ChatGPT Maker OpenAI Ousts CEO Sam Altman

OpenAI CEO Sam Altman participates in a discussion entitled "Charting the Path Forward: The Future of Artificial Intelligence" during the Asia-Pacific Economic Cooperation (APEC) CEO Summit, Thursday, Nov. 16, 2023, in San Francisco. (AP)
OpenAI CEO Sam Altman participates in a discussion entitled "Charting the Path Forward: The Future of Artificial Intelligence" during the Asia-Pacific Economic Cooperation (APEC) CEO Summit, Thursday, Nov. 16, 2023, in San Francisco. (AP)
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ChatGPT Maker OpenAI Ousts CEO Sam Altman

OpenAI CEO Sam Altman participates in a discussion entitled "Charting the Path Forward: The Future of Artificial Intelligence" during the Asia-Pacific Economic Cooperation (APEC) CEO Summit, Thursday, Nov. 16, 2023, in San Francisco. (AP)
OpenAI CEO Sam Altman participates in a discussion entitled "Charting the Path Forward: The Future of Artificial Intelligence" during the Asia-Pacific Economic Cooperation (APEC) CEO Summit, Thursday, Nov. 16, 2023, in San Francisco. (AP)

The board of the company behind ChatGPT on Friday fired OpenAI CEO Sam Altman - to many, the human face of generative AI - sending shock waves across the tech industry.

OpenAI's Chief Technology Officer Mira Murati will serve as interim CEO, the company said, adding that it will conduct a formal search for a permanent CEO.

"Altman's departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities," OpenAI said in the blog without elaborating.

Greg Brockman, OpenAI president and co-founder, who stepped down from the board as chairman as part of the management shuffle, quit the company, he announced on messaging platform X late on Friday. "Based on today's news, i quit," he wrote.

The departures blindsided many employees who discovered the abrupt management change from an internal message and the company's public facing blog. It came as a surprise to Altman and Brockman as well, who learned the board's decision within minutes of the announcement, Brockman said.

"We too are still trying to figure out exactly what happened," he posted on X, formerly Twitter, adding, "We will be fine. Greater things coming soon."

The now four-person board consists of three independent directors holding no equity in OpenAI and its Chief Scientist Ilya Sutskever. The organization did not immediately answer a request for comment on Brockman's claims.

Backed by billions of dollars from Microsoft, which does not have a board seat in the non-profit governing the startup, OpenAI kicked off the generative AI craze last November by releasing ChatGPT. The chatbot became one of the world's fastest-growing software applications.

Trained on reams of data, generative AI can create human-like content, helping users spin up term papers, complete science homework and even write entire novels. After ChatGPT's launch, regulators scrambled to catch up: the European Union revised its AI Act and the US kicked off AI regulation efforts.

Altman, who ran Y Combinator, is a serial entrepreneur and investor. He was the face of OpenAI and the wildly popular generative AI technology as he toured the world this year.

Altman posted on X shortly after OpenAI published its blog: "i loved my time at openai. it was transformative for me personally, and hopefully the world a little bit. most of all i loved working with such talented people. will have more to say about what’s next later."

Altman did not respond to requests for comment.

Murati, who has worked for Tesla, joined OpenAI in 2018 and later became chief technology officer. She oversaw product launches including that of ChatGPT.

At an emergency all-hands meeting on Friday afternoon after the announcement, Murati sought to calm employees and said OpenAI's partnership with Microsoft is stable and its backer's executives, including CEO Satya Nadella, continue to express confidence in the startup, a person familiar with the matter told Reuters.

The Information previously reported details of the meeting.

"Microsoft remains committed to Mira and their team as we bring this next era of AI to our customers," a spokesperson for the software maker told Reuters on Friday.

In a statement published on Microsoft's website, Nadella said: "We have a long-term agreement with OpenAI... Together, we will continue to deliver the meaningful benefits of this technology to the world."

Earthquake

The shakeup is not the first at OpenAI, launched in 2015. Tesla CEO Elon Musk once was its co-chair, and in 2020 other executives departed, going on to found competitor Anthropic, which has claimed it has a greater focus on AI safety.

Well wishers and critics piled onto digital forums as news of the latest shuffle spread.

On X, former Google CEO Eric Schmidt called Altman "a hero of mine," adding, "He built a company from nothing to $90 Billion in value, and changed our collective world forever. I can't wait to see what he does next. I, and billions of people, will benefit from his future work- it's going to be simply incredible."

"This is a shocker and Altman was a key ingredient in the recipe for success of OpenAI," said Daniel Ives, an analyst at Wedbush Securities. "That said, we believe Microsoft and Nadella will exert more control at OpenAI going forward with Altman gone."

