OpenAI board scrubbed stabilizing the $90B company after chaos

If hundreds of OpenAI employees bolt, the $90B entity would plummet in value

Firing Altman to be biggest unforced error in Silicon Valley history: Hippeau

Panelists Phil Camporeale and Eric Hippeau provide insight on a “Santa Claus rally” and shock waves to OpenAI on “The Claman Countdown.”

Sam Altman was reinstated as OpenAI's CEO on Wednesday, and most of the modest four-person board was scrubbed after the surprise termination of the AI pioneer last week sent him to Microsoft with co-founder Greg Brockman in tow and leaving hundreds of OpenAI employees threatening to walk.

A new board comprised of Bret Taylor, Larry Summers and Quora CEO Adam D'Angelo has also been established. D'Angelo, the only member of the previous board to remain, had been leading the charge to reinstate Altman, according to Bloomberg.

“We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new initial board of Bret Taylor (Chair), Larry Summers, and Adam D'Angelo. We are collaborating to figure out the details. Thank you so much for your patience through this,” OpenAI wrote on X.

Brockman also shared the developments on X saying “We are so back.”

Wedbush Securities analyst Dan Ives, who told FOX Business on Tuesday that the board's “days are numbered,” said the win is a feather in Microsoft's cap.

“For Microsoft this all ends up like a Cinderella ending as OpenAI will be stronger from an innovation and governance perspective and the MSFT relationship will be even firmer as Redmond and Nadella was the bedrock in backing Altman and OpenAI during this almost week long saga” he wrote in a research note Wednesday.

Microsoft CEO Satya Nadella commended the move and the company's commitment to OpenAI.

“We believe this is a first essential step on a path to more stable, well-informed, and effective governance. Sam, Greg, and I have talked and agreed they have a key role to play along with the OAI leadership team in ensuring OAI continues to thrive and build on its mission,” he said in a post on X.

OPENAI BOARD THAT FIRED ALTMAN WANTS HIM BACK

Ives also noted the nearly week-long chaos threatened to implode a $90 billion entity.

OpenAI was founded as a nonprofit, but later a “capped-profit” company called OpenAI LP was created.

“We are governed by a nonprofit and our unique capped-profit model drives our commitment to safety,” the OpenAI website says.

Still, the company is also a tech startup that has raised billions from investors, including Microsoft, its largest investor, with a stake valued at an estimated $13 billion of the reported $90 billion for the entire enterprise. Microsoft inked a deal with Altman over the weekend following after he was sacked.

Microsoft CEO Satya Nadella, right, speaks as OpenAI CEO Sam Altman looks on during the first OpenAI DevDay conference, Nov. 6, 2023, in San Francisco. (Justin Sullivan / Getty Images)

In addition to D'Angelo, the former board – which was relatively unknown to those outside the tech world – included chief scientist Ilya Sutskever, tech entrepreneur and GioSim Systems CEO Tasha McCauly, and Helen Toner, director of strategy and foundational research grants at Georgetown’s Center for Security and Emerging Technology (CSET), according to OpenAI.

MEET OPENAI BOARD THAT CANNED SAM ALTMAN

CAN OPENAI SURVIVE TURMOIL?

Over the weekend, interim CEO Mira Murati, appointed Friday to replace Altman, was replaced by Emmett Shear.

WHAT TO KNOW ABOUT OPENAI'S NEW INTERIM CEO EMMETT SHEAR

Sam Altman, left, and Ilya Sutskever speak at Tel Aviv University in Israel on June 5, 2023. (Jack Guez / AFP / Getty Images)

Salesforce CEO Marc Benioff, who took advantage of the frenzy, is openly trying to recruit angry staffers to join his suite of companies by throwing offers out via X. It is unclear if those efforts will continue.

“Salesforce and Slack and Tableau will ALL match any OpenAI researcher who has tendered their resignation full cash & equity OTE to immediately join our Salesforce Einstein Trusted AI research teams under Silvio Savarese,” he posted.

Benioff has touted the company's own “Einstein Entrusted AI Research,” named after the famed physicist Albert Einstein, which is, according to the company, “grounded in the fabric of our platform.”

Marc Benioff (Ruben Sprich / File / Reuters Photos)

It's unclear if other companies such as Amazon, Google and Apple, will follow Benioff in his recruiting efforts.

Eric Hippeau of Lerer Hippeau Managing Partners said OpenAI’s talent is the lifeblood of the organization.

“They're going to go to Microsoft, where Sam is going. So, you could have this potential massive migration of the talent to work with the AI, which, carried the product in their heads. And the value of OpenAI would be zero if that happened. So, it's really in the interest of the OpenAI community that Sam comes back, but that really entails that the current board of the nonprofit leave…. Sam will not accept them staying there. So, there's a lot of drama,” Hippeau said during an appearance on “The Claman Countdown” prior to the latest board changes.

This story has been updated to reflect OpenAI's board changes.