OpenAI Board Has Discussed Seats With Scale AI’s Wang, Investor Friedman
THE TAKEAWAY
• OpenAI’s new board is looking to fill seats after November shake-up
• Early outreach has included Scale AI CEO, ex-GitHub CEO
• Ex-GitHub CEO Friedman is unlikely to accept; talks are in early stages
OpenAI’s board and its representatives have started talking to candidates to fill its board of directors in the wake of CEO Sam Altman’s ouster and subsequent return. The candidates include two familiar names: Scale AI CEO and co-founder Alexandr Wang, and former GitHub CEO and startup investor Nat Friedman, according to two people familiar with the discussions.
It’s not clear who else the board has approached about joining its ranks. But the talks, which are still in the early stages, indicate that the board is seeking to add representatives from companies that partner with the ChatGPT maker, such as Scale, or that work with other AI startups.
When OpenAI’s previous board in November abruptly fired Altman, triggering an employee revolt, some customers complained that the board’s directors were too disconnected from their needs. After firing Altman, OpenAI’s then-board approached both Wang and Friedman to be an interim CEO, The Information reported. The two entrepreneurs rejected the offers.
Friedman is unlikely to accept a board seat, according to a person familiar with the talks. It’s unclear if conversations with Wang, which took place over the past few weeks, will lead to his appointment, according to another person.
OpenAI’s board now consists of former Salesforce CEO Bret Taylor, former U.S. Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo, the only member remaining from the board that fired Altman. The trio is also overseeing an independent review of the events leading to Altman’s ouster.
The board had nine seats as of last March, and it’s not clear how many new seats it will seek to fill.
Muddying the search process, OpenAI’s structure limits the type of candidates the board may consider. Altman and others set up OpenAI in 2015 as a research nonprofit with a mission to develop artificial general intelligence—AI that learns and thinks like humans—for the benefit of all humanity. A majority of its board members need to be independent and must not have equity in the business, OpenAI says. Plus, California law requires board members at nonprofits to recuse themselves from votes on any issue in which they have a business interest.
Last year, early OpenAI investor Reid Hoffman left the board, citing a potential conflict of interest between his duties to the nonprofit and his investments in AI startups, including OpenAI rival Inflection, as well as in companies that could financially benefit from OpenAI. Neuralink executive Shivon Zilis also stepped down last year due to conflicts of interest with AI efforts at her own company, The Information reported.
For similar reasons, the candidates may not include representatives from any of the major investors in OpenAI, such as Khosla Ventures, Thrive Capital or Sequoia Capital. It’s not clear if Wang or similar candidates could avoid such conflicts, but the inclusion of tech executives could help Taylor create what he said should be a “qualified, diverse board,” with individuals experienced in technology, safety and policy.
Such additions could resolve the concerns of customers and investors, including Microsoft—OpenAI’s largest financial stakeholder—that the nonprofit’s mandate could again interfere with the business. After Altman’s ouster, early OpenAI investor Vinod Khosla blamed the makeup of the prior board, composed of D’Angelo, then–Chief Scientist Ilya Sutskever, AI researcher Helen Toner and entrepreneur Tasha McCauley, for what he considered misplaced concern about existential risk from AI advances.
The departures of Toner and McCauley mean there are no women on OpenAI’s board, and people close to OpenAI leadership believe the board should include at least one woman.
Microsoft has the right to appoint a nonvoting board seat. The software giant is likely to appoint someone close to Chief Technology Officer Kevin Scott. He has largely led the company’s partnership with OpenAI, beginning with Microsoft’s first investment in the startup in 2019.
Two possible candidates for the Microsoft board observer role are deputy Chief Technology Officer Lila Tretikov and Vice President of Partnerships Deannah Templeton. Both report directly to Scott and have also worked closely with OpenAI in recent months, according to two Microsoft employees. A Microsoft spokesperson declined to comment.
Wang and OpenAI have a long and multifaceted relationship that dates back to 2016, when Wang participated in the Y Combinator startup accelerator, then led by Altman. OpenAI has also been a customer of Scale, which helps businesses fine-tune AI models. More recently, Scale has helped other companies customize how they use OpenAI’s GPT 3.5 model. D’Angelo, OpenAI President Greg Brockman and Friedman have all invested in Scale.
Friedman’s involvement with OpenAI stretches at least back to his time at Microsoft. Friedman served as CEO of GitHub after Microsoft acquired the code repository firm in 2018, and in 2021 he oversaw the launch of GitHub Copilot, which uses OpenAI’s models to automatically generate code based on customers’ written prompts. The tool predates OpenAI’s ChatGPT and was the first large-scale product deployed by Microsoft that relied on OpenAI’s technology.
Since leaving Microsoft in 2022, Friedman has become an active investor in AI startups, including consumer chatbot maker Character.AI, web search chatbot startup Perplexity and Scale, sometimes through his fund established with investor Daniel Gross.