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Comment by foobarian | Hacker News Reader

Assuming Altman has already signed paper with MSFT, how would this work exactly? Break whatever contract clause there was involved? Maybe it's customary to have an easy backout period in situations like this.

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I think that's a large thing to assume. That announcement could also have been easily just damage control before the markets opened on Monday and nothing has yet to be truly hashed out and agreed on.

MSFT, presumably, is one of the investors that want him to stay at openai.

They offered him a job leading his own unit within MSFT, so that doesn't make sense

I assume if MSFT/Satya are supportive it won't be an issue.

He hasn’t. Why would he prematurely?

https://www.theverge.com/2023/11/20/23970100/sam-altman-micr...

I am not sure the enforceability of non-competes in California. They're certainly not for ordinary workers but I know that it is often enforceable in other places for executives even when deemed not for workers.

I think parent means breaking the contract with MS if he returns to OpenAI.

Right - which would be a non-compete.

I wonder if Microsoft owning 49% of OpenAI vastly simplifies such a situation. Or maybe further complexifies it. It's fascinating to watch, anyway.

All they need is another 2% and at a measly two billion that would be an easy settlement. The board members get to save face and Satya is off to the races, employees happy, investors happy.

It could easily happen.

Microsoft couldn't control the OpenAI business even if it owned every unit of every LLC associated with OpenAI (except for the special units owned by OpenAI GP LLC, which is wholly owned+controlled by the non-profit). The operating agreement of OpenAI LLC (which actually operates the OpenAI business) specifies that OpenAI GP LLC (which is wholly owned and controlled by the non-profit) controls it regardless of how many units it owns. See https://openai.com/our-structure

What is interesting is that Sam noted that OpenAI board should go after his shares if he were to go off on the company...which implies some sort of ownership that others had no prior knowledge of.

What's the over-under of his shares being more than 2%?

Based on OpenAI's structure, I would expect his equity would be in the OpenAI holding company, and not OpenAI Global, LLC which Microsoft is a minority owner of and the holding company is a majority holder. The holding company is what employees and investors have equity in.

If Altman had equity directly in OpenAI Global that would be really odd and go against OpenAIs previous disclosures.

https://openai.com/our-structure

That was a joke, the fact that he has no shares is the punchline.

He is basically saying they have no leverage to stop him speaking out once he’s been fired (which they might if he remained an equity holder).

They can't simply by additional 2%

Why not? An emission could be done and whoever has the right to buy could pick it up. End of story.

My understanding is the OpenAI holding company, which is controlled by the board of directors, owns 51% of the capped-profit company, with Microsoft owning the other 49%. There doesn't seem to be a scenario where Microsoft can buy a controlling interest without the boards approval.

Yes, hence the word 'settlement' in my original comment. As in: you ensure we get a controlling interest and we'll let you go quietly.

MS doesn't have enough leverage to pull such move.

The board could decide to kill the company in MS not only loses a 10 billion invest but has to reconsider its whole artificial intelligence integration push.

This comment didn't age well.

MS did have the leverage, and by offering jobs to 700 people at once they felt safe in their move to pressure the board in a way that I'm still quite impressed by. It's probably the most vivid example of the power of the workforce in the 21st century West.

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