BREAKING: Sam Altman FIRED from OpenAI

0:00In a breaking edition of the AI Breakdown, Sam Altman has been fired from OpenAI. Sam Altman has been fired as the CEO of OpenAI. I will just say what everyone is thinking WTF. All right, guys, welcome back to the AI Breakdown, an emergency edition of the AI Breakdown. It is Friday, November 17th at 4.50 Eastern as I'm recording this, and I am just going to go straight. Even if I bobble, I'm just going to keep going. There is no time to edit. At 3.28 p.m., OpenAI tweeted, OpenAI announces leadership transition. Here's what the blog post read. The TLDR, before we get into it, is that Sam Altman is out, that Greg Brockman has been moved from the board and is now just a regular employee, and that CTO Mira Mirati is now the CEO acting until they can find permanent leadership.

0:54So here's what the announcement said. The board of directors at OpenAI has the 501c3 that acts as the overall governing body for all OpenAI activities. Today announced that Sam Altman will depart as CEO and leave the board of directors. In Mr. Altman's departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI. Now again, here's the other line about Greg Brockman. As part of this transition, Greg Brockman will be stepping down as chairman of the board and will remain in his role at the company reporting to the CEO.

1:35But I want to read this one more time. Mr. Altman's departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI. This is a serious and crazy moment. We are talking about an extremely rushed feeling announcement that does not seem like basically any of the patterns that you might imagine in the case of a sex scandal or really anything that you can imagine that's not incredibly serious.

2:15Corey Quinn tweets, Oof, Sam Altman is out at OpenAI and the language of the announcement blog post is just knives out level of hostility. This has the feel of the company desperately trying to get in front of something. Otherwise, he'd be taking time to refocus or spend time with the family. He continues, Companies do not say this about ousted execs in formal communications without it being extensively workshopped and reviewed. The only reason I can see to do this is to distance themselves from something that's coming. Personal grudges would be iterated out before publication. Now, Brian Romley said something similar.

2:50Sam Altman was meeting at the Asian Pacific Conference around this time yesterday as CEO and board member of OpenAI. I have dozens of insiders giving me quote unquote insight. But the one thing I will say at this point is that it was sudden with very short notice. Okay, let's talk now about what it could be. What are people are speculating that it might be. The first is some sort of sex scandal. And there's sort of two dimensions of this. One is something that we don't have any idea of yet. But the other is the fact that Sam Altman's sister has accused him of some very heinous things. Now, the reason that I am more skeptical of this being the reason is that these allegations, as virulent and horrible as they are, have been open for some time.

3:37This is not a new issue. This is not something that just came out. And it's possible that perhaps there was confirmation of this now, or maybe what they're getting out ahead of is a big expose that actually confirms these allegations in some meaningful way. And so it's not impossible. It just seems unlikely given how long this has been in the public sphere. Again, to be clear, I'm not commenting on either the veracity of these things or the intensity of them should they be proven to be true. I'm just saying that they've been out for a while. And so it seems a little bit incongruous with the fact that this was a very rushed seeming announcement.

4:13A second possibility that some have discussed is the idea of there being some false statements publicly in terms of his financial upside. This is something that I think is interesting to explore. Sam Altman has very clearly stated in the past that he has no upside in the company, that if it does well, he doesn't make money from it. He said that before Congress, which is obviously a big deal. But it doesn't, again, seem to me to be the type of thing that would warrant this sort of response. A third thing that people have speculated on is maybe this is a Microsoft coup, right? That there is some issue with what Altman wants versus what Microsoft wants.

4:53And there was a power struggle and he lost. That strikes me as highly unlikely for just a bunch of reasons. One, I think that it wouldn't be carried out this way. That it doesn't seem that Microsoft has that sort of power or authority. But more than that, or more even beyond that, Microsoft lost billions and billions of dollars when this was announced. This announcement was not made after trading closed. It was made before the close of trading, and Microsoft was down more than a percent in the last minutes of trading. That's a really big deal. That is an extremely consequential mistake. Corey Quinn writes, since this news broke, Microsoft has lost more than the acquisition price of Twitter from its market cap.

5:35Again, big deal and not the way that they would have done things if this was really their prerogative. A couple other possibilities that have been floated. One is a lot of people have been retweeting a Google screenshot of Sam's Twitter profile that says that he's running for president. This, I think, is just an artifact of something that he retweeted a couple weeks ago. Congressman Dean Phillips wrote, I am running for president as a Democrat in 2024. My campaign will be about four main things. First and foremost, it will be about the economy. This is exactly what's showing up under Sam Altman's handle on that Google screenshot.

