interests they set however may or may not bring about the results they want though.
It's a non-profit board, yea?
Assuming such situation happens in is noticed there is no reason to consult because it wouldn't change anything and just make things more complicated as the only action which can be taken is to fire the manipulator in power asap.
Especially some recent actions where not so much in line with the mission the board is supposed to protect push for but very much in line with giving especially Microsoft a additional competitive advantage (i.e. additional to what Microsoft payed for).
And I have seen many comments like but MS and other stake holder should have been part of the decisions and similar. But here is the think, with the specific structure of OpenAI MS and other knew from the get to go that it's a high risk investment where even through they in vest a ton of money they won't have _anything_ to say at all when it comes to decision done by the outer non-profit which is implicitly the majority owner of the for-profit OpenAI.
If I am Vanguard, I am on the phone right now with Satya telling him to get control of this shitshow of a BOD before it nukes my positions.
Professional boards of directors are supposed to be attentive to the risks to the organization as a whole, regardless of whatever weird ass governance structure exists.
Blowing out your CEO on a Friday afternoon and then accusing him of lying is not the way to do this, and they are likely to find out why come Monday morning at about 9:30AM Eastern.
If Satya is as pissed as it sounds like he is, and if Ilya et al double down on their madness, Microsoft could back out and shut that all off tomorrow. OpenAI would be dead in the water, with no running product and no path to recovery.