The full impact of the OpenAI surprise will unfold over time, but its fundraising prospects were an immediate concern. Altman was considered a master fundraiser who managed to negotiate billions of dollars in investment from Microsoft as well as having led the company's tender offer transactions this year that fueled OpenAI's valuation from $29 billion to over $80 billion.

"In the short term it will impair OpenAI's ability to raise more capital. In the intermediate term it will be a non-issue," said Thomas Hayes, chairman at hedge fund Great Hill Capital.

Other analysts said Altman's departure, while disruptive, would not derail generative AI's popularity or OpenAI or Microsoft's competitive advantage.

"The innovation created by OpenAI is bigger than any one or two people, and there is no reason to think this would cause OpenAI to cede its leadership position," said D.A. Davidson analyst Gil Luria. "If nothing else, Microsoft's stake and significant interest in OpenAI's progress ensure the appropriate leadership changes are being implemented."

As late as Thursday evening, Altman showed no signs of concern at two public events. He joined colleagues in a panel on the sidelines of the Asia-Pacific Economic Cooperation (APEC) conference in San Francisco, describing his commitment and vision for AI.

Later he spoke at a Burning Man-related event in Oakland, California, engaging in an hour-long conversation on the topic of art and AI. Altman seemed relaxed and gave no indication anything was wrong, but left right after his talk was over at 7:30 p.m.

The event organizer said at the event that Altman had another meeting to attend.



Musk’s Social Media Firm X Bought by His AI Company, Valued at $33 Billion

 xAI and X logos are seen in this illustration taken, March 28, 2025. (Reuters)
xAI and X logos are seen in this illustration taken, March 28, 2025. (Reuters)
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Musk’s Social Media Firm X Bought by His AI Company, Valued at $33 Billion

 xAI and X logos are seen in this illustration taken, March 28, 2025. (Reuters)
xAI and X logos are seen in this illustration taken, March 28, 2025. (Reuters)

Elon Musk's xAI has acquired X in a deal that values the social media platform at $33 billion and allows the value of his artificial intelligence firm to be shared with his co-investors in the company formerly known as Twitter.

The deal could also help xAI's ability to train its chatbot known as Grok.

"xAI and X's futures are intertwined," Musk, who also heads automaker Tesla and SpaceX, wrote in a post on X: "Today, we officially take the step to combine the data, models, compute, distribution and talent."

He said the combination values "xAI at $80 billion and X at $33 billion ($45B less $12B debt)".

Representatives for X and xAI did not immediately respond to requests for comment. Much of the deal's specifics remain unclear, such as how X's leaders would be integrated in the new firm or whether there would be regulatory scrutiny.

Musk, the world's wealthiest man, is also a close ally of US President Donald Trump and heads the Department of Government Efficiency.

D.A. Davidson analyst Gil Luria said the price tag for X of $45 billion when debt was included was not a coincidence. "It is $1 billion higher than the take-private transaction for Twitter in 2022."

An investor in xAI who declined to be identified said they were not surprised by the deal, viewing it as Musk consolidating his leadership and management at his own companies.

Musk did not ask investors for approval but told them that the two companies had been collaborating closely and the deal would drive deeper integration with Grok, the investor said.

OPENAI RIVALRY

Musk's xAI startup was launched less than two years ago and recently raised $10 billion in a funding round that valued the company at $75 billion, according to a media report.

It competes with the likes of Microsoft-backed OpenAI as well as with Chinese startup DeepSeek.

In February, Musk, 53, made a $97.4 billion bid with a consortium for OpenAI, which was rejected and he has sued to prevent the ChatGPT maker from converting from a non-profit to a for-profit business. A judge this month denied Musk's request for a preliminary injunction that would prevent the changeover.

As competition in AI intensifies, xAI has been ramping up its data center capacity to train more advanced models, and its supercomputer cluster in Memphis, Tennessee, called "Colossus," is touted as the largest in the world.

xAI introduced Grok-3, the latest iteration of its chatbot, in February.

The X platform could serve to further distribute xAI products, while also providing a real-time feed of users' musings, screenshots and other data.

After buying Twitter, Musk gutted the company's workforce, prompting advertisers to flee the platform and a rapid decline in revenue. Recently, brands have been returning to X as Musk's influence in the Trump administration grows.

The seven banks that extended $13 billion in loans to Musk to buy X kept the debt on their books for two years until they were able to sell it all at once last month, according to a source familiar with the transactions.

This was made possible after a surge in investor interest for exposure to AI companies along with X's improved operating performance over the previous two quarters, among other factors, according to two people familiar with the matter.

After the merger, investors who bought the debt from the banks will profit, said Espen Robak, founder of Pluris Valuation Advisors, which specializes in illiquid assets. "For sure the debt is worth more now, if not fully paid off."

Separately, a US judge on Friday rejected a bid by Musk to dismiss a lawsuit claiming he had defrauded former Twitter shareholders by waiting too long to disclose his initial investment in the company.