Emergency Episode! Sam Altman Out at OpenAI and X's Advertiser Exodus

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1:14Hi, everyone. I'm Kara Swisher. And I'm Scott Galloway. And this is an emergency crossover episode of Pivot and the Prof G Pod, because a lot of news just broke in the last few hours, especially because it's a Friday and we need to discuss it. Let's start with a story I don't think anyone saw coming. Sam Altman is out as CEO of OpenAI. Quote, this is from the board, quote, 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 to lead OpenAI.

1:50Chief Technology Officer Mira, I think it's Maradi, is now the interim CEO. Theo Altman himself posted on X, I love my time at OpenAI. It was transformative for me personally and hopefully the world a little bit. Most of all, I love working with such talented people. I love more to say about what's next later. So just so you know, the president and co-founder of OpenAI, Greg Brockman, posted a statement a little while ago that he is quitting following the news. As I noted in a post myself, I'd done a little reporting. There are a lot more departures of top folks. I've been hearing from them all night at OpenAI.

2:24I understand it was a misalignment of the profit versus nonprofit adherence of the company. Developer Day was an inflection point. Some people on Sam's side are calling it a coup. Other people are calling it a misalignment, as I said, or that it was getting too far away from its open nonprofit status and was moving too quickly, not thinking of safety and diversity and other issues. and that he was doing stuff without, you know, consulting them. And there was a side of the company, including its chief scientist and another board member who were on one side and Brockman and Altman were on another.

3:04The way the board phrased it was so funny, the candid, meaning he lied. That's a word for a lie. It did leave open enormous amounts of rumors, including some very sordid personal ones on the Internet. I've been trying to chase all those down, too, because very people were like, oh, it was really this and it was this. And I'm not going to repeat them because I haven't been able to confirm any of them. You know, I just don't want to go anywhere with stuff I don't know. It sounds like this developer day was an issue and that that maybe, you know, he was the face of A.I. and open A.I. He's gotten very famous.

3:40He was just at a meeting in San Francisco with the president. He's been all over the place. As you know, I've interviewed him a bunch of times. I happen to like Sam Altman. But I think there was a real misalignment here. Let me say one last thing is Microsoft absolutely didn't know this was coming. And my sources say Satya didn't know. And the company was told just minutes before they put out the press release. So they were caught unawares. So, you know, I don't know. I don't know. It's really a big deal. I think this is a big, big deal. It is a big deal. And there's a lot here and we'll know more.

4:13So I think you can make an educated – there's an educated guess around what happened, but an uneducated guess around what inspired. And what likely happened is that the board found something that upset them, asked him to clarify, and then later they found that he had lied and misled them. Because for them to dismiss a CEO who has created or at least spearheaded an increase in value of$90 billion and quite frankly was seen as sort of a good guy, a lot of hope. This is the most exciting new technology in probably a decade. This must have been real. I mean, they don't do – boards don't do this lightly.

4:57And I would put it, you know, if you wanted to now start handicapping the why and the uneducated guests, the personal scandal stuff, I think, is less likely because other executives are resigning. And if it had been a personal scandal thing, I think they would have thought, well, maybe I'll be the CEO or I don't want to get anywhere near the appearance of support of this type of behavior. It would just be – and not only that, I hate to say this incorrectly probably or correctly. When you create$90 billion in shareholder value, boards have a habit of trying to wallpaper over scandal or personal scandal.

5:37Yeah. And then when – Because look, I just said people – I've gotten everything from who's doing some of the companies. Like maybe it was this. Maybe it was that. Right. You know what I mean? You can go through all of the possibilities. That seems less likely. What seems the most likely here is that Sam was investing in, doing a side hustle, starting something that had some sort of competitive conflict, perhaps with other people at the company. I'll just give you a scenario. Maybe at some point, OpenAI has decided we want to pull an Apple and not be dependent upon NVIDIA or Intel. The way Apple was dependent upon Intel, they said, we're going to develop our own chips.

6:21Maybe OpenAI said, we have enough money now. We should develop our own chips instead of building NVIDIA's business. And they were developing their own chips. And at the same time, Sam was working with other people and funding a chip company focused on AI and maybe wasn't as forthcoming about his activities as the board would have liked. And they feel like, boss, you can't have your cake and eat it too, and dismissed him. The notion around the semantics around the split between profit and nonprofit, I find that unlikely because there's so much money here. Yeah, just so you know, OpenAI was exploring making its own chips.

6:57But I'm using that as an example. Yeah, it has. That's actually true. Starting another generative AI company. Who knows, right? Yeah, he's got a lot of other interests, including fusion, energy, all kinds of things. But this the board doing this, I mean, I was sad in the sense that I was hoping this guy was going to be anti-Elon and present a more optimistic, aspirational and quite frankly, just responsible, masculine, mature version of what it means to be a business leader. So I was disappointed that he was ousted. It's a victory for corporate governance, though, because boards in the whole point.

