> They lead with the fact that it was shocking and irresponsible.

I can see where the misalignment (ha!) may be: someone deep in the VC world would reflexively think that "value destruction" of any kind is irresponsible. However, a non-profit board has a primary responsibility to its charter and mission - which doesn't compute for those with fiduciary-duty-instincts. Without getting into the specifics of this case: a non-profit's board is expected to make decisions that lose money (or not generate as much of it) if the decisions lead to results more consistent with the mission.

>However, a non-profit board has a primary responsibility to its charter and mission - which doesn't compute for those with fiduciary-duty-instincts

Exactly. The tricky part is that board started a second for profit company with VC investors who are co-owners. This has potential for messy conflicts of interest if there is disagreement about how to run the co-venture, and each party has contractual obligations to each other.

> Exactly. The tricky part is that board started a second for profit company with VC investors who are co-owners. This has potential for messy conflicts of interest if there is disagreement about how to run the co-venture, and each party has contractual obligations to each other.

Anyone investing in or working for the for-profit LLC has to sign an operating agreement that states the LLC is not obligated to make a profit, all investments should be treated as donations, and that the charter and mission of the non-profit is the primary responsibility of the for-profit LLC as well.

See my other response. If you have people sign a contract that says the mission comes first, but also give them profit sharing stocks, and cap those profits at 1.1 Trillion, it is bound to cause some conflicts of interest in reality, even if it is clear who calls the shots when deciding how to balance the mission and profit

There might be some conflict of interest but the resolution to those conflicts is clear: The mission comes first.

OpenAI employees might not like it and it might drive them to leave, but they entered into this agreement with a full understanding that the structure has always been in place to prioritize the non-profit's charter.

> The mission comes first.

Which might only be possible with future funding? From Microsoft in this case. And in any case if they give out any more shares in the wouldn’t they (with MS) be able to just take over the for-profit corp?

The deal with Microsoft was 11 billion for 49% of the venture. First off, if open AI can't get it done with 11 billion plus whatever Revenue, they probably won't. Second, the way the for-profit is set up, it may not matter how much Microsoft owns, because the nonprofit keeps 100% of the control. Seems like that's the deal that Microsoft signed. They bought a share of profits with no control. Third, my understanding is that the 11 billion from Microsoft is based on milestones. If openai doesn't meet them, they don't get all the money

Just a nitpick. "Fiduciary" doesn't mean "money", it means an entity which is legally bound to the best interests of the other party. Non-profit boards and board members have fiduciary duties.

Thanks for that - indeed, I was using "fiduciary duty" in the context it's most frequently used - maximizing value accrued to stakeholders.

However, to nitpick your nitpick: for non-profits there might be no other party - just the mission. Imagine a non-profit whose mission is to preserve the history and practice of making 17th-century ivory cuff links. It's just the organisation and the mission; sometimes the mission is for the benefit of another party (or all of humanity).

The non-profit, in my use, was the party. I guess at some point these organizations may not involve people, in which case "party" would be the wrong term to use.

Of course they can only achieve their mission with funding from for profit corporations and their actions have possibly jeopardized that

Investors are not gonna like when the business guy who was pushing for productizing, profitability and growth get ousted. We don’t know all the details about what exactly caused the board to fire Sam. The part about lying to the board is notable.

It’s possible Sam betrayed their trust and actually committed a fireable offense. But even if the rest of the board was right, the way they’ve handled it so far doesn’t inspire a lot of confidence.

Again, they didn't state that he lied. They stated that he wasn't candid. A lot of people here have been reading specifics into a generalized term.

It is even possible to not be candid without even using lies of omission. For a CEO this could be as simple as just moving fast and not taking the time to report on major initiatives to the board.

> Again, they didn't state that he lied. They stated that he wasn't candid. A lot of people here have been reading specifics into a generalized term.

OED:

candour - the quality of being open and honest in expression.

"They didn't state he lied ... without even using lies of omission ... they said he wasn't [word defined as honest and open]"

Candour encapsulates exactly those things. Being open (i.e. not omitting things and disclosing all you know) and honest (being truthful).

On the contrary, "not consistently candid", while you call it a "generalized term", is actually a quite specific term that was expressly chosen, and says, "we have had multiple instances where he has not been open with us, or not been honest with us, or both".

Yes? I agree, and don't see how what you've written either extends or contradicts what I wrote.

To not be candid means to not be open (i.e. keeping things back, 'omission') or to not be honest (i.e. lie).

If he didn't lie, and didn't lie by omission then he was by definition being candid.

Give us an example then, of how you can be "not candid" while being honest and open.

If "and" operates as logical "and," then being "honest and not open," "not honest and open," and "not honest and not open" would all be possibilities, one of which would still be "honest" but potentially lying through omission.

Its possible not to be candid without even using lies of omission (and be on the losing side of a vicious factional battle) and get a nice note thanking you for all that you've done and allowing you to step down and spend more time with your family at the end of the year too. Or to carry on as before but with onerous reporting requirements. The board dumped him with unusual haste and an almost unprecedented attack on his integrity instead. A lot of people are reading the room rather than hyperliterally focusing on the exact words used.

If I take the time to accuse my boss of failing to be candid instead of thanking him in my resignation letter or exit interview, I'm not saying I think he could have communicated better, I'm saying he's a damned liar, and my letter isn't sent for the public to speculate on.

Whether the board were justified in concluding Sam was untrustworthy is another question, but they've been willing to burn quite a lot of reputation on signalling that.

> hyperliterally focusing on the exact words used.

Business communication is never, ever forthright. These people cannot be blunt to the public even if their life depended on it. Reading between the lines is practically a requirement.

They said he lied without using those exact words. Standard procedure and corp-speak.

How much you wanna bet that the board wasn't told about OpenAI's Dev Days presentation until after it happened?

They may even be making the right move but not in a way that it looks like they made the right move. That's stupid.