The Questions That Remain Around OpenAI's Board

0:00Today on the AI Breakdown, Sam Altman has rejoined the OpenAI board along with three new appointments as well. Before that on the brief, Elon Musk says that Grok will go open source later this week. The AI Breakdown is a daily podcast and video about the most important news and discussions in AI. Go to breakdown.network for more information about our YouTube, our newsletter, and our Discord.

0:24Welcome back to the AI Breakdown Brief, all the AI headline news you need in around five minutes. If you were listening at all last week, you'll know that the big dust-up in AI land was the latest in the fight between Elon Musk and Sam Altman's OpenAI. Elon had, of course, announced a lawsuit against OpenAI and Sam Altman, accusing them effectively of abandoning their mission and kowtowing to financial pressure, effectively becoming a profit center for Microsoft. OpenAI, for their part, had fought back pretty strongly on those claims, going so far as to release a set of emails suggesting that not only did Elon Musk know about the non-profit to for-profit conversion, but was one of if not the major person pushing this change.

1:05He was arguing, as has Sam Altman, that the cost to compete in this area is simply more than you could raise as a non-profit. The big point of disagreement seemed to have been that Elon wanted OpenAI to fold into Tesla, which as history tells us OpenAI did not want. That led to Elon leaving the project and to some seriously bitter grapes. Many prominent figures in Silicon Valley took a stance on one side of this battle. One of the more prominent voices in that was VC Vinod Khosla, who has spent much of the past two weeks arguing with Elon on X. On March 6th, Vinod tweeted, Is XAI open-sourced Elon?

1:39A typical model in 2025 will cost$5-10 billion to train. Good business to open-source it? Now snarkily, Elon had also said that he would drop the suit if OpenAI changed its name to ClosedAI. But while he can't control that, he seems to have responded to something that he can control, announcing quite early this morning that, quote, this week XAI will open source Grok. Writes Reuters, The move could give the public free access to experiment with the code behind the technology and aligns XAI with firms such as Meta and France's Mistral, both of which have open sourced AI models. One of the fascinating things about this is that it's a little bit throwing into chaos the AI safety alignment.

2:16Basically, Elon has for a long time talked about his concerns around advanced super intelligence. His feeling that Larry Page and Google were being too casual with this awesome power and not focused enough on humans led him to want to get involved with things like OpenAI in the first place. However, many of the folks who align with Elon from a safety perspective have very different feelings about open source than he seems to. Many AI safety advocates are concerned that releasing these models into open source is not only accelerating the rate of innovation in the space, but also giving bad actors access to more advanced technology than they would otherwise have.

2:52Now, this contradiction isn't totally new. Elon has been pro-open source for a while, for example, talking about it on the Lex Friedman podcast last November. Still, it'll be interesting to see how this all shakes out and how it influences that safety conversation going forward. And while those of us in the AI space have been largely thinking about the news in the context of what it means for AI accelerationism and AI safety debates. Others are looking at this from a more private markets perspective. Investor Gene Munster, for example, tweeted, Buckle up, Elon Musk says XAI will open source Grok this week.

3:23Many will see this as a swing at OpenAI. I see it as evidence that XAI is rapidly progressing and is the hottest private company. Musk reports that XAI has not and is not raising money, but I believe that will soon change because speed and deep pockets are paramount in the AI race. When it does, he's going to raise boatloads of money fast. For those who are just catching up on Grok now, a few things to know about it are that at current it has a 25 ,000 character context window, it's planned to be able to run natively in Teslas, and perhaps most dynamically of all, it has real-time access to tweets from the X platform.

3:56This data source is in many ways its biggest differentiator, and what the future hopes of the model are in large part pinned upon. I'm sure there will be lots more to talk about when it comes to Grok, but for now, let's move on to a couple other topics. Media giant Thomson Reuters is waxing poetic about how much money they have ready to roll for AI-related deals. The company's CEO, Steve Hasker, has told investors that the company has approximately$8 billion to spend on acquisitions and other investments in AI. In addition to buying companies, they also are planning to spend more than$100 million each year developing their own AI.

4:28So far, we don't have a ton of information around what types of acquisitions they'd be looking at. In the past year and a half or so, they've spent about$2 billion buying companies outside of AI, including a global invoicing and tax solutions business. But again, what that means for their AI plans remains to be seen. Hasker also said that the company is planning to launch somewhere between six and eight AI-related products in the next few months, which he called a, quote, unprecedented rate of innovation, presumably speaking for the group. Closing out on the markets theme for just a minute, we pop back to Friday, where NVIDIA had kind of a wild day.

5:00They started off around 5 % up on the day, hitting a share price of$972, before falling 10 % in 30 minutes, ultimately ending the day down 5.6%, which was one of their biggest drops in the last few years. Now, right now, any time we see any sort of wobbles in the market space for AI, someone is going to say, hey, it's the bubble finally popping. But by and large, the market analysts that I've seen seem to think this is just investor exhaustion. Mizuho Securities, for example, said that semiconductor stocks have been, quote, way overbought and when they start to fade, you see the quant machine sell and then retail worries and it just accelerates.