7:33If that's what he did, if they just had a misalignment about profit versus nonprofit, then it's a little funnier, right? Don't you find it? I personally think that the whole point of corporate governance and governance in general, whether it's the Congress or whether it's board of directors, is that we have figured out that when individuals aggregate a lot of power, it begins to corrupt their thinking and that they can become dangerous and make bad decisions that are bad for stakeholders. So we create governance. And governance is meant to prevent a tragedy of the commons, protect shareholders, and act as fiduciaries, and do something wonderful.

8:05And that is tap into our advantage as a species and cooperate with each other and learn from one another. And when you have no board, no governance, no fiduciary responsibility, it goes bad places. So I think this is actually, in my view— What if he's not wrong about the direction? The developer day was very exciting and everything else. Maybe they're just a bad board. Maybe they're an experienced board. Maybe they made the wrong decision. This press release feels stupid to me unless he's the way they phrased it left them open to all kinds of problems. And we have bad referees in the Premier League.

8:38And on the whole, it's the way to govern the game. Of course. But what if it's just a bad board and they just had a fight and one side beat the other? You know, that doesn't make them good, good governments. I would bet. I'd have to push back on this from my reporting. I would bet when the news comes out, I just find it highly unlikely that a group of people governing a company that had increased$90 billion in value, I can't imagine they wanted to do this, Cara. I think we're going to find there was real reason here. The direction of the company, if they thought he was too organized around profit, if they didn't like how the developer day, which, again, several people on both sides said it was an inflection point of tension.

9:24So, you know, it's just a direction thing. So, no, I think they could do that. That has happened on boards. We're going to go this way and not this way. And one side tends to win. Boards make bad decisions all the time. when you're ousting the CEO of a company that, as I said, has created this amount of economic value. And there's enough to go around for everyone, for the nonprofit side, the profit side, they're all making a shit ton of money and they decided to fire him. Well, not Sam Altman. He doesn't own very much of it. Well, okay. Better yet. But I got to think there's a there there here.

9:54This is pretty dramatic. Yeah, it is. But maybe it's just that. It's a difference of the direction of the company. and he was going a different direction and just not heeding them. Right. And that's a problem, of course, because they're a board is a board is a board. Right. Maybe he was taking a direction and just wasn't dialing them in, you know, to it. I would not blame a young man in this environment who creates tens of billions of dollars of thinking I can do whatever the fuck I want. Yes, that's correct. Because the the role model here does whatever the fuck he wants and totally ignores his board.

10:30He has no board. And so I wouldn't find it unusual to find out that the CEO was ignoring everything the board told him he could or could not do. Right. You know, we'll just – we'll find out. But this is – I mean, I was flummoxed by this. I was totally shocked. The board needed to be much more transparent. And he's got to make a statement too now. Of course. It's kind of like – Truth's going to come out. Only because there's so much. You know, in several articles previously, he's got a sister who's making all those kinds of allegations against him, which has been out for a while. I'm not even going to go through them right now.

11:03People I did run that down to people told me had nothing to do with it.

11:10It's it's they've got to be more clear. This is the zeitgeist company of the moment. And if they're not clear and transparent and their statement, I'm sorry, I thought was clottish. Like, what? What does that mean? What did he lie about? what you can't just be unspecific if you were if there was a real problem there should have been we've hired an outside law firm to do an investigation like they were so unspecific that it left everything open and you cannot do that they don't understand it gives me the impression this company doesn't the board of the company or the one that won doesn't understand the impact this company is having right like or something don't they it seems like a very inexperienced board.

11:48And I think it is. Well, within a couple hours, it's probably happening. Both sides are going to go on background and try and spin it to their advantage. Yes. Yeah. And so we're going to find out. We're going to find out what happened here. But this is, I mean, I was totally shocked. I do. I got to be honest, though. I do like the fact that this will send a signal to CEOs that everyone has a boss and boards matter. I think it's going to send a signal if it's just a matter of these disagreements over the direction of the company, that Sam Altman is going to be funded tomorrow. And all these people have left.

12:27All these people are leaving. OpenAI will go with him and they will just reformat. You know, let me just say we've done this before. We leave and go to things. Right. And it's never as juicy as it is inside. It's usually just a misalignment. It is indeed. But you just said, you just offered a very realistic scenario here. And that is he's not getting funded tomorrow. He was funded several months ago to do something competitive and didn't disclose it. And I have no evidence of that. I just can't imagine this board would say, OK, this this thing is a rocket ship. It's going to create enough value to solve a lot of problems.

