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Comment by jacquesm | Hacker News Reader

That's a day later than I expected. The investors are not named, I wonder what the grounds are (there are several, quite narrow paths) and whether they will prevail. The fall-out from this will take months if not years to come to a close. TFA doesn't have much actual information and seems to be mostly speculative, the whole thing could have been made up and you wouldn't know the difference.

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The same article was posted here yesterday.

And it is pure mumbo-jumbo; I haven't talked to anyone and I could have told you "Microsoft has a legal team that will be looking into this", which is all the article actually says.

Yes, it is a very thin article. You could have written this on Friday evening without any sources to back it up and nothing of value would be lost.

Given the board hasn't made a public statement at this point, I suspect it's because lawyers have advised them not to.

Yes, that's my reading as well. They want to avoid making things even worse than they already are.

Yeah you don’t want to be suing if it takes even 6 months to play out. The new company should be formed by Altman and the team, with MS funding and providing the IP. This has to be the best alternate route for Altman/engineers. I would say even Altman and team and MS 50/50. They both have leverage

Genuinely curious if they really could simply "provide the IP". Is there precedent for such a situation, seems like what is left of OpenAI could sue Microsoft.

What are those several narrow paths?

The article is pretty speculative but it does have a law professor basically saying he can't think of much.

Duty of care towards employees and investors, decision made too hasty, conflicts of interest, insufficient balance between the various interests and responsibilities.

Note that even if the grounds of the lawsuit are narrow if you prevail the damages can be immense. So the professor is talking about the likelihood of success, not about what will happen if the plaintiffs prevail. The plaintiff with the strongest motive (Microsoft) is now actively contributing to the damage so I doubt it is them that are going to sue.

MSFT doesn't have a fiduciary duty or a duty of care like a director does. They are shareholders.

Of course they don't. I said 'plaintiff' not defendant.

Conflicts of interest sure if they were clear and proven. The rest sounds like there’s not much to work with.

The only actual action is firing an at will employee. The various supposed consequences are sort of second order effects that could easily be ascribed to the action of others and most of them haven’t actually happened as of now.

There’s a LOT of people in the world that have absolutely no interest in a court precedent that a board can’t just fire a CEO if they want to. This is basically a textbook application of the business judgement rule, and it’s even more clear cut since it’s a non profit and the board gets to decide how they want to interpret the mission.

I would rather not be on the receiving end of a lawsuit for any of those. Besides the possible reputation damage there is the real danger of personal liability.

Not really.

People can sue anyone for anything and do all the time. Being sued by powerful people is worse than being sued by random people. These are truisms and meaningless observations.

There's not really much of a case for the premise that you can sue the board of a charity for a hiring/firing decision. What's the rationale?

There isn't one. And the law professor quoted in the article basically said yeah I can't really think of one. And you haven't stated one here.

Look at this in the reverse. If the board of Microsoft fired Satya tomorrow suddenly would OpenAI have cause of action for a lawsuit against them? Of course not, what would even be the premise for that? It's literally the same fact pattern though.

People make crap decisions all the time. So long as the board can claim it was their belief it was the best decision for the company/mission, is there a precedent for taking the team to task?

That being said, everything is securities fraud.

They can make the claim, that's easy. And then they will have to show all of the relevant documentation to prove that that claim is what they say it is. Meeting minutes, text messages, emails etc. And there had better not be evidence of deletion or alteration of any of those, which given the fact that there is already one defector will be very hard.

Even if they just had a 12 second meeting, "You know what, the current CEO is trash. He did not send me a birthday card. Shows lack of character, unbefitting the company. He is gone" - does the board not have the broad latitude to make such decisions? Not sure they have to document the decision beyond the action.

No, a board is supposed to weigh their decisions carefully and only after due deliberation and concern for all possible outcomes should they decide.

This isn't a boy scout operation, it's the governance structure of a 90 billion dollar company. That comes with some requirements regarding temperament and wisdom.

They definitely would have to document the decision, if they wish to sidestep future liability due to being challenged on that decision and not being able to prove that they went through all of the required steps of the dance to make an irreversible decision with far reaching consequences.

Sure but Microsoft doesn't have standing.

You can't just sue to reverse decisions you don't like if you're not a party to the decision at all.

What's your theory of standing for this cause of action?

Lack of duty of care exercised by board members with conflicts of interest all over the place affecting innocent bystanders in their internal squabbles.

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