Paul Graham claims Sam Altman wasn't fired from Y Combinator

Sam Altman walking away from a dissolving OpenAI logo

Image Credits: Darrell Etherington with files from Getty under license

In a series of posts on X on Thursday, Paul Graham, the co-founder of startup accelerator Y Combinator, brushed off claims that OpenAI CEO Sam Altman was pressured to resign as president of Y Combinator in 2019 due to potential conflicts of interest.

“People have been claiming [Y Combinator] fired Sam Altman,” Graham writes. “That’s not true.”

Altman became a partner at Y Combinator in 2011, initially working there on a part-time basis. In February 2014, Graham named him president of Y Combinator.

Altman — along with Elon Musk, Peter Thiel, Y Combinator founding partner Jessica Livingston and others — announced OpenAI as a nonprofit in 2015, raising $1 billion.

Altman for several years split his time between Y Combinator and OpenAI, effectively running both. But — according to Graham — when OpenAI announced in 2019 that it would establish a for-profit subsidiary of which Altman would be CEO, Livingston told Altman that he had to choose one or the other: OpenAI or Y Combinator.

They told him “if he was going to work full-time on OpenAI, we should find someone else to run YC, and he agreed,” Graham writes. “If he’d said that he was going to find someone else to be CEO of OpenAI so that he could focus 100% on YC, we’d have been fine with that too.”

Graham’s retelling of events contradicts reporting that Altman was forced to resign from Y Combinator after the accelerator’s partners alleged he’d put personal projects, including OpenAI, ahead of his duties as president. According to a Washington Post story last November, Graham cut an overseas trip short to personally give Altman the boot.

Helen Toner, one of several ex-OpenAI board members who moved to remove Altman as OpenAI’s CEO over allegations of deceptive behavior before Altman managed to claw the role back, also claimed in an appearance on the Ted AI Show podcast that the true reasons for Altman’s departure from Y Combinator were “hushed up at the time.”

Reportedly, some Y Combinator partners took specific issue with the indirect stake in OpenAI Altman held while Y Combinator’s president. Y Combinator’s late-stage fund invested $10 million in OpenAI’s for-profit subsidiary.

But Graham says that the investment was made before Altman was full-time at OpenAI — and that Graham himself wasn’t aware of it.

“This was not a very big investment for those funds,” Graham wrote. “And obviously it wasn’t influencing me, since I found out about it 5 minutes ago.”

Graham’s posts seem conspicuously timed with an op-ed in The Economist penned by OpenAI board members Bret Taylor and Larry Summers that pushes back against assertions made by Toner and Tasha McCauley, another former OpenAI board member, that Altman can’t be trusted to “reliably withstand the pressure of profit incentives.”

Toner and McCauley might have a point. The Information reports that Altman is considering turning OpenAI into a for-profit corporation as investors, in particular Microsoft, push the firm to prioritize commercial projects.

A timeline of Sam Altman's firing from OpenAI — and the fallout

Sam Altman, Satya Nadella and Ilya Sutskever in an illustration collage

Image Credits: Darrell Etherington with files from Getty under license

In a dramatic turn of events late Friday, ex-Y Combinator president Sam Altman was fired as CEO of AI startup OpenAI, the company behind viral AI hits like ChatGPT, GPT-4 and DALL-E 3, by OpenAI’s board of directors. Then, the company’s longtime president and co-founder, Greg Brockman, resigned — as did three senior OpenAI researchers. And the fallout continues.

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It’s a fast-moving situation that we’re still trying to get to the bottom of. No doubt more will become clear as time goes on. To make it easier to follow all that’s happened in the meantime, though, we’ve put together a timeline; we’ll do our best to keep it current.

Timeline of Sam Altman’s firing from OpenAI

January 5

The identity of OpenAI’s board observer has been revealed. According to Bloomberg, Microsoft has chosen Dee Templeton, VP for tech and research partnerships and operations and an advisor to Microsoft CTO Kevin Scott, as its non-voting board observer. Bloomberg says that Templeton has already begun attending board meetings; The Information previously reported that Templeton was being considered for the role.

