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HomeTechnologySam Altman Was Exposed By OpenAI's Unusual Business Structure. He's Now Gone

Sam Altman Was Exposed By OpenAI’s Unusual Business Structure. He’s Now Gone

Sam Altman was taken aback when he was abruptly fired from OpenAI on Friday due to the peculiar organisational structure of the company, which also undermined his standing as CEO.

It is uncommon for founders of companies they assisted in co-founding to be fired. Travis Kalanick, the founder of Uber, for instance, was only fired following a flurry of publications regarding privacy concerns and claims of sexual harassment and discrimination at the ride-sharing business.

However, Altman lacked Kalanick’s authority, as did co-founder Greg Brockman, who also departed OpenAI on Friday.

Senator John Kennedy’s response to Altman’s statement, “I have no equity in OpenAI,” during a May Senate hearing on artificial intelligence provided some hinting.

Kennedy made the now-famous quip, “You need a lawyer or an agent.”

The organization’s structure clarifies how he ended up in a precarious situation and, as he put it on Saturday, felt “a little screwed.”

The profit structure cap of OpenAI

Thinking of OpenAI’s structure as a waterfall is the simplest way to understand it. With the board of directors at the helm. The bottom spot goes to OpenAI Global, the capped-profit business in which Microsoft invested billions and whose face is now widely recognised: Sam Altman. There are few items in the centre.

Let’s begin at the top of the waterfall, then. OpenAI’s 501(c)(3) charity, OpenAI Inc., is governed by the board of directors, which is the final decision-making body and the one who fired Altman. The nonprofit that you may be familiar with is that charity. In order to “guarantee that safe artificial general intelligence is developed and benefits all of humanity,” it was founded.

Source (CNBC)

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