6:14But again, I think it's just an issue with how Google captured and cached this retweet, not that Sam is actually out there thinking about running for president. Another sort of related issue in that domain is the idea that, or this is more fully in the conspiracy theory domain that with President Xi in San Francisco this week, perhaps it had to do with state level secrets. Now, I don't think or I haven't seen anything to give credence to this sort of speculation, but I do think that it is the first, frankly, that is on the scale that would actually make it seem plausible that they would announce this in this way, that in other words, We have to be dealing with something that's bigger than just garden variety scandals to explain the way that this was announced.

7:05The speculation that came up as I was hosting a Twitter space with Swix from Latent Space just a few minutes ago is that there have been money problems, cash flow problems. A lot of people have been talking about how OpenAI had to shut down or stop registrations for ChatGPT+. Perhaps Sam then was actually not representing to the board the exact financial position that they were in. And perhaps they were in more dire straits than it seemed. I think a lot of people are keyed up because this is a Sam falling out of power in November, which is a story that we saw last year based on sort of financial misstatements.

7:38And that's possible. There's also another layer of speculation that we heard or got rumors of that Sam was looking to take Saudi money. And that didn't seem to be in line with the values of the company. And perhaps that was it. I don't know. It's possible. My skepticism on these fronts is a couple parts. One is that I think OpenAI has just about as much money as it needs access to at any given time. It is such a big and important player in this space that they sure maybe couldn't have gotten the exact valuation they wanted, but I don't think there was a shortage of money available to this company.

8:16Two, once again, if it was something like Saudi money, it doesn't explain why they would make this announcement in such an aggressive and rushed way. A final area of speculation that many are discussing is the idea that on a fundamental level, Sam had been keeping something hidden about the achievement of AGI, of artificial general intelligence. And so the speculation here goes that maybe Sam was actually, or maybe OpenAI had actually achieved AGI or something looking like it and didn't let the board know about that or had revealed or not revealed that was the case. This to me is not a complete story, certainly more in the ballpark of themes that feel significant enough for the company to make this decision.

9:07And what I mean by that is that what we have here in OpenAI is a startup that has taken pole position in what is fairly and arguably the most significant transformation industry in the world right now. It is the area that everyone is paying attention to. AI has singularly kept Wall Street afloat this year in the face of continued rate hikes and recession speculation and all of these macro turbulences, government shutdowns, inabilities to elect speakers of the House. At every turn, markets have been propped up by enthusiasm and excitement around artificial intelligence. And yes, you can write that off as just a hype cycle, but it's based on the fact that there is an anticipation that this really will be transformative in terms of economic productivity in ways that we are just barely beginning to recognize.

10:01And even if you think it's all hype, the fact that markets have participated in the hype to this degree is reflective of how big a place OpenAI has. Sam Altman has in the course of the last year gone from just a tech or business leader to an actual global world leader. When he did his round the world tour, he was selecting which heads of state to sit with and which not the other way around. He had achieved a certain level of not just celebrity, but significance on a global stage because of how big a deal this artificial intelligence is going to be. So for them to make this decision, such an aggressive decision to remove Sam entirely, to frame it with such sort of prejudice and aggression as they did, to take Greg Brockman out at the same time from his leadership role on the board and leave him in the company, yes, but off the board.

10:58This is a really big thing. It feels to me like it couldn't be anything other than just something absolutely massive. Again, my bet is less that it has to do with something personal with Sam, although that's certainly possible. Like I said, a big expose could be coming out. And more, it seems like there must have been some huge thing internally going on. Now, markets and prediction markets specifically are, of course, rampantly speculating about what it might be. The AI Safety Memes account summed up what Manifold Markets bettors are guessing. This is just a tweet from a little bit before I started posting or before I started recording, rather.

11:40Why was Sam Altman fired? A safety incident, 16 % are betting. Something related to policy, 17 % are betting. Misuse of customer funds, a.k.a. the SBF, 10 % are betting. 7 % are saying it might be sexual misconduct. 1.8 % are saying that it's to put a chatbot in charge. 22 % one of the bigger expectations is around corruption. 11 % are betting it's a concealed AGI breakthrough. 31 % a fundamental disagreement about OpenAI's safety approach. We'll come back to that in just a moment. 24 % a secret third thing, i.e. none of the above reasons. 11 % cash flow problems. 18 % held equity after all, 32 % alignment coup, 4 % sexual misconduct.