November 29

Microsoft gains a board observer

Microsoft will gain representation on the new initial board of directors in the form of a non-voting observer, OpenAI announced. It wasn’t immediately clear who this observer might be — only that they won’t have an official vote in board business.

November 21

Sam Altman, OpenAI reach agreement on return as CEO and ‘initial’ new board

In a sudden late announcement, OpenAI revealed that it and Altman “have reached an agreement in principle” for him to return as the company’s CEO. In addition to Altman’s return, its new “initial” board will include former Salesforce chief executive Bret Taylor, former US Secretary of the Treasury Larry Summers and Quora founder Adam D’Angelo.

Altman also posted about the new deal, giving some insight into the roller coaster that we’ve all been riding since his firing was revealed Friday. In his words, his decision to join Microsoft on Sunday “was the best path for me and the team.” Since then, the new board’s composition and Microsoft’s support appear to have been enough to bring him back to the AI company he co-founded.

Altman and board in talks

OpenAI’s board of directors is reportedly in talks with Sam Altman, ex-Y Combinator president and an OpenAI co-founder, to return to OpenAI as CEO as soon as this week. That’s according to Bloomberg, which in a brief — citing sources close to the matter — said that discussions are happening between Quora CEO Adam D’Angelo, one current member of the OpenAI board, and Altman — and possibly other board members as well.

Board tensions boil over

The New York Times reports that, before his ousting, Sam Altman made a move to push out board member Helen Toner because he thought a paper she had co-written was overly critical of OpenAI. That, among other issues, led to OpenAI’s current predicament. Speaking of, The Times indicates that negotiations to hire Altman back continue — but that one major sticking point remaining is “guardrails” meant to improve Altman’s communication with the board.

https://www.instagram.com/reel/Cz4qQibvH6g/

November 20

Altman joins Microsoft

Sam Altman, Greg Brockman and colleagues announce that they’ll join Microsoft to lead a new AI research team. Nadella leaves the door open to other OpenAI staffers, saying that they’ll be given the resources they need should they choose to join.

Sutskever’s mea culpa

Sutskever publishes a post on X suggesting that he regrets his decision to remove Altman and that he’ll do everything in his power to reinstate Altman as CEO.

Employees threaten to resign

Nearly 500 of OpenAI’s roughly 770 employees — including, remarkably, Sutskever — publish a letter saying that they might quit unless the startup’s board resigns and reappoints the ousted Altman. Later Monday, that number climbed to over 650.

Altman and Brockman considering return

As reported by The Verge, Altman’s move to Microsoft isn’t a done deal — and both Altman and Brockman are still open to returning to OpenAI. That is, if the remaining board members who initially fired him step aside.

OpenAI board considers merger

OpenAI’s board of directors approached Dario Amodei, the co-founder and CEO of rival large-language model developer Anthropic, about a potential merger of the two companies, The Information reports. The approach was part of an effort by OpenAI to persuade Amodei to replace Altman as CEO — but Amodei quickly turned down the CEO offer.

November 19

Altman to meet at OpenAI HQ

According to The Information, Altman is expected to meet at OpenAI’s San Francisco headquarters as executives at OpenAI push to have him reinstated as CEO. Brockman was invited to join — but it’s unclear whether he’ll take execs up on that invitation.

Board negotiations hit a snag

Bloomberg reports that Lightcap and Murati, among others, are pushing the board to reinstate Altman. But unsurprisingly, the directors are resisting. As of midday Sunday, the board hadn’t resigned out of concern over who could replace them, and were vetting candidates. One possible new addition could be Salesforce co-CEO Bret Taylor.

Altman out, Shear in

Altman won’t be returning as CEO, according to a report in The Information citing an internal memo sent by Sutskever. As the search for a new permanent CEO continues, OpenAI has appointed Emmett Shear, the co-founder of video streaming site Twitch, as interim CEO — replacing Murati.

