Altman had developed a reputation for favoring personal priorities over official duties. Image Credit: AFP

Friday's shocking ouster of Sam Altman, who negotiated his return as CEO of OpenAI late Tuesday night, was not the first time the shrewd Silicon Valley operator has found himself on the outs.

Four years ago, Altman's mentor, Y Combinator founder Paul Graham, flew from the United Kingdom to San Francisco to give his protg the boot, according to three people familiar with the incident, which has not been previously reported.

Graham had surprised the tech world in 2014 by tapping Altman, then in his 20s, to lead the vaunted Silicon Valley incubator. Five years later, he flew across the Atlantic with concerns that the company's president put his own interests ahead of the organization - worries that would be echoed by OpenAI's board.

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Though a revered tactician and chooser of promising start-ups, Altman had developed a reputation for favoring personal priorities over official duties and for an absenteeism that rankled his peers and some of the start-ups he was supposed to nurture, said two of the people, as well as an additional person, all of whom spoke on the condition of anonymity to candidly describe private deliberations. The largest of those priorities was his intense focus on growing OpenAI, which he saw as his life's mission, one person said.

A separate concern, unrelated to his initial firing, was that Altman personally invested in start-ups he discovered through the incubator using a fund he created with his brother Jack - a kind of double-dipping for personal enrichment that was practiced by other founders and later limited by the organization.

"It was the school of loose management that is all about prioritizing what's in it for me," said one of the people.

Graham did not respond to a request for comment.

Battle of ideologies

Though Altman's OpenAI ouster has been attributed in numerous news media reports to an ideological battle between safety concerns versus commercial interests, a person familiar with the board's proceedings said the group's vote was rooted in concerns that he was trying to avoid any checks on his power at the company - a trait evidenced by his unwillingness to entertain any board makeup that wasn't heavily skewed in his favor.

Allegations of self-interest prompted Altman's firing on Friday and jeopardized the first days of negotiations to broker his return to OpenAI, the leading artificial intelligence company responsible for ChatGPT. He announced in the wee hours of the morning on Wednesday that he was returning as CEO, along with a new board composed of allies.

Over the weekend, the four members of the original board, including three independent directors, had been willing to bring Altman back as CEO and replace themselves as long as Altman agreed to a group that promised meaningful oversight of his activities, according to the person familiar with the board, who spoke on the condition of anonymity to discuss sensitive matters.

Though the board met with and approved of one of Altman's recommended candidates, Altman was unwilling to talk to anyone he didn't already know, said the person. By Sunday, it became clear that Altman wanted a board composed of a majority of people who would let him get his way. Another person familiar with Altman's thinking said he was willing to meet with the board's shortlist of proposed candidates, except for one person whom he declined on ethical grounds.

But by Wednesday Altman agreed to certain demands, including not being on the board and retaining Quora CEO and current director Adam D'Angelo, announcing a return as CEO in the wee hours of the morning. He agreed to name two new board members - Bret Taylor, formerly co-CEO of Salesforce and a Twitter board member, Larry Summers, former U.S. treasury secretary - names the old board were optimistic about.

Board members replaced

"And now, we all get some sleep," Helen Toner, one of the board members involved in negotiations, wrote on X.

The new board members announced as part of Altman's reinstatement include Bret Taylor, formerly co-CEO of Salesforce and a Twitter board member, Larry Summers, former U.S. treasury secretary, along with Quora CEO and director Adam D'Angelo.

It was unclear Wednesday whether the group would be able to effectively steer the reinstated CEO's ambitions. The board pushed back on Altman's demands and ultimately settled on a few priorities: blocking Altman from a board seat, organizing a full and independent investigation of the company and ensuring that not all members of the current board resign, the person said.

OpenAI's rapidly shifting and drama-filled boardroom saga, which has played out on social media, is a first for the fast-moving tech sector. But Altman's clashes, over the course of his career, with allies, mentors and even members of a corporate structure he endorsed, are not uncommon in Silicon Valley, amid a culture that anoints wunderkinds, preaches loyalty and scorns outside oversight.

