[Tuna-Fish]

The reason the CEO could oust the board like that was that after the board fired the CEO, 720 of the 770 employees of the company got together and signed a pledge that they will all leave unless the CEO is reinstated and the board fired. This was the purest example of labor democracy and self-organization in action in the United States I have ever seen, my takeaway is rather the opposite of "they are all expendable". They showed very clearly that what decides the future direction of the company is the combined will of the employees.

[hurtuvac78]

Then you should be interested in the story of MarketBasket, a major supermarket chain in New England.

Their CEO was fired, but came back because of employees. Similar, in a very different industry.

https://en.m.wikipedia.org/wiki/Market_Basket_protests

[moritz]

Yeah, unionizing so your boss doesn’t get fired really is the most SF/US “labor democracy” thing ever

[ilikehurdles]

I agree.

1. A group of highly skilled people voluntarily associating with each other

2. in an organization working on potentially world-changing moonshot technology,

3. born of and accelerated by the liquidity of the free market

4. with said workers having stake in the success of that organization

is very American. We should ponder the reasons why, time and time again, it has been the US "system" that has produced the overwhelming number of successes in such ventures across all industries, despite the attempts of many other nations to replicate these results in their own borders.

[Fluorescence]

> This was the purest example of labor democracy and self-organization in action in the United States I have ever seen

This was not an anonymised vote giving the chance to safely support what you believe free from interference... this was to declare for the King or the Revolution knowing that if don't choose who prevails, you will be executed. It becomes a measure of which direction the people believe the wind is blowing rather than a moral judgement. Power becomes about how a minority can coerce/cajole the impression of inevitability not the merit of their arguments.

I will be curious to hear the inside story once the window of retribution has passed. Unions hold proper private ballots not this type of suss politicking.

[moralestapia]

Yeah, and that just means that the board is useless de facto.

Nice story on a company, maybe, but really bad thing on a "non-profit".

[intended]

It means the board was out of alignment with their employees and their decision was unusually unpopular.

If the board had communicated better (no 2 or different reasons) or had hard evidence (the claim was deceptive behavior) - it would have been different.

I expect everyone who reads HN accepts that execution is 70% of the battle.

It’s very unsurprising for employees to have made the choices they did, given the handling of the situation.

[powersnail]

I don't think it means that the board is useless, but rather that their power has a limit, as all leadership positions do, and the way the fired the CEO has crossed the line too far.

[aardvarkr]

Useless in the sense that they showed themselves to be incompetent with their failed coup and had to pay the price. As the saying goes, “if you take a shot at the king you had better not miss”.

[cedilla]

"Being useless" and "wielding absolute, unilateral, unquestionable authority like Sun King Louis XIV" are not the only two options here.

[Waterluvian]

Because Microsoft offered them all jobs.

[LMYahooTFY]

As if they couldn't easily get a job almost anywhere?

Also don't they all have equity in OpenAI?

Seems like a pretty shallow take.

[Xenoamorphous]

> Also don't they all have equity in OpenAI?

Call me a cynic but this must be the reason behind those 700 employees threatening to walk away, especially if as it seems the board wanted to “slow down”.

I don’t think it’s so much of a “we love Altman” as “we love any CEO that will increase the value of our equity”.

[devoutsalsa]

People go to work to make money. If they’re lucky, they also like they’re work. It’s ok to want more out of work. Work certainly wants more out of you.

[maayank]

> People go to work to make money

If that’s the overriding drive then perhaps they should not got to a non-profit and expect it to optimize for profit

[bad_user]

Non-profit just means there are no stakeholders, meaning that revenue must be used for the organization's expenses, which includes the compensation of employees and growth. Many non-profits also benefit from tax-exemptions.

Assuming anything more than that about the nature of non-profits is just romantic BS that has nothing to do with reality.

Also, there's nothing wrong with wanting to make a profit.

[TeMPOraL]

That non-profit did give out ridiculously high salaries tho.

[fatbird]

The combined will of the employees is much less meaningful when they're saying "DO IT OR WE'LL TAKE AN ATTRACTIVE OFFER THAT'S ON THE TABLE."

I'd have been more impressed by their unity if it would have meant actually losing their jobs.

[bdd8f1df777b]

Why are you only impressed if the power of employees comes with high cost to their career? When employers exercise their power capriciously, they often do so without any material consequences. I'm more impressed with employees doing the same, i.e., exercising power with impunity.

[fatbird]

A decision with a cost is always more meaningful than one without.

[bdd8f1df777b]

Power without cost is true power. I don't care if their decision is meaningful or not. I'm happy when labor can hold true power, even just for once.

[TeMPOraL]

That's only a measure of the strength of one's conviction, and is unrelated to whether they chose the right thing, or for the right reasons.

[vasco]

I'm pretty sure they weren't thinking of how to impress fatbird on HN when they were deciding which boss they like best, the old one or an unknown new one.

[Beldin]

They were about to quit... how much more should they lose their jobs to impress you?

[IshKebab]

He meant if they were to lose their jobs and then have to put actual effort in to get a new one, like most people.

[hackideiomat]

I do not think it is hard for any of them to get a new job and they would be flooooooded with offers if the opened their linkedin

[IshKebab]

Exactly. Most people are not in that situation and therefore cannot threaten to leave so easily.

[fatbird]

They were about to laterally transfer to a new organization headed by the CEO they revered, with promises of no lost compensation. The only change would be the work address. Hardly a sacrifice sanctifying a principled position.

