I Fought the Law and the Law Won.

OpenAI. What a cluster.

If you’ve taken a breath of media-infused oxygen or even glanced at your screen over the past 10 days, you can’t have helped but catch the OpenAI drama: boardroom coup, CEO dismissed, Silicon Valley tempest, employee uprising, CEO returned to power, board of directors reconstituted.

So, what could I, a non-techie in Boise, Idaho, bring to the conversation that would warrant a few minutes of your time?

I think it was a battle between the business model of shareholder vs stakeholder and a clash over 🏎️ ⛑️ 💰.

(Read that: speed, safety, and money.)

Here’s my take: I don't necessarily think OpenAI's termination of a popular CEO was a massive failure in corporate governance, which is how most in the tech and business world are framing it (with disgust, I might add). What if it were actually a triumph in governance – just not the outcome the “smart money” of Silicon Valley wanted?

Methinks what may have happened is that the nonprofit board of directors overseeing the for-profit operating enterprise, which has been hammered in the media, may actually have made a decision to prioritize safety that aligned with OpenAI’s mission to “ensure that artificial general intelligence—AI systems that are generally smarter than humans—benefits all of humanity.”

I’ll hypothesize here, as there’s much that’s still unknown from parties who have yet to convey their sides of the story. I’m guessing CEO and Co-founder Sam Altman and others increasingly wanted to push speed of development in a hyper-competitive AI market. The board was uncomfortable with this direction, as its priority was safety of development and a more measured approach dictated, depending upon how you wanted to interpret it, by the mission statement. And the money side of this three-sided equation? Well, we all know where the money side of the equation falls when push comes to ROI.

Sure, OpenAI's corporate structure is different, progressive (capped profit, anyone?), and perhaps unwieldy for those accustomed to a streamlined corporation serving only its shareholders. But it was created this way for a reason, primarily for research and guardrails in developing such a consequential technology. One of its competitors, Anthropic (written about here, Friends with Benefits), founded by ex-OpenAI executives with a safety bent, has a similarly progressive corporate structure, forming itself as a Long-Term Benefit Trust and a Delaware Public Benefit Corporation. Perhaps it will hold up better when tested in the crux of money meets mission.

OpenAI's board obviously underestimated the shitstorm it ignited when money collided with mission as it fired co-founder and CEO Sam Altman. Here's where we stand as of today: Altman has returned, the employees have been retained, the nonprofit directors, with the exception of one holdover, have been ousted, and the investors, from Microsoft to VCs, appear to have to be sanguine. Same as it ever was. Wagon’s ho!

I’d like to note that no female directors have been appointed to replace the two women who resigned from the nonprofit board, leaving its reconstituted version familiarly all male and firmly in the sway of for-profit guardians. Like the old Bobby Fuller Four song says, paraphrasing, “They fought the law and the law won. 💰

So, highly speculative, yes. I’m guessing we’ll know more by end of year as to what motivations sparked these actions. But now, looking at this upheaval from afar, I can’t help but think of a famous quote from the Vietnam War: “We had to destroy the village in order to save it.”  Something at OpenAI has definitely been destroyed. The question is: What did we save?

 Godspeed, friends.

Russ

💬 Quote of the Week

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Upton Sinclair

💥 Quick Hits

• Could your community become a City of Good? - For Giving Tuesday, I wrote an op-ed published by the Idaho Statesman about a nonprofit I co-founded during the pandemic.

🤔 Trivia Time

Since today is #GivingTuesday, here's your trivia question - this day of charitable giving was started in 2012 by whom?

• Bill and Melinda Gates Foundation
• The 92nd Street Y and the United Nations Foundation
• Dolly Parton
• MrBeast
• The United Way

Today's trivia answer can be found at the bottom of this newsletter.‌‌‌‌‌

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Trivia Answer‌

The 92nd Street Y in New York and the United Nations Foundation introduced Giving Tuesday with the idea that there would be interest in giving back after several days of big sales and rampant consumption. According to Vox, "“I remember [92nd Street Y director] Henry Timms saying, ‘All the days of the week are going to be taken, we should grab Tuesday,’” said Rob Reich, a professor of political science and philosophy at Stanford who studies philanthropy and participated in the development of Giving Tuesday.

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