November 18

“Not … in response to malfeasance”

In an internal memo obtained by Axios sent Saturday morning, OpenAI COO Brad Lightcap said yesterday’s announcement “took [the management team] by surprise” and that management had had “multiple conversations with the board to try to better understand the reasons and process behind their decision.” Discussions were ongoing as of Saturday morning, per the memo.

“We can say definitively that the board’s decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices,” Lightcap added. “This was a breakdown in communication between Sam and the board … We still share your concerns about how the process has been handled, are working to resolve the situation, and will provide updates as we’re able.”

OpenAI’s funding in jeopardy

The planned sale of OpenAI employee shares that would value the startup at about $86 billion could be in jeopardy. The Information, speaking to three sources formerly with the company, reports that they no longer expect the sale — led by Thrive Capital — to happen, or, if it does, to come with a lesser valuation because of the recent turn of events.

Altman planning new venture

Altman has been telling investors that he’s planning to launch a new venture, according to The Information. Brockman is expected to join the effort — whatever form it takes. (Possibly an AI chip startup.)

Investors pushing for Altman’s return

Investors — furious at the turn of events — are reportedly exerting pressure on OpenAI’s board to reinstate Altman, going so far as to recruit Microsoft. Nadella is said to be sympathetic.

Board agrees to reverse course — in principle

The Verge reports that the board agreed in principle to resign and to allow Altman and Brockman to return. It waffled, however, missing a deadline yesterday by which many OpenAI staffers were set to leave the company. Altman is said to be ambivalent about coming back and asking for “significant” governance changes.

November 17

Brockman demoted

Brockman says he got a text from Sutskever shortly after noon on Friday asking for a quick call. After sending a Google Meet link, Brockman was told that he was being removed from the board as chairman “but was vital to the company and would retain his role” as president, and that Altman had been fired.

Altman’s firing publicly announced

OpenAI published a post on its blog announcing the executive shake-up. The company’s management team was aware shortly after.

All-hands meeting

OpenAI held an all-hands meeting Friday afternoon during which Sutskever defended Altman’s ouster. He dismissed suggestions that pushing Altman out amounted to a “hostile takeover,” and claimed that it was necessary to protect OpenAI’s mission of “making AI beneficial to humanity.”

Microsoft releases a statement

Satya Nadella, the CEO of Microsoft, a major investor in — and partner with — OpenAI, published a statement about Altman’s firing:

“As you saw at Microsoft Ignite this week, we’re continuing to rapidly innovate for this era of AI, with over 100 announcements across the full tech stack from AI systems, models and tools in Azure, to Copilot. Most importantly, we’re committed to delivering all of this to our customers while building for the future. We have a long-term agreement with OpenAI with full access to everything we need to deliver on our innovation agenda and an exciting product roadmap; and remain committed to our partnership, and to Mira and the team. Together, we will continue to deliver the meaningful benefits of this technology to the world.”

Brockman quits

Brockman announced his resignation from OpenAI, citing “today’s news.” After sending a memo internally, he published the text on X.

Senior OpenAI researchers resign

Three senior OpenAI researchers resign after Brockman, including the director of research Jakub Pachocki and head of preparedness Aleksander Madry.

November 16

Ilya Sutskever schedules call with Altman

According to a post on X (formerly Twitter) from Brockman, Ilya Sutskever, the chief scientist at OpenAI and a co-founder, texted Altman on Thursday evening about scheduling a Friday noon call.

Murati told of Altman’s firing

Brockman alleges that Mira Murati, OpenAI’s CTO and now interim CEO, was informed on Thursday night that Altman would be fired.

Elon Musk sues OpenAI and Sam Altman over 'betrayal' of nonprofit AI mission

Elon Musk sues OpenAI and Sam Altman over 'betrayal' of non-profit AI mission

Image Credits: Michael Kovac / Vanity Fair / Getty Images

Elon Musk has sued OpenAI, its co-founders Sam Altman and Greg Brockman, and its affiliated entities, alleging the ChatGPT makers have breached their original contractual agreements by pursuing profits instead of the nonprofit’s founding mission to develop AI that benefits humanity.