13:08Nonprofit, for profit. But this guy is he just don't fire a CEO on a company that's creating this type of value. No. And if it's a personal thing, they should have said we're doing an investigation right away. Like it should have said. I don't think that's the case, but it left it open. Because would the president leave with him the same day? Yeah, I know that. It feels like they were all working on something together. But I think that they should have been more clear. This statement is clottish to the extreme. I just was like, you're leaving. What happened here? You can't be this unspecific and yet say a word like not candid.

13:44What does that mean? Right? They were specific and deeply unspecific, leaving them open to all kinds of crazy rumors, all kinds of speculation. and pretending it's not the most important company, AI, right? And then surprising Microsoft, their big partner and their big funder. Are you kidding me? Microsoft should have known days in advance what was happening. They had no - Satya looked stupid. He was on stage with them last week. No, Satya didn't know. Let me just say - And that's my point. Satya didn't know. So that means something's wrong with his board. That's my family. Yeah, I think that's fair.

14:20I think that's fair. Governance. It's like you don't tell Sachin Adela. You do not surprise Sachin Adela. That's my feeling. Someone who's giving you billions and billions of dollars in investment. They're going to pull it. You know, they've got their product, but I don't know. When you're building this kind of value and all the things you just talked about, we got Microsoft as a partner. He was on stage with the CEO. I think there's a lot of reasons to not fire him. And they decided to fire him, you know, in a pretty unceremonial fashion. Maybe, maybe there was an article being worked on and they, I don't know.

14:51I would like them to be specific. If it's a really serious personal thing, you need to say we're doing an investigation. If it's not, you need to be more clear. It's really left it far too open. It's really badly done. Badly done, let's just say. Poorly done. I'm getting, I'm also getting a bunch of theories from very smart people in Silicon Valley via text live as we talk. One theory from one person who actually does know quite a bit about this board is that he called them effective altruists. Like they're very like much more oriented towards nonprofit ideas of what what what chat GPT should be versus a commercial operation.

15:28So interesting. A lot of the board, in fact, when you look at it, is of that in that direction. I don't know if it's effective altruism, but it's definitely much more. It's a crunchier group of people, I would say. Yeah, that would. So that sounds like one viable kind of door number three here. But I just would have been shocked they couldn't figure it out, given the amount of money that's being created, that they couldn't have figured out a way to say, OK, well, 10 billion to build, you know, parks and homes for veterans. I would have just thought they would have tried to figure this out. Yeah.

16:03Well, I had a very smart person also just text me, my boring version, bored. Don't launch GPT Store until it's safe. Sam, okay. Also, Sam, we launched GPT Store. Yeah. And it goes back to the notion that you wouldn't be surprised, nor could you, I don't want to say blame Sam Altman, but when he looks around and says, oh, people of my genius and my shareholder value creation can do whatever the fuck I want. The board is just there to rubber stamp it, full stop. Well, we'll enjoy his new company, Closed AI. There you go. Anyway, it's not just OpenAI making news. Elon Musk and X are dealing with a firestorm yet again.

16:41This follows Elon's comments on X endorsing an anti-Semitic conspiracy theory by saying it's the actual truth. Usually he goes interesting or something like this. But now he said this is the actual truth, which was a trope around around Jewish people having a dialectical something or other hatred, a dialectical hatred of white people and trying to replace them by bringing immigrants into this company. It's one of the most more heinous anti-Semitic tropes, replacement theory. So he did that. And then Linda Iaccarino, the pain sponge, was trying to dial it back by saying, we don't agree with this at all, but never mentioned her, the CTO, because the call is coming from inside the house.

17:29Major advertisers on X are now cutting off their spending. Companies are pulling back, including Disney, Warner Brothers Discovery, Lionsgate, Apple, and IBM. I've heard from a half dozen more who are pulling, just calling me, saying, we're going to pull too. Even Comcast NBCUniversal paused advertising. That's Linda Yaccarina's former employer, where she was head of advertising. It's been a deluge in the last few hours. The White House has also chimed in and condemned Musk for boosting anti-Jewish conspiracy theory. The White House spokesman said it was, quote, unacceptable to repeat the hideous lie behind the most fatal act of anti-Semitism in American history at any time, let alone one month after the deadliest day for the jewish people since the holocaust um he's trying to dial it back by saying he's going to kick off everyone who says things like from the river to the sea colonization decolonization and he's saying genocide is not acceptable thank you elon who is who's on the genocides except for the genociders um it was so ridiculous what a Yeah, it's easier to speculate what happened here.

18:35And that is, first off. Go right ahead. Well, the guy gets home late, is ridiculously high, and the real Elon comes out, the angry, whatever, you know. I got a lot of pushback for calling him an anti-Semite. I think he's absolutely an anti-Semite. And then he says this, and advertisers start falling, you know, withdrawing like crazy, including pretty iconic ones. Apple, IBM. And Linda calls him and says, you're going to have to put more money into the company. And all of a sudden, he's like, uh-oh. And then he starts saying, he starts backpedaling. And it's so ridiculous for him to say, we will not tolerate this kind of hate speech unless you're high on ketamine and on the company.

