Less than a year ago, OpenAI was a name unfamiliar to the mainstream, but by the end of 2022, thanks to the launch of ChatGPT—its flagship product—interest in OpenAI exploded.
Within two months, ChatGPT – one of the first large-language models that was readily accessible to the public – had amassed more than 100 million active users, making it the fastest growing consumer application in history, according to UBS.
ChatGPT’s impact was astounding. With it, users were creating content for social media platforms, business strategies and thought leadership content within seconds. For some, it appeared a threat that would “steal” jobs and crush industries. For others, it was a tool that enabled businesses to work smarter, more efficiently, and cost-effectively.
Its meteoric rise, which signalled clear global demand for AI-based tools, attracted billions of dollars of investment in artificial intelligence platforms. Google launched its large-language model Bard in March 2023, xAI – the AI business owned by Elon Musk – launched Grok earlier this month, and many others now exist.
But despite its pioneering success, OpenAI today stands in a state of crisis.
Last week, OpenAI’s board let go of CEO Sam Altman and President Greg Brockman – the two co-founders of OpenAI who have also become leading global voices on AI. The exit was shrouded in mystery and the Board’s reasons continue to remain unclear.
A lack of transparency over the departure has significantly impacted internal and external stakeholders. According to Wired, 95% of OpenAI’s employees threatened to walk out over Altman’s departure and demanded his reinstatement.Meanwhile, some of OpenAI’s venture capitalist backers voiced support for its employees demands and, according to the FT, were exploring legal measures to reverse the decision to oust Altman.
Succession planning can be one of the most challenging issues to navigate for any business. But, even more so for high-growth, founder-led businesses like OpenAI. That’s why clear, open and honest communication with stakeholders is critical to ensuring that the rationale for leadership changes resonate at all levels and stakeholders buy into the long-term vision for the business. Instead, in this instance, the news was as much of a shock to its employees and investors as the outside world – many of whom felt betrayed by the development.
After a turbulent week, Sam Feltman has re-joined OpenAI. But the knock-on impact for the company, and broader industry, will be significant. Employee and investor confidence in the board’s ability to make business-critical decisions will be frayed. And the OpenAI board, as well as boards of other high-growth tech businesses, have a fresh reminder that while product may seem like everything, the power is in the people behind it.