Musk, a co-founder and early backer of OpenAI, claims Altman and Brockman convinced him to help found and bankroll the startup in 2015 with promises it would be a nonprofit focused on countering the competitive threat from Google. The founding agreement required OpenAI to make its technology “freely available” to the public, the lawsuit alleges.

The lawsuit, filed in a court in San Francisco late Thursday, says that OpenAI, the world’s most valuable AI startup, has shifted to a for-profit model focused on commercializing its AGI research after partnering with Microsoft, the world’s most valuable company, which has invested about $13 billion into the startup.

“In reality, however, OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft. Under its new board, it is not just developing but is actually refining an AGI to maximize profits for Microsoft, rather than for the benefit of humanity,” the lawsuit adds. “This was a stark betrayal of the Founding Agreement.”

The lawsuit follows Musk airing concerns about OpenAI’s shift in priorities in the past year. According to the legal complaint, Musk donated over $44 million to the nonprofit between 2016 and September 2020. For the first several years, he was the largest contributor to OpenAI, the lawsuit adds. Musk, who left OpenAI’s board in 2018, has been offered a stake in the for-profit arm of the startup but has refused to accept it over a principled stand, he said earlier.

X, the social network owned by Musk, last year launched Grok, a rival to ChatGPT.

Altman has also addressed some of Musk’s concerns in the past, including the close ties with Microsoft. “I like the dude. I think he’s totally wrong about this stuff,” he said of Musk’s criticisms at a conference last year. “He can sort of say whatever he wants but I’m like proud of what we’re doing and I think we’re going to make a positive contribution to the world and I try to stay above all that.”

OpenAI’s launch of ChatGPT in late 2022 sparked an AI arms race, with rivals still scrambling to match its uncannily human-like responses. Microsoft CEO Satya Nadella landed a gloved jab at the rest of the industry last month. “We have the best model today … even with all the hoopla, one year after, GPT4 is better,” he said. “We are waiting for the competition to arrive. It will arrive, I’m sure, but the fact [is] that we have the … leading LLM out there.”

An email exchange between Musk and Altman, presented as evidence in the lawsuit. Image Credits: TechCrunch/screenshot

The Thursday lawsuit alleges close alignment between Microsoft and OpenAI, citing a recent interview with Nadella. Amid a dramatic leadership shake-up at OpenAI late last year, Nadella stated that if “OpenAI disappeared tomorrow … we have all the IP rights and all the capability. We have the people, we have the compute, we have the data, we have everything. We are below them, above them, around them.” The lawsuit presents this as evidence that OpenAI has strongly served Microsoft’s interests.

The lawsuit also centers around OpenAI’s GPT-4, which Musk claims constitutes AGI — an AI whose intelligence is at par, if not higher, than humans. He alleges OpenAI and Microsoft have improperly licensed GPT-4 despite agreeing that OpenAI’s AGI capabilities would remain dedicated to humanity.

Through the lawsuit, Musk is seeking to compel OpenAI to adhere to its original mission and bar them from monetizing technologies developed under its nonprofit for the benefit of OpenAI executives or partners like Microsoft.

The suit also requests the court rule that AI systems like GPT-4 and other advanced models in development constitute artificial general intelligence that reaches beyond licensing agreements. In addition to injunctions forcing OpenAI’s hand, Musk asks for accounting and potential restitution of donations meant to fund its public-minded research should the court find it now operates for private gain.

“Mr. Altman hand-picked a new Board that lacks similar technical expertise or any substantial background in AI governance, which the previous board had by design. Mr. D’Angelo, a tech CEO and entrepreneur, was the only member of the previous board to remain after Mr. Altman’s return. The new Board consisted of members with more experience in profit-centric enterprises or politics than in AI ethics and governance,” the lawsuit adds.