12:26Now, of course, all of these you have to say and then lie to the board about it afterwards. So they are all not just whatever the infraction is, but also lying to the board about it. But the preponderance of the bets are around some sort of fundamental disagreement around the open AI safety approach or something around alignment. And perhaps that's true. But what's notable to me is that it's not clear among the AI safety community whether they think this is a good thing or a bad thing. On the one hand, Sam Altman isn't slowing down. He's pushing AGI forward. So he's not necessarily in the camp of the AI safety folks.

13:04On the flip side, he did seem to express an appreciation for X-Risk, right? He would talk fluidly and fluently about it when it came to his conversations with policymakers. And so is it possible that Mira Mirati or whoever ends up being the CEO actually makes things worse for the AI safety and AI risk issues? I'm not sure. Now, one person who did comment on that already is Eliezer Yudkowsky, who wrote,

13:47Now, obviously, that's just one person's perspective, but that is one person who is very influential among these groups, who perhaps this gives a little measure of confidence that it's not all a bad thing. Now, when it comes to Mira Mirati, a lot of people are saying that they just don't know that much about her, and it's hard for them to tell exactly what the story there is. Now, Alexander Leishman from River, which is a Bitcoin infrastructure company, a Bitcoin bank, effectively, if we were allowed to call things that and if they were allowed to actually get services, wrote, there's more to the OpenAI story.

14:19The CTO, now CEO, is misrepresenting her background. She went to Colby College, not Dartmouth, except for a short joint program. She was also never an engineer, and she was somehow CTO of a highly advanced technology company. Is every journalist asleep at the wheel? Alexander also noticed that she just deleted her LinkedIn, but cached the Google snippet. Now, he also said, feel free to ask a Dartmouth friend to try to look her up in the student directory. When that happened, he couldn't find her. So, So again, I don't know for sure. I'm just pointing out that right now is certainly, especially after all of this, time to ask all of these questions.

14:56I don't know, man. This is a really shocking development. It's something that I would not have anticipated in just about any imagining of how this year was going to happen. I don't know what to think in terms of it being a good or a bad thing. I think in general that it is a remarkable thing. I think that it creates an incredible amount of volatility and instability around open AI. And I think that open AI's leadership position in the space means that it creates an incredible amount of volatility around the AI space in general. I think that every big company in the world, every AI company in the world, is going to hold an emergency meeting today to figure out what it might mean for them.

15:38I think when it comes to startups, they're going to be asking, should we be still working with OpenAI or should we be moving to something else? Should we be implementing open source models? Should we be trying to move our affiliation to somewhere else? I think that it has big implications for Anthropic, for example, as the number two of the startup AI labs position. Obviously, this has big implications for the Microsofts, Googles, and Amazons of the world. You have to think that particularly Google and Amazon are looking to see if there's any way that they can speed up the models that they've been working on in the case of Google Gemini, in the case of Amazon Olympus.

16:15and for Microsoft, I wonder if this is a moment where they try to swoop in and actually get more of OpenAI. Do they actually try to complete the acquisition? Do they use this turmoil and turbulence as a way to say, we need to right this ship and we're going to just do it and OpenAI is going to officially be a vassal of Microsoft, no longer just a sort of frenemy as it's been and as we've talked about on this show before. I think that all of these things are well within the possibility set but what's for sure is that things are not going to look anywhere like they did this morning when we woke up as they do tomorrow morning when things settle down a little bit.

16:51So that is the read for now. I will, before I publish this, come back and check to see. There was theoretically an all hands happening at OpenAI at 2 p.m. Pacific, 5 p.m. Eastern time. So if there is relevant announcements or information that leaks from that, I will add it to the end of this story. For now, that's what we know. huge day for once. The AI Twitter hype boys who say breaking news, this is the biggest week ever in AI are not lying to you. It's really that big. Anyways, guys, appreciate you listening or watching. Until next time. Peace. All right. After I checked, I did see a couple updates that I wanted to share, notably one from Sam Altman himself, who tweeted, I loved my time at OpenAI.

17:33It was transformative for me personally and hopefully the world a little bit. Most of all, I loved working with such talented people. We'll have more to say about what's next later. Again, that's a new piece of information that we will start speculating around. The fact that he didn't rise to be aggressive and kickback is probably telling in some way, although I'm not exactly sure how. But for now, not really any more information. Certainly no new leaks from this meeting that's theoretically happening at OpenAI right now. Just Sam, at least seemingly gracefully, bowing out.

18:07Thank you.