OpenAI’s Sam Altman returns to Board after probe clears him

OpenAI Chief Executive Officer Sam Altman was cleared of any wrongdoing that would have mandated being fired from the company late last year, according to a report based on a monthslong investigation into the events leading up to his brief ouster.

WilmerHale, the law firm that conducted the inquiry, found that the board’s decision to fire Altman was a “consequence of a breakdown in the relationship and loss of trust between the prior board and Mr. Altman,” the artificial intelligence startup said Friday. It did not arise from concerns about product safety, the pace of development or OpenAI’s finances, it said.

• Also read: Altman is back at OpenAI, but questions remain as to why he was fired in first place

Altman is rejoining the company’s board following the findings. OpenAI’s board is also adding Sue Desmond-Hellmann, who previously was head of the Bill and Melinda Gates Foundation; Nicole Seligman, an ex-Sony Entertainment executive; and Instacart CEO Fidji Simo. The board said it would continue to add new members.

“I’m pleased this whole thing is over,” Altman said at a press conference Friday.

The release of the report findings and the board additions represent perhaps the most significant moves yet to turn the page on a dramatic period that brought the world’s best-known AI startup to the brink of collapse. OpenAI’s board ousted Altman in mid-November, saying it had lost confidence in him as a leader, and alleging that he “was not consistently candid” in his communications with them — but directors provided few other details on what prompted the decision. 

Days after he was fired, the startup agreed to reinstate Altman, replace all but one of its directors and give a nonvoting observer seat to Microsoft Corp., its biggest investor. But Altman and the new board remained tight-lipped on what led to his ouster.

Multiple people familiar with the board’s thinking previously told Bloomberg the directors’ move was the culmination of months spent mulling issues around Altman’s strategic maneuvering and a perceived lack of transparency in his communications with directors. The board had heard from some senior executives at OpenAI who had issues with Altman, said one person familiar with directors’ thinking. 

• Also read: OpenAI will add Microsoft as board observer, plans governance changes

Chief Technology Officer Mira Murati said in a post on X on Friday that she had spoken to the board about Altman’s leadership in advance of his ousting, after being asked for feedback by board members. She also said she “fought their actions aggressively” when they fired him.

Murati’s leadership was instrumental during the turmoil and in “these last few months she has done an amazing job helping to lead the company,” Altman said Friday. “I’m also very appreciative of the OpenAI team for being so resilient and focused during this challenging time.”

The startup did not release the full findings of the review, but in a summary, it said WilmerHale determined that the prior board “did not anticipate that its actions would destabilize the company,” in firing Altman, and acted on an “abridged time frame.” The board also removed the CEO “without advance notice to key stakeholders” nor a “full inquiry or opportunity” for Altman to address concerns. 

In a statement on X, former board members Helen Toner and Tasha McCauley said that they “hope the new board does its job in governing OpenAI and holding it accountable to the mission.” They added: “As we told the investigators, deception, manipulation, and resistance to thorough oversight should be unacceptable.”

Last October, in the run-up to his firing, Altman attempted to have Toner removed from her seat after she co-authored a research paper containing some criticism of OpenAI’s safety practices, Bloomberg previously reported. One concern Altman expressed at the time, according to a person familiar with the matter, was that it would look bad for a board member to say anything critical about the company. OpenAI was under regulatory scrutiny, and Altman feared regulators might conclude that there were deeper issues at OpenAI.

On Friday, Altman apologized for how he handled a “situation” with an unnamed former board member, who he claimed was “harming OpenAI through their actions.” 

“I think I could have handled that situation with more grace and care,” he said.

In the months since Altman returned, OpenAI has worked to maintain its leading position in the AI sector by launching a store for custom versions of its wildly successful chatbot, ChatGPT, and by teasing a new video generation product called Sora. Altman, meanwhile, has been working to raise funding for an ambitious chip venture, according to people familiar with the matter.

But the long shadow of Altman’s brief ouster continues to hang over the company. The Securities and Exchange Commission is investigating whether the company misled its investors during the upheaval last year, according to a person familiar with the matter. And in a lawsuit last week, OpenAI co-founder Elon Musk took aim at the startup’s close relationship with Microsoft, which advocated for Altman’s reinstatement. Musk also claimed the new board was “hand-picked” by Altman.

Until Friday’s announcement, OpenAI’s directors were Bret Taylor, the former co-CEO of Salesforce Inc.; Larry Summers, the former US Treasury secretary; and Adam D’Angelo, a holdover from the previous board and the CEO of question-and-answer site Quora Inc. Microsoft executive Dee Templeton also serves as a nonvoting observer, as Bloomberg has previously reported.

In December, after Altman’s return, Taylor and Summers said in a statement that they interviewed “several leading law firms” before picking WilmerHale attorneys Anjan Sahni and Hallie B. Levin to lead the review. The firm conducted dozens of interviews and reviewed 30,000 documents, Taylor said. 

“Larry, Adam and I are unanimous in our support of Sam continuing as CEO,” Taylor said. 

WilmerHale is one of a handful of top law firms known for conducting high-profile corporate investigations. It has helped conduct investigations on Activision Blizzard Inc., Alphabet Inc.’s Google and Pinterest Inc. One of the lawyers on the OpenAI investigation at WilmerHale also previously represented Caroline Ellison, a top deputy of Sam Bankman-Fried who cooperated with prosecutors in their successful fraud case against the FTX founder.

Based on lessons learned from the review, OpenAI’s board said it has adopted a number of new governance changes, including strengthening the company’s conflict of interest policy, creating a whistleblower hotline for staffers, and launching additional board committees, including a new mission and strategy committee focused on the “implementation and advancement” of the company’s mission.

OpenAI has long said its goal is to develop artificial general intelligence — a powerful type of AI that doesn’t yet exist — that benefits all people.

The new board members will add more gender diversity to OpenAI’s directors. After most of the prior board stepped down, the company replaced them with men, and garnered some criticism for its all-male slate of directors. Taylor said that as the board continues to expand, it will look for additional members who represent “a wide variety of expertise and skills.”

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