5:34That same analyst reminded that NVIDIA and other AI stocks, quote, cannot trade up every single day. At the time of this recording, NVIDIA is also down slightly on the day-to-day, but the move is not dramatic. And as friends, that is going to do it for today's AI Breakdown Brief. Next up, the main AI breakdown. The tools that help us manage our projects and endeavors become way more significant feeling than most other normal tools we interact with. They are the things that help us breathe life into ideas, and that's why I am so pleased that today's episode is brought to you by Notion. Notion is the power center for all of my projects, from the AI breakdown to the new education initiative that so many of you are participating in.

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8:48At the resolution of last year's wild week of firing and then rehiring Sam Altman and OpenAI, part of the resolution was a fairly significant shift in how the board of directors was architected, or at least who was on that board of directors. Most of the previous board left at that time. As Sam Altman came back, most of the previous board left, with the one holdover being Adam D 'Angelo, the CEO of Quora. And two new board directors were also appointed, former Meta and then Salesforce co-CEO Brett Taylor, as well as former Treasury Secretary and Harvard President Larry Summers. Notably at the time, Sam Altman did not rejoin the board, and the question was, would that be temporary until after an investigation-slash-review and in the context of another set of new board members joining as well.

9:34You'll also probably remember that board interactions were a core part of the firing in the first place. The only explanation that the board ever gave for Altman's removal was that they had lost confidence in him and that they thought that he was not being fully truthful with them, although around what and in what ways we never heard. And then on the flip side, of course, Altman himself had been trying to remove a different board member, Helen Toner, based on a number of issues, including a paper that she had written for Georgetown that seemed to criticize how OpenAI approached safety while lauding rival Anthropic.

10:05Well, now a few months later, at the end of last week, we got a big update around a set of new members of the board of directors, as well as a follow-up around Altman himself. The TLDR is that Sam Altman will be rejoining the board, as will three new members, Dr. Sue Desmond-Hellman, the former CEO of the Bill and Melinda Gates Foundation, Nicole Seligman, the former EVP and General Counsel at Sony, and Fiji Simo, the CEO and chair of Instacart. OpenAI said very little in their announcement, about the post. Board Chair Brett Taylor said in a statement, I am excited to welcome Sue, Nicole, and Fiji to the OpenAI Board of Directors.

10:38Their experience and leadership will enable the board to oversee OpenAI's growth and to ensure that we pursue OpenAI's mission of ensuring artificial general intelligence benefits all of humanity. Literally, ChatGPT could have written that. Before we get into the specific backgrounds of these folks, let's talk a little bit about the interpretation. Most of the coverage has focused on Altman himself. Part of the announcement was that OpenAI had completed its investigation that was undertaken by law firm Wilmer Hale. That firm concluded that Altman's, quote, conduct did not mandate removal. Instead, according to the information, they found that Altman's firing resulted from a, quote, breakdown in the relationship and loss of trust between the prior board and Mr.

11:14Altman, but that the old board had acted too quickly, quote, without advance notice to key stakeholders and without a full inquiry or an opportunity for Mr. Altman to address its concerns. Wilmer Hale also found, quote, that the prior board believed its actions would mitigate internal management challenges and did not anticipate that its actions would destabilize the company. Here's how OpenAI described the investigation. WilmerHale conducted dozens of interviews with members of OpenAI's prior board, OpenAI executives, advisors to the prior board, and other pertinent witnesses, reviewed more than 30 ,000 documents, and evaluated various corporate actions.

11:46One notable thing, given all of our speculation around the time, the investigation concluded that the board's decision did not, in fact, come out of any sort of product safety or security question. They said it wasn't about the pace of development, it wasn't an OpenAI finance question, and it wasn't about misrepresentations in statements to investors, customers, or business partners. It really was just about Altman's relationship with the board itself. Now, as this was all happening, other news outlets were resurfacing issues that arose around that time. The New York Times published a piece about CTO Mira Mirati saying, key OpenAI executive played a pivotal role in Sam Altman's ouster.

12:19Mirati brought questions about Mr. Altman's management to the board last year before he was briefly ousted from the company. The Times wrote, Ms. Marati wrote a private memo to Mr. Altman raising questions about his management and also shared her concerns with the board. That move helped to propel the board's decision to force him out, according to people with knowledge of the board's discussions, who asked for anonymity because of the sensitive nature of a personnel issue. Now, Mira, for her part, did not respond to the Times' request for comment, but did contradict their framing of the whole engagement, saying in a note to other OpenAI employees that she and Sam, quote, have a strong and productive partnership, and I have not been shy about sharing feedback with him directly.

12:53She also said that the idea that she went to the board with these concerns mischaracterized what actually happened. Instead, she said that she did not reach out to the board, but quote, when individual board members reached out directly to me for feedback about Sam, I provided it. All feedback Sam already knew. Mira also commented publicly on X about this, effectively blaming those former board members for being the sources in the New York Times article. On March 8th, she wrote, Governance of an institution is critical for oversight, stability, and continuity. I am happy that the independent review has concluded and we can all move forward united.

