OpenAI Will Bend The Knee & Kiss The Ring

Altman holds all the cards with investor backing; if he isn't reinstated, OpenAI risks losing both its compute resources, talent, and customers.

The engagement of non-tech individuals in this Silicon Valley drama has been fun; the real-life writers for this season have truly excelled 🔥! While it's all speculative and merely my perspective, I struggle to envision a scenario in which OpenAI isn't compelled to reinstate Sam Altman as soon as possible. The crux of the matter lies in the fact that Sam is synonymous with the funding. The investors' commitment was to Sam, his vision, and his renowned capacity to push technological boundaries, not to other figures like Adam D’Angelo, Ilya Sutskever, Mira Murati, Helen Toner, and so forth. As far as the investors are concerned most of them can go away.

Sam finds himself in an enviable position, with a couple of paths he could take. Additionally, he boasts one of the most formidable global networks in terms of capital access. Should he decide to seek funding for a new venture, which seems advisable, he is likely to break records for the amount of seed capital he raises.

1. Option one involves starting a new venture. By launching a fresh company with a new structure, Sam would gain more control. This presents a risk for Microsoft, as Sam could explore alternative funding sources. That said I’m sure Sam doesn’t want to piss off Microsoft so he will have some loyalty there. The talent is loyal to Sam, not Microsoft. Furthermore, the announcement of a new venture could spell disaster for OpenAI, potentially triggering a mass exodus of talent eager to join Sam's new initiative. Way more upside in a smaller venture. For Sam, if his ambition ever leaned towards joining the billionaire ranks, this route would be the most promising.

2. Option two is to return to OpenAI, but with a revamped organizational structure. It's conceivable to picture the original OpenAI board members convening with Satya Nadella and Sam Altman, attempting to dissect what went awry and seeking a resolution. However, that scenario seems unlikely. Satya is probably still upset about being left out of the loop, complicating matters for Microsoft. He may view them as contributing no value, leading to the board's eventual dismissal. I think Sam will hold significant equity in this new structure, just my guess, to persuade him from doing #1.

Fantastic, a new board acting as marionettes under Sam's control! Yet, this isn't entirely beneficial either. OpenAI is in need of assistance; they lack the necessary product and enterprise experience to take the company where it should be. Consequently, a robust board would be advantageous to provide guidance and navigate through the company's existing deficiencies. There's been a degree of sloppiness, and it's time for them to adopt the demeanor of a bona fide enterprise. Maintaining their lead depends on it.

The thorniest part of this saga isn't the key players like Sam, Satya, Ilya, or Mira; it's the lawyers. They're a nuisance, comparable to African wild dogs encircling a carcass, eager for a piece of the action. If the OpenAI board decides to make a sacrificial move regarding the company's structure to stand on the 'right side of history,' the only winners will be the lawyers, feasting on what remains of the company's dry powder as its valuation plummets. What was once a skyrocketing enterprise may well become a crater where all the money went. Self-preserving employees, more focused on individual gain than collective success, will likely abandon ship and aim for a position in Sam's new venture—if they manage to get through the door. Anyone reading this might as well aim to join Sam's new venture. Those who were against Sam will find fundraising and talent acquisition far more challenging, having marked themselves as overly cautious, the ones who pushed back. Investors aren't looking for caution; they crave acceleration, or better yet, a nitrous oxide boost.

For Satya, the main concerns are Microsoft's reputation, its customer relationships, and shareholder value. Should Sam initiate a new venture, hostilities may remain subdued until he begins to onboard OpenAI's clients. Satya, wary of any disruption to Microsoft's customer base, I’m sure is working on various strategies to mitigate fallout—including potential legal battles and customer defections. It is no surprised Satya was pissed at the surprised news, this is a huge mess for him.

Sam Altman has just experienced his first taste of freedom in four years. It's the perfect time for him to take a vacation, take a full week off and hide your phone. He's likely riding a rollercoaster of emotions—surprise, sadness, anger, but also a sense of liberation. Sam feeling freedom is bad for the current investors, the freedom is intoxicating and the longer he is free the less likely he will return to OpenAI.
There's something exhilarating about shedding all the nonsense, the bullshit, and realizing the potential to restructure and start anew. To return to the roots of building and innovating I’m sure Sam misses that. He may even blame the reason for not having a GPT5 release on the bullshit that comes from having a larger, later stage company, where customer concerns demand too much of his attention. Yet, it's apparent that Sam maintains a tight bond with Microsoft, and likely feels a strong sense of loyalty to Satya for the early bet he placed on him. Satya is a great CEO and not someone Sam would want to irk or piss off.

The dynamics at play here are fascinating. Who is bending the knee to whom? Is it Sam bending the knee to Satya, or the other way around? The arguments could swing either way. However, one thing seems certain: no one is likely to knee to OpenAI's board. The power play within this narrative continues to unfold in intriguing ways. Curious what other people’s predictions are.