OpenAI: The Biggest Soap Opera of 2023 🍿🍿🍿 - SWI #46

Read time: 4 mins

Have you been following the absolute SOAP OPERA that’s been OpenAI in the last week?

There’s so much to learn from this popcorn-worthy saga that, even though it’s still unfolding, we wanted to share the golden nuggets so far, so you can use them in your business.

Let’s set the scene:

• OpenAI are one of the quickest growing companies in the world. It was founded in 2015 and was recently valued at $90 Billion.
• The team, led by CEO Sam Altman, is responsible for the creation of ChatGPT, the AI language model that’s been the foundation of bringing Artificial Intelligence to businesses and your average Joe.
• Earlier this year, Microsoft invested +$10 Billion dollars in OpenAI to position Microsoft as an AI leader.
  
  

Then late last week, things got crazy:

Friday:

• OpenAI announces that CEO Sam Altman has been fired and is leaving the company immediately. They don’t explain why.
• Sam posts on X (formerly Twitter) that he was asked to join a virtual meeting via text message and was fired by the board 15 minutes later on Google Meets.
• OpenAI's major investor, Microsoft, says they had no idea this was coming (they found out 1 minute before Sam). Microsoft shares start falling.
• OpenAI staff threaten to leave if the board doesn’t change their decision
  
  

Saturday:

• We hear rumors that the OpenAI board might reverse their decision, and bring Sam back as CEO.
• Microsoft CEO Satya Nadella takes the lead in negotiating an outcome between Sam and the board.
  
  

Sunday:

• Negotiations end, confirming Sam is still fired as CEO.
• OpenAI employees start quitting.
  
  

Monday:

• Twitch co-founder Emmet Shear is named OpenAI's new new interim CEO.
• Microsoft’s Satya Nadella announces Sam is joining Microsoft to lead their AI research team, and their stock surges to all-time highs.
• Over 90% of staff have signed a petition to remove the OpenAI board because of the absolute debacle they’ve caused.
• Microsoft announces that any staff leaving OpenAI will be welcome at Microsoft.
  
  

Rest of the week:

• Pressure increases and OpenAI discusses a potential return of Sam into the CEO role, which Microsoft supports.
• Sam agrees to return to OpenAI, and the board members who originally voted him out are ousted. It's a full 180 in less than a week.
  
  

Phew.

In less than a week, Sam went from OpenAI CEO, to fired, to joining Microsoft, to OpenAI CEO again.

But despite the craziness, it's important to note:

We don't know all the details of what actually happened.

There may be information we're unaware of that will change our perspective on the situation.

However, we still believe there are valuable lessons from the drama that happened and want to share them with you.

Here are 3 of our favourites (plus a bonus):

3 LESSONS FOR BUSINESS LEADERS FROM THE OPENAI SOAP OPERA

1) Always Turn a Crisis into an Opportunity:

Satya Nadella at Microsoft was brilliant here.

He knew that it was vital to retain talent in a complicated situation, and his quick action and leadership were masterful.

His moves throughout the week not only avoided significant devaluing of their share price, but actually CREATED billions of dollars of value, with Microsoft hitting and maintaining an all-time stock high.

Whenever a crisis strikes in your business, always look for the opportunities within it, and take action to leverage it.

2) Manage Your Risks:

The OpenAI board really messed up by not managing their risks well.

They genuinely seemed to underestimate (or not consider at all) the potential fallout from the way they handled Sam's departure.

If they had, they could have taken measures to avoid the staff departures and the petition calling for their replacement.

It’s a vivid reminder of the importance of risk management in navigating critical decisions within a company.

3) Get Your Governance Right:

A board’s role is to protect the company and ensure its prosperity.

This means having an experienced & capable set of people guiding the ship, using established processes for making big decisions, and ensuring independent reviews before implementing major changes.

OpenAI’s board missed the mark here - they didn’t have the right people, processes, and safeguards in place to prevent the soap opera.

Big or small, every business needs the right governance structures to protect themselves and support their business.

Bonus:

Don’t be a jerk.

Don’t fire people over Google Meets.

Choose a more personal approach - a 1:1 meeting, a dinner, or some alternative to work out a mutually beneficial solution.

Not only is it kinder, but word gets around.

How you treat your staff is a reflection on you, and will impact whether people want to work with you and invest in you.

We’ll always advocate for learning from current and past events, so will keep a close eye on this unfolding soap opera.

We can’t wait to share more insights over time.

Thanks for reading!

Speak soon,

Lynne and Steve

TLDR:

The OpenAI soap opera can teach us lots about what to do (and what not to do) in our own businesses, including:

1. Always turn crises into opportunities.
2. Make sure you manage your risks.
3. Get the right governance in place for your business.
4. Don’t fire people in virtual meetings!

Extra Resources:

Check out this interview with Sam Altman from the New York Times podcast Hard Fork, which was conducted only 2 days BEFORE he was fired. It gives great insights into Sam and why he's a controversial figure in the tech space, plus a good summary of the drama since the firing too. 

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