13:25It has been disheartening to witness the previous board's efforts to scapegoat me with anonymous and misleading claims in a last-ditch effort to save face in the media. Mira then shared the note that she had sent with OpenAI that read, Hi everyone, some of you may have seen an NYT article about me and the old board. I find it frustrating that some people seem to want to cause chaos as we are trying to move on, but to very briefly comment on the specific claims here, Sam and I have a strong and productive partnership, and I have not been shy about sharing feedback with him directly. I never reached out to the board to give feedback about Sam.

13:51When individual board members reached out directly to me for feedback about Sam, I provided it. All feedback Sam already knew. That does not in any way mean that I am responsible for or supported the old board's actions, which I still find perplexing. I fought their actions aggressively, and we all worked together to bring Sam back. Really looking forward to get the board review done and put gossip behind us. Meanwhile, two of the board members who were working hard to push Sam out and who did leave when he came back were Helen Toner and Tasha McCauley, who released their own statement last week saying, OpenAI's mission is to ensure that artificial general intelligence benefits all of humanity.

14:23The OpenAI structure empowers the board to prioritize this mission above all else, including business interests. Accountability is important in any company, but it is paramount when building a technology as potentially world-changing as AGI. We hope the new board does its job in governing OpenAI and holding it accountable to the mission. As we told the investigators, deception, manipulation, and resistance to thorough oversight should be unacceptable. There are a great many people doing important work at OpenAI. We wish them and the new board success. Basically, they are continuing to say that Sam was deceptive, manipulative, and resistant to oversight.

14:55Having effectively won, Altman himself was able to strike a more conciliatory tone. In a long tweet, he said that he was happy to welcome the new board members and thankful to the team for being resilient and staying focused. He also thanked Mira, reinforcing what she had said about their relationship. And finally, he spoke to Helen Toner, although not by name. He said, I learned a lot from this experience. One thing I'll say now, when I believed a former board member was harming OpenAI through some of their actions, I should have handled the situation with more grace and care. I apologize for this and I wish I had done it differently.

15:24I assume a genuine belief in the crucial importance of getting AGI right from everyone involved. We have important work in front of us and we can't wait to show you what's next. Now in terms of who these new board members are, OpenAI has long and impressive bios, Reuters tried to add a little bit of context as well, and the information tried to aggregate some of their experiences. They wrote, Two of the three have taken companies through major crises or milestones, Seligman with the massive Sony cyber attack in 2014 and SEMO with Instacart's IPO in 2023. Each board member gives OpenAI insight into a different area, Desmond Hellman with healthcare and philanthropic circles, Seligman with media and entertainment, and SEMO with consumer technology in Silicon Valley.

16:02Ironically, the information continues. Other than Desmond Hellman, who provides a philanthropic-ish halo, the nonprofit board is chock-full of for-profit champions, with backgrounds as executives of major corporations and startups. That summary concludes, quote, All in all, this just seems like another step in OpenAI's journey from a research-focused idealistic organization to a profit-making, product-centric startup. The advantage of the new board members' backgrounds is that they hopefully have the gravitas to balance out Altman's whims, because for better or worse, the CEO's position at the company has only been strengthened by the results of the investigation.

16:33Axios made this point as well, writing, Altman's return to OpenAI board leaves billionaires in control. Friday's announcement that OpenAI CEO Sam Altman will return to the non-profit's board locks Silicon Valley's billionaire class into control of the destiny of society transforming artificial intelligence. In their Why It Matter summary, Axios continues, AI will be shaped by rich men in the markets that made them rich, not by the scientists and engineers who are building it or the governments that will have to deal with its impact. And indeed, from kind of all sides, the first layer of discussion is disappointment for different reasons.

17:03You have some folks who are arguing on X that this set of people just doesn't know enough about AI to be really credible in this role. Stability Zaman Mostak wrote, Great board for a SaaS company but tasked with AGI and how to mitigate it ending democracy, capitalism, humanity? Meh. This is tech that is society changing and so we need a mix of real expertise and civil inclusion in this, plus appropriate oversight and massive transparency. In particular, data transparency is something we must demand now. There is no reason not to have this for any frontier labs. You wouldn't eat food that you don't know the ingredients or hire folks with unclear CVs.

17:35Most of those building this technology do not practice what they preach and want to have control over this and others. That's the reality. Zvi Meshawicz, meanwhile, points out that we don't know anything about the AI-related knowledge and views, especially as he puts it on existential risk of any of these new board members. And I think that to some extent, part of the feeling here is a disquiet at the disparity between how powerful this technology could be in its impact on society, and how little control it seems like there is over who actually has control of it. But as we're seeing with Elon's Grock actions and others, maybe that will provoke a different type of response.

18:08In any case, it is interesting stuff, and so we will just have to keep an eye on it from here. However, that is going to do it for today's AI Breakdown. Until next time, peace.

18:20Thank you.