WASHINGTON – The board of the company behind ChatGPT on Nov 17 fired its chief executive Sam Altman – to many, the human face of generative artificial intelligence (AI) – sending shock waves across the tech industry.

OpenAI’s chief technology officer Mira Murati will serve as interim CEO, the company said, adding that it will conduct a formal search for a permanent chief executive.

The announcement blindsided many employees, who discovered the abrupt management shuffle from an internal announcement and the company’s public-facing blog.

OpenAI scheduled an emergency all-hands meeting to discuss the news with employees on the afternoon of Nov 17, a source familiar with the matter said.

“Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities,” OpenAI said in the blog without elaborating.

OpenAI president and co-founder Greg Brockman, who stepped down from the board as chairman as part of the management shuffle, resigned from the company.

He announced this on messaging platform X late on Nov 17, writing: “Based on today’s news, I quit.”

Backed by billions of dollars from Microsoft, OpenAI kicked off the generative AI craze in November 2022 by releasing its ChatGPT chatbot, which became one of the world’s fastest-growing software applications.

Trained on reams of data, generative AI can create brand-new human-like content, helping users spin up term papers, complete science homework and even write entire novels.

After ChatGPT’s launch, regulators scrambled to catch up: the European Union revised its AI Act and the United States kicked off AI regulation efforts.

Mr Altman, who ran the start-up accelerator Y Combinator, is a serial entrepreneur and investor. He was the face of OpenAI and the wildly popular generative AI technology as he toured the world in 2023.

He said in a post on X shortly after OpenAI published its blog: “i loved my time at openai. it was transformative for me personally, and hopefully the world a little bit. most of all i loved working with such talented people. will have more to say about what’s next later.”

He did not respond to requests for comment. OpenAI was not reachable for further comment.

Ms Murati, who has worked for Tesla, joined OpenAI in 2018 and later became the company’s chief technology officer. She oversaw launches of products, including ChatGPT.

At the emergency all-hands meeting on Nov 17 after the shock announcement, Ms Murati sought to calm employees.

She said OpenAI’s partnership with Microsoft is stable and its backer’s executives, including chief executive Satya Nadella, continue to express confidence in the start-up, a source familiar with the matter told Reuters.

Tech news company The Information previously reported details of the meeting.

“Microsoft remains committed to Mira and their team as we bring this next era of AI to our customers,” a spokesperson for the software maker told Reuters on Nov 17.

In a statement published on Microsoft’s website, Mr Nadella added: “We have a long-term agreement with OpenAI... Together, we will continue to deliver the meaningful benefits of this technology to the world.”

Mr Altman’s well-wishers and critics piled onto digital forums as the news spread.

On X, former Google chief executive Eric Schmidt called Mr Altman “a hero of mine”.

Mr Schmidt added: “He built a company from nothing to US$90 billion (S$120.9 billion) in value, and changed our collective world forever. I can’t wait to see what he does next. I, and billions of people, will benefit from his future work – it’s going to be simply incredible.”

Mr Daniel Ives, an analyst at Wedbush Securities, said: “This is a shocker and Altman was a key ingredient in the recipe for success of OpenAI.”

He added: “That said, we believe Microsoft and Nadella will exert more control at OpenAI going forward with Altman gone.”

The full impact of the OpenAI surprise will unfold over time, but its fund-raising prospects are an immediate concern.

Mr Altman was considered a master fund-raiser who managed to negotiate billions of dollars in investment from Microsoft as well as having led the company’s tender offer transactions in 2023 that fuelled OpenAI’s valuation from US$29 billion to more than US$80 billion.

“In the short term, it will impair OpenAI’s ability to raise more capital. In the intermediate term, it will be a non-issue,” said Mr Thomas Hayes, chairman of hedge fund Great Hill Capital.

Other analysts said Mr Altman’s departure, while disruptive, would not derail generative AI’s popularity or OpenAI or Microsoft’s competitive advantage.

“The innovation created by OpenAI is bigger than any one or two people, and there is no reason to think this would cause OpenAI to cede its leadership position,” said D.A. Davidson analyst Gil Luria.

“If nothing else, Microsoft’s stake and significant interest in OpenAI’s progress ensure the appropriate leadership changes are being implemented.”

As late as the evening of Nov 16, Mr Altman showed no signs of concern at two public events.

He joined colleagues in a panel on the sidelines of the Asia-Pacific Economic Cooperation conference in San Francisco, describing his commitment and vision for AI.

Later he spoke at a Burning Man-related event in Oakland, California, engaging in an hour-long conversation on the topic of art and AI. He seemed relaxed and gave no indication that anything was wrong, but left right after his talk was over at 7.30pm.

The event organiser said at the event that Mr Altman had another meeting to attend. REUTERS