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OpenAI investors consider suing board after sudden firing of Sam Altman

Following the removal of CEO Sam Altman and the potential for mass staff departures, some investors in OpenAI are reportedly considering legal action against the board, as per sources familiar with the matter.

Investors are exploring their options with legal advisors, raising concerns over potential catastrophic losses if the situation leads to the collapse of the prominent AI startup. Over 700 OpenAI employees have threatened to resign unless the board is replaced.

The unique aspect of this case is that OpenAI is controlled by its non-profit parent company, OpenAI Nonprofit, which aims to benefit humanity rather than OpenAI investors. Microsoft owns 49% of the company, while other investors and employees control 49%, with 2% owned by OpenAI’s nonprofit parent.

OpenAI CEO Sam Altman Ousted, Mira Murati Takes Interim Charge Amid Board Review Findings

Earlier, OpenAI CEO Sam Altman was ousted by the company’s board, sending shockwaves through the US tech industry. Chief Technology Officer Mira Murati has been appointed interim CEO in his place.

The sudden management reshuffle surprised many employees who learned of it through an internal announcement and the company’s public blog. OpenAI stated Altman’s departure resulted from a board review, concluding he lacked consistent candor, hindering the board’s ability to fulfill its responsibilities.

OpenAi investors

Greg Brockman, OpenAI president and co-founder, resigned from the company after stepping down as board chairman. In a post on messaging platform X, he announced, “Based on today’s news, I quit.” OpenAI, backed by significant funding from Microsoft, pioneered the generative AI trend with the release of ChatGPT. The chatbot quickly became one of the world’s fastest-growing software applications, leading to regulatory responses in the EU and the US.

Altman, a serial entrepreneur and investor, was a prominent figure for OpenAI and its generative AI technology. After the blog announcement, Altman expressed his fondness for his time at OpenAI on X and hinted at more details about his future plans later.

Murati, who previously worked at Tesla, joined OpenAI in 2018 and rose to become the Chief Technology Officer, overseeing product launches like ChatGPT. In an emergency all-hands meeting, Murati assured employees that OpenAI’s partnership with Microsoft remains stable, and Microsoft executives, including CEO Satya Nadella, expressed continued confidence in the startup.

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