OpenAI Negotiations Stall Over Legal Liability Concerns Amid Push to Reinstate Altman as CEO

OpenAI Negotiations Stall Over Legal Liability Concerns Amid Push to Reinstate Altman as CEO
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Update 11:45PM: New developments have emerged around OpenAI's leadership crisis. Bloomberg is reporting that Interim CEO Mira Murati is seeking to re-hire ousted CEO Sam Altman and former President Greg Brockman, though their exact roles are still being negotiated. At the same time, members of the OpenAI board are also searching for a new permanent CEO to succeed Altman, potentially setting up a power struggle. The board has reached out to at least two external executives about the CEO position.

These parallel efforts underscore the deep internal divisions within OpenAI. While Altman retains the backing of employees, investors and Murati herself, some board members remain committed to choosing a different leader.

It remains uncertain whether Altman and Brockman will return in any capacity, or if the board can find a mutually agreeable new CEO. The situation remains fluid, with no clear resolution in sight. The outcome of these negotiations will likely have far-reaching implications for the future direction of OpenAI, particularly in its approach to the development and deployment of its AI technologies.

Efforts to reinstate ousted OpenAI CEO Sam Altman have reached an impasse in negotiations with the board over demands that Altman be absolved of any wrongdoing related to his termination, according to people familiar with the private talks. This has led to a standoff, with a deadline set for 5 PM PT today for the board's decision.

Bloomberg is reporting that Altman and other key leaders are open to him returning as CEO but want to see governance changes, including the removal of existing board members. Altman is also seeking a statement from the board absolving him of culpability for his firing on Friday.

However, board members are so far resisting issuing such a statement due to potential legal liability concerns, according to sources.

Altman was abruptly fired on Friday by the board led by Chief Scientist Ilya Sutskever, who claimed Altman was not consistently candid in communications with the board. This shocked many OpenAI executives, including Interim CEO Mira Murati, Chief Strategy Officer Jason Kwon and Chief Operating Officer Brad Lightcap, who are now pushing for Altman's reinstatement.

Altman and Brockman were seen earlier this afternoon at OpenAI's headquarters, fueling speculations about a potential resolution.

Microsoft CEO Satya Nadella is said to be personally assisting Murati in discussions around reinstating Altman. The Redmond giant is now considering taking an active role on the board if Altman returns as CEO, according to sources familiar with the private talks. Microsoft could potentially take a formal board seat or serve as a non-voting board observer.

While unlikely to take a board seat himself, Nadella could appoint a deputy like Chief Technology Officer Kevin Scott, who helped orchestrate Microsoft's original 2019 partnership with OpenAI.

As OpenAI's largest backer with over $13 billion invested, Microsoft is deeply interested in the leadership crisis. Microsoft executives were caught off guard by Altman's sudden ouster on Friday. Now Microsoft is working behind the scenes to smooth the path for Altman's potential return.

If Altman does not return however, Microsoft is considering investing in his new venture.

Names proposed for a new OpenAI board include former Salesforce co-CEO Bret Taylor, who recently started an AI venture; former Yahoo CEO Marisa Mayer; Airbnb co-founder Brian Chesky; Sequoia managing partner Roelof Botha; and Reid Hoffman, among others.

With Altman retaining staff loyalty and the backing of key investors, he holds negotiating leverage. But the board resisting absolving him of wrongdoing remains a major sticking point. The high-stakes talks are fluid though some resolution could come soon.

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