19:17And at four in the morning, start tweeting out anti-Semitic tweets. I mean, it was just so ridiculous for him then to pretend that he's a warrior against these against these hateful terms. And also, I've got to be honest, I'm heartened by this because I have been really disappointed that more people have not been more robust, strong, pushing back on anti-Semitic comments. Well, no well-known people have, no other billionaires. Can I just make this point? I gave him a hard time. Bill Ackman, who's like beating up on college students who, let's just say, probably don't have good judgment, has not word one about this.

19:59About Twitter and Elon? About Elon. Not word one. Here he is, like, doxing kids. I'm sorry, these kids are stupid, and there's not that many of them that are that stupid. Some of them just are calling for a ceasefire, and they can do that in America. Like, we may agree or not agree with them, but this guy was trying to dox them, and then he has not a word for this, which is such an obvious thing. Nobody does. None of them do. This community has a lot of leadership that's Jewish whose parents are Holocaust survivors. They are. And they don't come out against Twitter because they or they want to be involved in SpaceX's IPO.

20:35Right. Exactly. Hey, Bill Ackman. Come on, Bill. And here's the reality. Ninety years ago, we didn't speak up enough. Yeah. And it's happening again. So organizations, people, customers, financiers, and just general U.S. citizens need to speak up and say, I'm selling my fucking Tesla. I am not going on Twitter. Some of them are. Some of Tesla's backers are doing that right now. But let me say, tell me why they can go after students like this. And you could disagree with these students and say they're acting badly and whatever, and then say nothing. Please explain that to me, how you can punch down but not up.

21:16You're 100 % correct. And not only that, quite frankly— I want you to explain it to me since you worked with these terrible people. Since I worked? No, it's indefensible. Not only that, these people should be held to a higher standard than students because they should know better. They are responsible for the livelihoods of other companies. They have enormous influence. When you're a 19-year-old where your prefrontal cortex is still evolving and you're pushing the limits as a function of growth and evolution, you're pushing the limits and the boundaries, which is natural. That's part of growth.

21:53And you say something stupid. We provide young people with a bit of a hall pass. And I have said there's a difference between free speech and hate speech. And if a student is saying hateful things, I think he or she should be – Violent. 100%. Incentive violence should be brought in front of a student board and even maybe just suspended and have to call their parents and say, this is why you're paying for me to be at school and I was suspended. I think that's a learning moment. But when you're the wealthiest man in the world and you're responsible for employees and you have dramatic influence over the behavior, you set a role model for young men and you start talking about retweeting things about replacement theory.

22:34That's totally fucking unacceptable. And what I find is so upsetting is not as many people as I would have thought nor hoped have said, I'm embarrassed I wrote a biography on this guy. We are canceling the movie we were going to do on him. I am selling my Tesla. I am selling my shares. We will not be involved in any financing, wealth management, or debt offerings for any company that this individual is involved in. If we don't cauterize this shit right now, it gets out of control. And I'm just incredibly shocked and disappointed that more people aren't pushing back. They're going to make the movie.

23:16I have written lots of these people, just so you know, I've written a lot of them. And they're just like, well, I'm like, well, what? Well, he doesn't mean it. I'm like, oh, my God, it's the seventh to tenth time he's either either retweeted an anti-Semitic thing. And in this case, he's now gone even further. He agrees with it and he says he agrees with it. I was like, how many times is he going to get a pass here on this stuff from you people? Because you hear I literally I'm like, I'm washing my hands at you people because I just don't even under. I do understand it now. The money, the green is what you're looking at here.

23:50And, you know, and listen, Linda Iaccarino, I don't know what you're going to do here, but don't. Stop going down with this ship. You better find yourself a door you can float on at some point here because this is really appalling. This is appalling. It's appalling you didn't call out your own employee, by the way, the CTO of your company. I don't know. What's going to happen to her? She got to go? oh, I've been told by people close to her that she's going to go down with a ship. That's her attitude. She's in literally an impossible position. She can leave. I think she would do herself well. I'm biased here to say, she doesn't even have to be this specific.

24:28If she said, look, this is a great opportunity, I don't mean to throw the company into more chaos, but I'm just personally not comfortable with some of the actions and words of the person who controls this company. I think she'd get a job offer the next day. Next day. We'd give her a job. Yeah. And not only that, you know what? She already has enough money. Her kids would be proud of her when they're talking about mom. You got to think about, you know how history is going to judge you. It's never the wrong time to do the right thing, especially when you're in a position of economic security and you can afford to.