Polarizing personality

The same qualities have made Altman an unparalleled fundraiser, a consummate negotiator, a powerful leader and an unwanted enemy, winning him champions in former Google Chairman Eric Schmidt and Airbnb CEO Brian Chesky. Altman's ability to inspire fealty from employees and faith in his mission was broadcast across X this weekend in a flood of heart emojis from OpenAI staffers and in threats from nearly all of the company's 770-person workforce to quit unless he was reinstated.

"Ninety plus percent of the employees of OpenAI are saying they would be willing to move to Microsoft because they feel Sam's been mistreated by a rogue board of directors," said Ron Conway, a prominent venture capitalist who became friendly with Altman shortly after he founded Loopt, a location-based social networking start-up, in 2005. "I've never seen this kind of loyalty anywhere."

But Altman's personal traits - in particular, the perception that he was too opportunistic even for the go-getter culture of Silicon Valley - has at times led him to alienate even some of his closest allies, say six people familiar with his time in the tech world.

Many in Silicon Valley laud Altman's strategic skill sets, including his ability to be a matchmaker among powerful people. People who know him say they have witnessed him pluck fledgling start-up founders, mentor them and make introductions for them that altered their careers. One of those people whose career Altman helped propel was Ilya Sutskever, chief scientist and board member at OpenAI - the person who ultimately fired him.

Keith Rabois, a general partner at the venture firm Founders Fund, said that Altman was one of only three people he consulted when he decided to leave his previous job to join his current firm. He said Altman, who officiated his wedding, had an uncanny knack for giving strategic advice, for negotiating business deals, and for spotting undiscovered talent. "He could tell right away who was destined for greatness - probably one of the five best people in all of Silicon Valley at doing that," he said.

Rabois noted that Altman, as a Stanford dropout, persuaded a major telecommunications company to do business with his start-up Loopt - the same quality, he said, that enabled Altman to persuade Microsoft to invest in OpenAI.

"Insofar as he is polarizing, it's because he is young, successful and ambitious, and people are envious," he added.

Altman's career arc speaks to the culture of Silicon Valley, where cults of personality and personal networks often take the place of stronger management guardrails - from Sam Bankman-Fried's FTX to Elon Musk's Twitter. Altman's practice of filling the board with allies to gain control is not just common, it's start-up gospel from Altman's longtime mentor, venture capitalist Peter Thiel.

Shrewd maneuvering

But some of Altman's former colleagues recount issues that go beyond a founder angling for power. One person who has worked closely with Altman described a pattern of consistent and subtle manipulation that sows division between individuals.

A former OpenAI employee, machine learning researcher Geoffrey Irving, who now works at competitor Google DeepMind, wrote that he was disinclined to support Altman after working for him for two years. "1. He was always nice to me. 2. He lied to me on various occasions 3. He was deceptive, manipulative, and worse to others, including my close friends (again, only nice to me, for reasons)," Irving posted Monday on X.

Irving did not respond to The Post for a request for comment.

The board's startling, though short-lived, decision to fire Altman came as he appeared to be on an upswing. Only a year after launching ChatGPT, OpenAI was by far the hottest consumer company in Silicon Valley. At the company's recent Dev Day, Altman presented as a millennial Steve Jobs - and announced plans for the company to become the dominant platform in generative AI. As the face of the company, and the AI boom, he was on the precipice of transitioning to a new entrant in the Big Tech pantheon.

Within some tech and AI circles, however, the knives were out for Altman. A growing group alleges that Altman has used his shrewd maneuvering to stifle smaller open-source competitors, in this case to secure the future for his company and employees.

AI executives, start-up founders and powerful venture capitalists had become aligned in recent months, concerned that Altman's negotiations with regulators were dangerous to the advancement of the field. Although Microsoft, which owns a 49 percent stake in OpenAI, has long urged caution to regulators, investors have fixated on Altman, who has captivated legislators, and embraced his summons to Capitol Hill.

Though full reasoning for Altman's initial firing is still unclear, the person familiar with the proceedings said there was no single catalyst. The board's independent directors remained united during negotiations and stood by their decision. It was hard work to find new board members they believed would be able to stand up to Altman, the person said.

"Sam lives on the edge of what other people will accept," said one of the people who had worked with him closely. "Sometimes he goes too far."

In a post on X announcing his return, Altman wrote, "i love openai, and everything i've done over the past few days has been in service of keeping this team and its mission together."