I think there’s a few big differences between OpenAI and Automattic:
On the “good for the board” side:
1. OpenAI from the POV of investors has both a pretty high p(massive returns) and a pretty high p(no returns). Even if they’re convinced AI is going to swallow the economy, that doesn’t mean OpenAI wins that. This discourages risky moves.
2. The range in outcomes from a Matt-less Automattic are much less varied than for OpenAI. Replacing him isn’t going to sink the company but it’s also not going to have a massive increase in valuation. It’s purely a decision that he’s a risk factor with his behaviour.
3. I’m sure there’s many good staff members in Automattic, but the work they do is pretty standard and understood, so there’s fewer irreplaceable individuals if any of them quit in support of Matt.
4. Because OpenAI is relatively new and has had such high growth, there were both a lot of true believers among the staff that it had to be Altman, and people who had a significant portion of their net worth locked into yet untradable shares that did not want the boat rocked.
5. What openAI hopes to achieve in marketing and policy requires a figurehead and only Altman had mass recognition. Matt’s public awareness is much lower and Automattic’s need for a public facing figurehead is lower.
In the pro-Matt factors:
1. Altman did not have an outright majority of the shares, Matt does
2. He did somewhat prepare by doing waves of voluntary severance to get his internal opponents to leave
it seems like he likely can't just fire all the board members, as some seats may be contractually required to be held by his investors, as part of funding agreements
Though somewhat of a digression I'd just like to jump in so the world doesn't forget that OpenAI was not a company with a valuation at all, it was a charity for the public benefit and is now in private hands, having been basically stolen by any reasonable definition of the word.
You’re not wrong, but I think the alternative future is sama loses control, goes and raises a quick $100M, and hires all the profit-motivated staff to make something that looks like today’s OpenAI.
Dario already showed there was an appetite for this.
A big part in both stories is that the boards were unwilling to actually state what exactly the CEO did wrong or why they have lost confidence - be that professionalism or not wanting to deliver ammunition for lawfare - which perfectly sets up the CEO to position himself as a victim to the greed and power games of the shadowy board
> A big part in both stories is that the boards were unwilling to actually state what exactly the CEO did wrong or why they have lost confidence - be that professionalism or not wanting to deliver ammunition for lawfare - which perfectly sets up the CEO to position himself as a victim to the greed and power games of the shadowy board
Which is really insane when you think about it. The CEO reports to the board, and since when have companies regularly provided real reasons for termination (I understand they try to say as little as possible, because there's no upside for them)?
It's a coup when an underling "fires" his boss and takes control, but some CEOs managed to convince many that it's the opposite (or at least AstroTurf to that effect).
There are companies where the CEO reports to the board, and there are companies where the board exists to keep up appearances. We’re finding out in real time Automattic is the second kind.
This should discourage investors, since an unbridled CEO is bad for them in the long term. But it won’t, because nobody thinks long term anymore.
I think there’s a few big differences between OpenAI and Automattic:
On the “good for the board” side:
1. OpenAI from the POV of investors has both a pretty high p(massive returns) and a pretty high p(no returns). Even if they’re convinced AI is going to swallow the economy, that doesn’t mean OpenAI wins that. This discourages risky moves.
2. The range in outcomes from a Matt-less Automattic are much less varied than for OpenAI. Replacing him isn’t going to sink the company but it’s also not going to have a massive increase in valuation. It’s purely a decision that he’s a risk factor with his behaviour.
3. I’m sure there’s many good staff members in Automattic, but the work they do is pretty standard and understood, so there’s fewer irreplaceable individuals if any of them quit in support of Matt.
4. Because OpenAI is relatively new and has had such high growth, there were both a lot of true believers among the staff that it had to be Altman, and people who had a significant portion of their net worth locked into yet untradable shares that did not want the boat rocked.
5. What openAI hopes to achieve in marketing and policy requires a figurehead and only Altman had mass recognition. Matt’s public awareness is much lower and Automattic’s need for a public facing figurehead is lower.
In the pro-Matt factors:
1. Altman did not have an outright majority of the shares, Matt does
2. He did somewhat prepare by doing waves of voluntary severance to get his internal opponents to leave
Wait, sorry, what, Matt has an outright majority of the (voting) shares?
That changes everything, he can just fire the board members, he's the actual boss (as shareholder) even when he's also their employee (as CEO).
it seems like he likely can't just fire all the board members, as some seats may be contractually required to be held by his investors, as part of funding agreements
1 reply →
OpenAI was a charity, and the alternative was a mass move to Microsoft.
Though somewhat of a digression I'd just like to jump in so the world doesn't forget that OpenAI was not a company with a valuation at all, it was a charity for the public benefit and is now in private hands, having been basically stolen by any reasonable definition of the word.
You’re not wrong, but I think the alternative future is sama loses control, goes and raises a quick $100M, and hires all the profit-motivated staff to make something that looks like today’s OpenAI.
Dario already showed there was an appetite for this.
1 reply →
A big part in both stories is that the boards were unwilling to actually state what exactly the CEO did wrong or why they have lost confidence - be that professionalism or not wanting to deliver ammunition for lawfare - which perfectly sets up the CEO to position himself as a victim to the greed and power games of the shadowy board
> A big part in both stories is that the boards were unwilling to actually state what exactly the CEO did wrong or why they have lost confidence - be that professionalism or not wanting to deliver ammunition for lawfare - which perfectly sets up the CEO to position himself as a victim to the greed and power games of the shadowy board
Which is really insane when you think about it. The CEO reports to the board, and since when have companies regularly provided real reasons for termination (I understand they try to say as little as possible, because there's no upside for them)?
It's a coup when an underling "fires" his boss and takes control, but some CEOs managed to convince many that it's the opposite (or at least AstroTurf to that effect).
There are companies where the CEO reports to the board, and there are companies where the board exists to keep up appearances. We’re finding out in real time Automattic is the second kind.
This should discourage investors, since an unbridled CEO is bad for them in the long term. But it won’t, because nobody thinks long term anymore.
2 replies →
But no one (within a decimal point or two of zero) believes that about either CEO.
Were the OpenAI board members qualified to board members, they seemed like thay had no idea what they were doing.
> why Sam Altman is in charge at OpenAI and not the board members
Did OpenAI have a corporate board try to fire Sam? Or a non-profit board?
What is the distinction you’re trying to make here?
> What is the distinction you’re trying to make here?
Between a corporate board with a fiduciary obligation to its shareholders and a non-profit board with more-ambiguous responsibilities.
Also, Sam didn't pretend to be CEO after he was fired. He rallied to undo the decision.