All about OpenAI's dramatic firing and rehiring of CEO and why it could mean greater scrutiny

At OpenAI, the new boss appears to be the same as the old boss.

That would be Sam Altman, the 38-year-old CEO whose brief ouster and reported pending return to the San Francisco-based maker of the artificial intelligence tool ChatGPT has been a lot to keep up with.

The recent tumult can roughly be summed up as follows: Altman was ousted from OpenAI last Friday, hired elsewhere by Monday, and on a return path to OpenAI by Tuesday.

Here's a brief look at what unfolded at OpenAI and how it may affect the influential company.

Small company, big visibility

Co-founded by Altman as a non-profit with a mission to safely build AI that outperforms humans and benefits humanity, OpenAI later became a for-profit business — but one still run by its non-profit board of directors.

"For the longest time, this was a company that no one had heard about," said Sarah Kreps, director of Cornell University's Tech Policy Institute, in a telephone interview Wednesday.

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But soon, OpenAI was drawing more attention and investment, including from Microsoft. The explosion of ChatGPT since its arrival last year propelled Altman into the spotlight just as generative AI was becoming rapidly commercialized.

Altman soon became Silicon Valley's most sought-after voice on the promise and potential dangers of this technology.

Kreps says that though there are other big tech leaders with more name recognition, she finds Altman and OpenAI's story "very unique." That's because she says he's become "the global face of this huge technology," while leading an organization with a much smaller employee base than other tech companies like Facebook. 

Why the drama?

A Friday announcement from OpenAI said Altman was found to be "not consistently candid in his communications" with the company's then-board of directors.

The lack of transparency surrounding Altman's firing led to a weekend of internal conflict at the company and growing pressure from investors — particularly Microsoft. 

On Monday, Microsoft hired Altman and OpenAI co-founder and president Greg Brockman, and opened its doors to any OpenAI employees who wanted to join them.

Late Tuesday, OpenAI said it had reached "an agreement in principle" for Altman to return as CEO under a different board of directors.

Both Altman and Brockman celebrated their returns to the company in social media posts early Wednesday.

Media reports suggest some of the now-departed board members differed with Altman about OpenAI's direction. Cornell's Kreps suspects such differences only grew as more investment meant more resources and the ability for the company to move forward faster.

Because Altman and OpenAI are leading players in the field, his sudden ouster and return may raise concerns about trust in a rapidly expanding technology that many are still questioning.

"The OpenAI episode shows how fragile the AI ecosystem is right now, including addressing AI's risks," said Johann Laux, an expert at the Oxford Internet Institute focusing on human oversight of artificial intelligence.

Duncan Cass-Beggs, executive director of the Global AI Risk Initiative at the Centre for International Governance Innovation in Waterloo, Ont., said the recent news stories about OpenAI might help drive more attention to ongoing AI developments, their potential risks and how they should be regulated.

More power, but more scrutiny

Some corporate governance analysts and experts predicted that Altman's return could strengthen his standing at the company — buttressed by strong support from investors, including Microsoft.

"Sam's return may put an end to the turmoil on the surface, but there may continue to be deep governance issues," said Mak Yuen Teen, director of the centre for investor protection at the National University of Singapore Business School.

"Altman seems awfully powerful and it is unclear that any board would be able to oversee him," he said. "The danger is the board becomes a rubber stamp."

Some analysts suggest the management fiasco could ensure that OpenAI executives will proceed more cautiously, as the high-flying startup will now be subject to more scrutiny. Several noted that companies such as Facebook parent Meta have flourished with a powerful CEO despite concerns about corporate governance.

"Sam definitely comes out stronger, but also dirtied and will have more of a microscope from the AI and broader tech and business community," Gartner analyst Jason Wong said. "He can no longer do no wrong."