During November 1444 letter from Kevin Scott to S. Nadella, Brad Smith, and other top executives at Microsoft has thrown light on some of the details which let to the sudden Jeffing away of the Chief Executive Officer of OpenAI, Sam Altman, last November. The letter makes it clear that a complex interplay of factors was involved in an ideological disagreement.

The relationship souring between the OpenAI co-founder and board member Ilya Sutskever and Altman was a pressure cooker of the sea, including conflicts relating to resource allocation and decision-making leadership of OpenAI.

Policy: Resources

Scott further stated that the major point of conflict began and built up mainly, stemming from the rapidly escalating tussle over access to computing resources, particularly GPUs. Because of the overwhelming growth of consumer and commercial scenarios due to the extreme popularity of projects like ChatGPT and OpenAI’s API, resources continued to be drained from fundamental research and development efforts.

Some researchers saw this shift as depriving their next-generation-model-inspiration work of the computing capacity it required to move forward. Scott referred to it as a clash we’re all familiar with Applied vs. Research divisions, where, he said, Altman is attempting to solve the problem by pushing for general capacity growth as opposed to reallocating scarce resources.

He also said that, minus the “applied” win that distills down the nonspeak of research achievement into near-resources of one’s own, this much would have never seen the light of the day.

Conflict Escalates with Promotion

Another, more personal issue among the team members was related to the promotion of Jakub Pachocki, a researcher. Scott explained that Pachocki, who previously worked under Sutskever, was singled out by Altman for leadership in core model development of OpenAI. He was given the ultimate promotion after contributing significantly to the company’s research organization by helping them achieve some significant breakthroughs.

The promotion itself seemed valid from the CEO’s perspective while causing strained relationships for Sutskever. The email reveals the internal conflicts that rise where a position left vacant by his department is placed under the leadership of a former subordinate. The real conflict arose as the employee lacked the requisite experience for research directions and went on to make faster short-term success with some problems which Sutskever has been working on for a long.

Board dynamics and vulnerability

Moreover, Scott also highlighted weaknesses in the board structure at OpenAI. In most corporations, disagreements of this nature would be resolved behind closed doors and then leave the board by voluntary resignation. However, Sutskever was not in one role, as he was acting under two competencies of both employee and board member to exercise his influence on every board decision.

Scott argued that the board was particularly susceptible to Sutskever’s perspective because many of the members lacked the necessary operational experience, and some were also skeptical of Altman’s vision, according to the e-mail. The board therefore underestimated the risks of removing Altman and didn’t have the expertise to manage a leadership transition in a company of the size and dollar value of OpenAI.

The events around the firing

A timeline for the firing is described in the e-mail. Here Scott wrote the board let the rest of the OpenAI organization know that they were firing Sam and did so in a speed that might be classified as “utmost chaos and haste and they had B1 call about that by Friday.” Scott said that the board told the CTO (Murati) of the firing decision late Thursday night, just before the news of it went out to Sam on Friday. It was then when Murati’s message to Nadella and Scott went barely minutes before the board informed Altman.

By Friday night, Pachocki and a few other main team members quit. The e-mail, included in court documents as part of the Musk strategy against the hedge fund, reads like a page out of a satirical comic written by the most comedy writers in history. It seems to be filled with witticisms at the expense of its inhabitants, the people living in the frame.

By Friday night, Pachocki and others had stood down. But the email has an archive in court documents as part of Musk’s fight against Altman. It is fair one of the most precise accounts of events in the ongoing tug-of-war that finally resulted in Silicon Valley’s biggest leadership crisis.