Venture capitalists and employees could now get some return on the money or sweat they put into the company, but the nonprofit’s board still retained the final word on for-profit activities thanks to several new legal provisions, according to OpenAI.
The Trustees’ primary fiduciary duty remained to maintain its mission of safe development of artificial general intelligence beneficial to all humanity. Only a minority of directors can hold financial interests in the for-profit corporation, and the for-profit corporation’s founding documents require that it prioritize public benefits over profit maximization.
The revised structure unlocked a torrent of funding for OpenAI, particularly from Microsoft, ultimately allowing OpenAI to mobilize the cloud computing power needed to create ChatGPT.
Among the new board members leading this unique structure were Shivon Zilis, longtime associate of Elon Musk and later mother of twins with the entrepreneur, who joined the group in 2019 after being advise. Will Hurd, a former Republican congressman, has registered in 2021.
Concentration of power
In 2023, OpenAI’s board began to shrink, reducing its experience and creating the conditions for Altman’s ouster. Hoffman left in January, according to his LinkedIn profile, and he later discussed potential conflicts of interest with other AI investments. Zilis resigned in March and Hurd in July to focus on an unsuccessful bid for the presidency of the United States.
These departures reduced OpenAI’s board of directors to just six directors, one less than the maximum allowed in its original bylaws. With Brockman, Sutskever and Altman still members of the group, it was split evenly between executives and people outside OpenAI – and was no longer predominantly independent, as Altman had told US senators a few weeks earlier .
The dramatic turning point came on Friday when, according to Brockmanchief scientist Sutskever informed him and Altman of their removal from the board shortly before the changes were publicly announced, which also included Altman’s dismissal as CEO because “he didn’t was not always frank in his communications with the board of directors. Brockman later resigned from his role as president of OpenAI. Sutskever was reportedly concerned about his diminishing role within OpenAI and Altman’s rapid commercialization of his technologies.
The management shake-up plunged OpenAI into crisis, but arguably the board functioned as intended: as an entity independent of the for-profit company and empowered to act as it saw fit to accomplish the overall mission of the project. Sutskever and the three independent directors would form the majority necessary to make changes without notice to the initial statutes. These rules permit the removal of any director, including the president, at any time by his fellow directors, with or without cause.
