OpenAI staff threaten to quit unless board resigns

I also hear that revenue from ChatGPT Plus memberships and API access usage is barely enough to cover computing costs, let alone R&D.

If I were the board, I would have waited until OpenAI were profitable and powerful enough to stand on its own — and then pulled the coup, and then leverage that money and power to pursue the mission.

The board seemed to have profoundly overestimated their position of power and killed the engines before even achieving escape velocity.

More Matt Levine commentary, framing this as a board versus staff dispute at a nonprofit:

So a charity to feed the homeless might have to decide whether to spend a marginal dollar of donations on food for the homeless or higher salaries for the staff. It is not obvious that the staff will prefer higher salaries while the board will prefer feeding more clients, but it is possible; really it is a pretty standard story of agency costs, and the board’s role is to manage those costs.

He links to an interesting article about this kind of dispute which I posted here.

Yesterday virtually all of OpenAI’s staff signed an open letter to the board, demanding that the board resign and bring back Altman. The letter claims that the board “informed the leadership team that allowing the company to be destroyed ‘would be consistent with the mission.’” Yes! I mean, the board might be wrong about the facts, but in principle it is absolutely possible that destroying OpenAI’s business would be consistent with its mission. If you have built an unsafe AI, you delete the code and burn down the building. The mission is conditional — build AGI if it is safe — and if the condition is not satisfied then you go ahead and destroy all of the work. That is the board’s job. It’s the board’s job because it can’t be the staff’s job, because the staff is there to do the work, and will be too conflicted to destroy it. The board is there to supervise the mission.

I don’t mean to say that the board is right! The board really are outside kibbitzers! Between OpenAI’s staff, who know what they’re talking about but also kinda like building AI, and OpenAI’s board, who lean more to being AI-skeptical outsiders, I guess I’d bet on the staff being right.[2] (Also if the board’s job is to prevent the development of rogue AI, burning down OpenAI is unlikely to accomplish that, just because there are competitors who will gleefully hire the staff.) I am just saying that this is a standard and real problem in nonprofit governance, and what’s weird about OpenAI is that it’s an $86 billion startup with nonprofit governance.

I guess the other thing to say is that, generally speaking, a staff is often more essential to a nonprofit than a board is? (Except that at a lot of nonprofits — not OpenAI! — the directors tend to also be big donors and fundraisers.) Like, the staff does the work; the board just goes to occasional meetings. If the staff all quit then the nonprofit is in trouble; if the directors all quit they’re pretty replaceable.

…

Obviously another way to look at the OpenAI situation is that OpenAI is an $86 billion tech startup that did some real odd stuff to incinerate most of its value. […] So Bloomberg reports that “some investors were considering writing down the value of their OpenAI holdings to zero.” Eighty-six billion dollars of value evaporated in a weekend.

…

I feel like the lesson here is not so much “don’t invest in startups without vetting the board and ideally getting a board seat for yourself,” and more “don’t invest in nonprofits at an $86 billion valuation.” Which I think has never come up before? Like as far as I can tell no one in human history has ever purchased shares in a nonprofit at an $86 billion valuation? Because purchasing shares in a nonprofit, at any valuation, is not a coherent thing to do? But then OpenAI made it happen, for the first time, and probably also the last.