Sam Altman Fired and Rehired: What Happened at OpenAI in November 2023

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On Friday, November 17, 2023, Sam Altman was watching the Formula 1 Grand Prix in Las Vegas when the OpenAI board called him into a video meeting and took his company away in a few minutes. Five days later he was back, and most of the people who had fired him had to go. It was the fastest and most instructive CEO scandal in tech history, because it was not about money or a romance. It was about one question: who really holds power in a company?

The OpenAI board statement that explained nothing

The OpenAI board wrote that Altman “was not consistently candid in his communications with the board,” which hindered its ability to carry out its responsibilities, and that the board no longer had confidence in his ability to lead the company. Chief technology officer Mira Murati became interim CEO. Greg Brockman lost his seat as board chair and quit a few hours later. The company did not say what the lack of candor referred to.

According to accounts the media gathered later, Altman learned of the decision only minutes before it was announced, and Microsoft, OpenAI’s largest investor, roughly a minute before. The board had six members at the time: Altman, Brockman, Ilya Sutskever, Adam D’Angelo, Tasha McCauley and Helen Toner. The four members other than Altman and Brockman were enough to remove him.

Why the board was able to fire Altman

OpenAI was not an ordinary company. The for-profit business was controlled by a nonprofit, and its board answered not to shareholders but to a mission: the safe development of artificial intelligence. Microsoft had invested billions of dollars but had no seat on the board. Investors, employees with equity and partners therefore had no formal say. Four directors could remove the CEO without warning anyone, and they did.

What happened next showed that formal power is one thing and real power is another.

Five days: the OpenAI timeline

• November 17, Friday. Altman is removed. Murati becomes interim CEO. Microsoft shares close the session down 1.7%, at $369.85.
• November 18, Saturday. The board discusses bringing Altman back. Microsoft and the investment firm Thrive Capital apply pressure. According to The Information, the firing threatens an employee share sale at an $86 billion valuation.
• November 19, Sunday. Talks fall apart. The board names a second interim CEO in three days: Emmett Shear, the former head of Twitch.
• November 20, Monday. Satya Nadella announces that Altman and Brockman are joining Microsoft to lead a new research team. More than 700 of OpenAI’s roughly 770 employees sign a letter demanding the resignation of the entire board and threatening to move to Microsoft, which according to the letter had secured positions for everyone. Sutskever, one of those behind the firing, signs as well. Microsoft shares rise 2.1%, to $377.44.
• November 21, Tuesday evening. OpenAI announces an agreement in principle: Altman returns as CEO, and the new board is Bret Taylor as chair, Larry Summers and Adam D’Angelo, the only member of the old board.

The board had the formal right to fire the CEO. It had nobody who would follow it.

What the WilmerHale review found

The new board commissioned the law firm WilmerHale to review the whole affair. The lawyers went through about 30,000 documents and conducted dozens of interviews. On March 8, 2024, OpenAI published a summary: the removal was the result of a “breakdown in the relationship and loss of trust” between Altman and the prior board, the board had broad authority, but Altman’s conduct “did not mandate removal.” According to Bret Taylor, the cause was not concerns about product safety or finances, and the previous board had acted without warning key partners. The full report was not published. Altman returned to the board, joined by Sue Desmond-Hellmann, Nicole Seligman and Fidji Simo.

Helen Toner gave her own account in May 2024 on The TED AI Show podcast. Among other things, she claimed that the board learned of the November 2022 launch of ChatGPT from Twitter and that Altman withheld information from the board. OpenAI responded that it was disappointed Toner kept revisiting these matters. These are her claims, not findings of the WilmerHale review.

OpenAI valuation before and after the crisis

OpenAI was not publicly traded, so the only daily barometer was Microsoft’s stock price. Microsoft lost little during the whole crisis: Friday’s 1.7% drop was recovered on Monday, and a week after the firing the stock was 0.3% higher than before it.

In less than 2.5 years after Altman’s return, OpenAI’s valuation grew roughly tenfold. The market judged who had won.

What the OpenAI crisis teaches about Nvidia

The OpenAI affair is a mirror image of Nvidia’s. At OpenAI, the board had full power but not the backing of the people the company depended on, and it had to back down. At Nvidia, the board spent years not using the power it had. The bylaws allowed a simple majority of directors to remove the CEO, and ten of the eleven board members were independent. Even so, the company had no board chair and no named successor.

One mechanism is common to both: everything depended on a single person who was the face of the product, the partner of the biggest customers and a magnet for employees. At OpenAI, that dependence saved the CEO. At Nvidia, when reports emerged about espionage, an affair and a relationship with a subordinate, it did not. The difference lies in what each case was about. Altman was accused of a lack of candor toward the board, which the review did not consider grounds for removal. Huang himself admitted to infidelity, and the Nvidia board accepted his resignation after four days.

The second lesson concerns partners. In November 2023, Microsoft built an alternative for Altman in three days and won the negotiation with it. In November 2026, nobody built an alternative for Huang, and the most important players in Washington were distancing themselves from the affair. I cover the full chronicle of those days in my report Fifteen Days That Changed Nvidia.

Frequently asked questions

Why was Sam Altman fired from OpenAI?

On November 17, 2023, the board wrote that Altman was not consistently candid in his communications with the board. No details were given. The WilmerHale review later concluded that it came down to a breakdown in the relationship and a loss of trust, and that Altman’s conduct did not mandate removal.

How many days was Altman out as OpenAI CEO?

He was removed on Friday, November 17, 2023, and OpenAI announced the agreement on his return on the evening of Tuesday, November 21. During that time the company had two interim CEOs: Mira Murati and Emmett Shear.

What happened to the board members who fired Altman?

Only Adam D’Angelo remained from the old board. Helen Toner, Tasha McCauley and Ilya Sutskever did not join the new board.

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