Sam Altman, OpenAI, and The Importance of Corporate Governance

The sudden firing of CEO Sam Altman by OpenAI’s three independent directors highlights concerns about whether a leading AI company, susceptible to internal conflict and unclear accusations, can be trusted to develop a technology with far-reaching consequences for billions of people. This paper examines how OpenAI’s board of directors terminated CEO Sam Altman’s employment, a decision that risked hundreds of highly skilled employees walking out the door, disrupted billions of dollars in value, and jeopardized critical knowledge of this important technology. It is hoped that corporate directors—whether at for-profit and non-profit companies—along with venture capitalists, technologists, and government regulators can draw valuable lessons from this near-disastrous crisis. This paper proceeds in five parts: first is a discussion about the significance of artificial intelligence; second is a look at OpenAI's history, mission, relationship with Microsoft, and unique corporate structure; third, the importance of professional, experienced corporate governance is discussed; fourth is an examination of the OpenAI governance crisis culminating with the ouster of CEO Sam Altman on November 17, 2023; and last, we conclude.