(Bloomberg) — OpenAI, the pioneer of widely used tools that generate specialized digital content from simple prompts, ousted its co-founder and Chief Executive Officer Sam Altman and lost another senior executive after a series of escalating disagreements over fundamental questions at the heart of artificial intelligence: How to keep the technology safe while also making money from it.

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Altman clashed with members of his board, especially Ilya Sutskever, an OpenAI co-founder and the company’s chief scientist, over how quickly to develop what’s known as generative AI, how to commercialize products and the steps needed to lessen their potential harms to the public, according to a person with direct knowledge of the matter. This person asked not to be identified discussing private information.

Directors of San Francisco-based OpenAI shocked the AI world Friday with the announcement that they were firing Altman, saying they had lost confidence in his leadership and that “he was not consistently candid in his communications with the board.” Within hours, Greg Brockman, a co-founder of OpenAI who had been chairman of the board, said he too would leave the company. In a post on X, formerly Twitter, Brockman wrote, “based on today’s news, I quit.”

The AI community has long disagreed over how swiftly to develop tools capable of generating a broad range of images, software code and blocks of text quickly, with minimal prompting. Some have argued that, left unchecked, the technology poses threats to users, while others say that a slowdown would be irresponsible and could put people at risk — say, by depriving the sick of remedies more quickly discovered by AI. Such disputes have plagued OpenAI since its inception, and disagreements over safety and commercialization are why Elon Musk broke ties with OpenAI in 2018. They also explain why a group of employees departed in 2020 and started rival Anthropic.

While announcing Altman’s exit, OpenAI’s board also said Mira Murati, an Albanian-born Dartmouth-educated engineer who helped develop some of the company’s best-known products as its chief technology officer, will serve as OpenAI’s interim chief executive officer.

Alongside rifts over strategy, board members also contended with Altman’s entrepreneurial ambitions. Altman has been looking to raise tens of billions of dollars from Middle Eastern sovereign wealth funds to create an AI chip startup to compete with processors made by Nvidia Corp., according to a person with knowledge of the investment proposal. Altman was courting SoftBank Group Corp. chairman Masayoshi Son for a multibillion-dollar investment in a new company to make AI-oriented hardware in partnership with former Apple designer Jony Ive.

Sutskever and his allies on the OpenAI board chafed at Altman’s efforts to raised funds off of OpenAI’s name, and they harbored concerns that the new businesses might not share the same governance model as OpenAI, the person said.

‘Blindsided’

Shockwaves over the moves were felt widely within OpenAI and across the tech landscape. “Sam and I are shocked and saddened by what the board did today,” Brockman wrote in a post on X, formerly Twitter. “We too are still trying to figure out exactly what happened.”

Brockman said that the board spoke to Altman on a Google Meet, where Sutskever delivered the news: “Ilya told Sam he was being fired and that the news was going out very soon.” The move was sudden, surprising most people close to the company, including Altman—who quickly had all of his access to email and company devices cut off.

Executives at Microsoft Corp., the largest investor in OpenAI, were also taken by surprise. Microsoft CEO Satya Nadella was “blindsided” by the news and was furious, according to someone with direct knowledge of his thinking.

Sutskever’s concerns have been building in recent months. In July, he formed a new team at the company to bring “super intelligent” future AI systems under control. Before joining OpenAI, the Israeli-Canadian computer scientist worked at Google Brain and was a researcher at Stanford University.

A month ago, Sutskever’s responsibilities at the company were reduced, reflecting friction between him and Altman and Brockman. Sutskever later appealed to the board, winning over some members, including Helen Toner, the director of strategy at Georgetown’s Center for Security and Emerging Technology.

Altman’s firing also stunned leading investors and startups throughout Silicon Valley, and it threw tech’s most promising industry into a state of uncertainty.

Companies ditching their founders is part of the recurring foundational lore of Silicon Valley. Apple fired Steve Jobs in 1985; Twitter dismissed co-founder Jack Dorsey in 2008. Both executives famously returned to their companies years later. But Altman’s exit could have a larger impact on the industry he came to represent.

The tech world’s immediate reaction was a mix of surprise, dismay and wild speculation. Industry group chats lit up, and investors and tech leaders traded theories on social media about what caused the OpenAI board to fire its famous CEO. With a dearth of information from the company, prediction wager platform Manifold Markets started taking bets about the cause.

As of late morning on Friday, Altman had still been sending regular emails to employees as CEO. He even appeared at multiple events Thursday, representing OpenAI in a talk at the Asia-Pacific Economic Cooperation summit in San Francisco and attending an evening event related to the Burning Man festival, where he spoke on the future of AI art.

Earlier this month, the company had its first developer conference, known as DevDay, stoking excitement about its products. “I think the developer community really loves to follow audacious visionaries and DevDay happened, I was there, and the excitement was just off the charts,” said Matt Schlicht, CEO of Octane AI. “And that was like a week ago.”

OpenAI got its start in 2015 as a non-profit, but its business model has evolved. The company’s prominence skyrocketed last year after it introduced its chatbot ChatGPT to the public, awing users with creative, elegant prose and spurring consumers, organizations and businesses to re-imagine how they work. Earlier this year, the company was in talks to sell existing employee shares at a valuation of $86 billion, vaulting it to the ranks of the world’s most valuable startups.

Altman too had an outsize presence in the tech world, backing and participating in a range of startups. He was also a leading ambassador for AI, and his departure could undercut broader faith in the technology. But as with past scandals, some predict the industry will take the news in stride.

“I don’t think it will shake anyone’s confidence in tech,” said Cory Klippsten, CEO of Swan, a bitcoin financial services firm. “I think it’ll make people take a really close look at what are the biases and rules or protocols that exist in the structure of OpenAI.”

Though shocked and saddened, Altman was upbeat late Friday evening, according to a person close to him. In another post on X, Altman said, “I love you all.” He added, “Today was a weird experience in many ways. But one unexpected one is that it has been sorta like reading your own eulogy while you’re still alive. The outpouring of love is awesome.”

Altman is likely to start another company, one person said, and will work with former employees of OpenAI. There has been a wave of departures following Altman’s firing, and there are likely to be more in the coming days, this person said.

In another post, Altman suggested he would have more to say about the company in the future: “If I start going off, the OpenAI board should go after me for the full value of my shares.” Altman famously has said he has zero equity in the startup.

–With assistance from Emily Chang, Rachel Metz, Priya Anand, Jackie Davalos and Sarah McBride.

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