[mock-possum]

They were about to quit *to work for Microsoft.

[bmitc]

The board should have called their bluff and let them walk.

[jgtrosh]

And then we'd witness the market decide whether the company value was provided by its board or its employees

[bmitc]

It's a non-profit. It should have no value aside from the mission. The only reason the employees mobilized in their whining and support of a person, whose only skills seems to be raising money and cult of personality, seems to be so that Altman can complete the Trojan horse of the non-profit by getting rid of it now that it has completed the side quest of attracting investors and customers.

[blackoil]

Which owns a for profit. They would have been left with no employees, no money, no credits, and crown-jewels already licensed to another company. On top of that spending life in minority shareholders lawsuits.

[IgorPartola]

Does the Red Cross have value? Does Wikipedia? Does the Linux Foundation?

I think you are confusing profits, valuations, market cap, and value.

[ffgjgf1]

> value aside from the mission.

And you believe they could’ve achieved their mission with almost zero employees and presumably the board (well… who else?) having to do all the work themselves?

> non-profit by getting rid of it

So the solution of the board was to get rid of both the non-profit and for profit parts of the company?

[justinclift]

> And you believe they could’ve achieved their mission with almost zero employees ...

It's not like they wouldn't be able to hire new employees. ;)

[ffgjgf1]

And do what with them exactly? ; )

[yreg]

How would giving everything to Microsoft help the mission?

It would have been even worse mission-wise.

[itchyouch]

There was nothing to bluff. The employees would've been hired by Microsoft and OpenAI the company would've had nothing but sourcecode and some infrastructure. They would've gone down quickly.

[willis936]

What would that have accomplished? The old board members would still be in charge of the same thing they are today: absolutely nothing. They overplayed their position. That's all there is to it.

[enraged_camel]

>> They overplayed their position. That's all there is to it.

They tried to enforce the non-profit's charter, as is their duty. I would hardly frame that as overplaying their hand.

[willis936]

That's one interpretation, and I'm sure it is the one they had. In my opinion they failed to enforce the charter. Had they been effective at enforcing the charter they would have not folded all of their power to someone they view does not enforce the charter. There is nothing they could have done to fail more.

[0xDEAFBEAD]

>Had they been effective at enforcing the charter they would have not folded all of their power to someone they view does not enforce the charter. There is nothing they could have done to fail more.

How specifically do you suggest they should have "not folded all of their power"? Are you saying they should have stuck to their guns when it came to firing Sam?

In any case, it's not obvious to me that the board actually lost the showdown. Remember, they ignored multiple "deadlines" from OpenAI employees threatening to quit, and the new board doesn't have Sam or Greg on it -- it seems to be genuinely independent. Lots of people were speculating that Sam would gain complete control of the board as an outcome of this. I don't think that happened.

Some are saying that the new board has zero leverage to fire the CEO at this point, since Sam showed us what he can do. However, the new board says they are doing an independent investigation into this incident. So they have the power to issue a press release, at least. And that press release could make a big difference -- to the SEC and other federal regulators, for example.

[upwardbound]

> that press release could make a big difference -- to the SEC and other federal regulators, for example.

They might even have already done this confidentially via the SEC Whistleblower Protection route. We don't yet know who filed this:

https://news.ycombinator.com/item?id=38469149

I guess this might have seemed like their best option if a public statement would be a breach of NDA's. That said, I still wish they'd just have some backbone and issue a public statement, NDA's be damned, because the question of upholding a fiduciary duty to be beneficial to all of humanity is super important, and the penalties for a violation of an NDA would be a slap on the wrist compared to the boost in reputation they would have gotten for being seen to publicly stick to their principles.

[ffgjgf1]

Well they might have as well announced that they are dissolving the company and the outcome would’ve been similar. If that’s not “overplaying your hand” I don’t know what is

[YetAnotherNick]

> They tried to enforce the non-profit's charter

There is literally no evidence to it. If it is about the charter they could directly say it was about the charter rather than using strong language when firing and going silent.

So no one, not even their new CEO they picked knows the reason of firing and this reason has been cited as truth by HN multiple times.

[slewis]

Overplay one’s hand: spoil one's chance of success through excessive confidence in one's position

[Leo_Germond]

I wouldn't say overplayed as much as badly played because they underestimated how much their CEO's had fortified his position. I find the situation pretty dire: we need more checks and watchmen on billionaire tech entrepreneurs, not less.

[nateburke]

I wonder if they ACTUALLY would have landed at Microsoft. And then, would they actually have their TC post tender met there? And would they continue working on AI for some time, independent of reorgs, etc? All of them? A place like MSFT has a TON of process and red tape, the board could have called their bluff and kept at least 40%.

[behringer]

And they would have given MS the 60 percent of their employees more interested in politics than anything else.

[monkeywork]

Please explain why you think they should have let them walk and what benefit to either OpenAI or any of it's partners / customers there would have been in doing so?

It feels like you are saying this out of spite rather than with a good reason - but I'm open to listen if you have one.

[627467]

They could, or could they? Formally boards don't run companies. Would this scenario - besides ridiculous - be legal? Say they let 99% of the company walk. Who is qualified and responsible to do whatever needs to happened after that happens?

[anticensor]

Some companies are chartered such that even the smallest outside spending requires a board vote.

[627467]

Some are. The question is: is openAI? And even if they are, the outcome of this novela indicates it don't matter: the board folded.