A letter to OpenAI employees: reality punch
It will take you 6-14 months to realize something is wrong
Some of my friends might be irked by me penning this. "Come on Jeps, just wish them well! Hope for the best," they say. But why? Why hope for the best when the worst is on their doorstep? I'm all for brutal honesty—I'd rather just tell it like it is, spell out exactly what's looming over them.
Dear OpenAI employees,
If you haven't switched to Signal yet, you're out of the loop. Your colleagues have already started exchanging frantic messages: "What do you know?", "What the fuck just happened?!", "How will this affect my team?", "Is <BLANK> project still on track?". The dismissal of Sam Altman might seem mild in the grand scheme of tech scandals. But as someone who experienced the fallout at DataRobot when founder Jeremy Achin was ousted, I'm in a unique position to discuss the unfolding events and what inevitably comes next. People are creatures of habit, from the board members to many of you. And the more you stick to the script, the more likely you'll find yourself on the sidelines eating cake.
Jeremy Achin's departure was messy—dozens of his loyalists were let go on the same day. It was a true 'Game of Thrones' massacre. In the tech world, certain patterns recur:
Template 1: The board decides that the "visionary" founder isn't the ideal leader to steer the company toward an IPO. It's fairly typical for founders to be dismissed at this mature stage of a company because the financial stakeholders have different priorities. Someone like Sam may assume his public stature makes him "unfireable," but to the board, everyone is expendable especially you.
Template 2: A sales executive steps up as the new company head, the original vision dulls, morale dips, founding engineers leave, and the company slips from its market-leading perch. This scenario played out at DataRobot following Jeremy's coerced departure.
Mira Murati as CEO?
Well, she's the interim—just a placeholder. The board likely knew Sam's tenure was ending even before OpenAI's Dev Day, and the hunt for his replacement probably started earlier. And get this: the incoming CEO's pay package? It's not just double Mira's. We're talking a staggering 10-20 times more. Yes, the disparity is that stark.
They're casting their net over big fish from IBM, Microsoft, Google, and the like, often opting for someone whose expertise isn't in explaining the intricacies of LLMs that doesn’t matter anymore. Don't be surprised if they pick a former CFO, CRO, or CLO too that is common. Brace yourself for an operator, not a dreamer. The era of grand ideas is winding down; the company's in a different growth/risk phase now.
So, could Mira shed her 'interim' tag? It's a long shot, but her best bet would be to orchestrate a major talent exodus. If she could convince a significant number of key players to threaten resignation, she might just gain some leverage. Right now, she's got none. But it's risky business—merely attempting such a move could lead to her own dismissal. There's a chance the board might entertain a co-CEO arrangement if she plays that card. My Bayesian predictor? It's forecasting a new OpenAI CEO announcement within the next 30 days—and it's not Mira, it’s a suit that will be branded to you as someone who is hip. Someone who cares about your vision (their bonus).
Oh wait, I found your new CEO: A board marionette. Prince charming, many of you will be momentarily excited when you hear the announcement. “Wow, that sounds good…”.
How much will your stock appreciate in the future? It took a hit with yesterday's news, but let's be real—its potential for growth pales in comparison to the gains you could see by jumping ship to a new venture. Prepare for an exodus of talent, it won’t be sudden, it will be a steady drip. If Sam and the gang secure funding for a new start-up, how swiftly might they close the gap? That's an enticing prospect: reclaiming control, streamlining their cap table. "But what about their non-compete clauses?" In the AI industry, the market is too vast, and the competition is too keen. They could easily amass boundless capital to fend off any legal battles, with whole nations potentially in their corner. I'd wager investors were tripping over themselves to float them offers—personally, I’d be firing off term sheets without a second thought. No pitch necessary. They have terms sheets now.
So, we're guessing Sam and co. will spin up another AI venture—that’s cool.
Now, on to what unfolds if a corporate 'suit' is brought in to steer the ship. This new exec will be polished, amiable, a recognized figurehead, yet not nearly as tech-savvy as Sam, effectively a marionette of the board. Expect the usual 30-45 day 'listening tour,' feigned interest in your groundbreaking ideas. They may even say yes to many ideas: “Yes that sounds great, we should do that, absolutely…” but ultimately they won’t act. Changes will creep in gradually. At DataRobot, the new guard imported over a hundred buddies from AppDynamics—vacation pals, drinking buddies, many a square peg for a round hole. I doubt it’ll go down exactly like that here, but anticipate a cultural exchange nonetheless. The creme de la creme of OpenAI's workforce will flock to smaller startups promising greater returns, while the risk-averse will hunker down. Do you want to work with the heroes or cowards in the AI army? Big names will exit stage left monthly, a relentless trickle. Morale will seem just within reach, always almost... almost... until it isn't, and the inevitable cuts and austerity measures begin.
Perhaps OpenAI will weather this storm just fine? Hmm, I'm skeptical, remarkable really since two founders are just two people why would it matter? Historically, it really does matter, the vision is withering like the rose on beauty and the beast. The groundbreaking ideas that propelled OpenAI’s success won't fly with a corporate 'suit' at the helm, nor likely within the Microsoft ecosystem. To truly lead the AI revolution, you need the grandest visions. Humanity stands on the brink of something monumental. Education, healthcare—everything is set to transform, with GPT-4's capabilities poised to increase tenfold, a hundredfold, and you had front row seats to this just last week. LLMs are so close to self-improvement… somewhere else.
What's the move for employees? In theory, acting in unison could put you in the driving seat. I harbored similar hopes for DataRobot, particularly when the incoming 'suit' cashed out a cool $20 million in shares personally. But even then, no united front emerged. Why? Because life's responsibilities weigh heavily, people have kids they want to send to college. People were banking on their stock to be life-altering. The focus was on individual gain over the collective vision. I suspect OpenAI will follow suit; the allure of personal wealth—the second home, the dream retirement, that sabbatical filled with travel or fishing—is often too tempting to gamble for the common good. Savor the spoils—I'd genuinely relish being proven wrong by a workforce ready to rise up and seize the reins. Surprise me.
Equity Bind:
Several of you may find yourselves in a bind; resigning means you'll have a standard 90-day window to purchase your stock options. This could necessitate securing complex loans to afford the buyout—a daunting choice lies before you. There were many employees at DataRobot that were financially ruined buying these loans. Personally, I would never take out a loan for stock in a tech company especially if it isn’t controlled by the visionary founder.
Goodness your company is entertaining, sounds like the board that was responsible for ousting Sam might get fired by the investors. Can they do that? Watch… 🍿🍿
Time to go on a long run in the mountains and leave you to your Signal chats this weekend.
Sadly I have seen this play out before. As one of my former leaders said ‘had Oracle treated Dave Duffield & PeopleSoft better during the hostile takeover, there would be no Workday today!’ Think of that! Workday is amazing. So what will play out for Sam? As an innovator the ball is in his court. The empty suits that file in….have you see Squid Games? It’s on Netflix and always in corporate armies.
Yes there is an army rising up to combat the evil which is rooted in the love of money.