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Former Yahoo CEO Marissa Mayer delivers sharp-elbowed rebuke of OpenAI's 'broken' board

Nov 21, 2023, 01:59 IST
Business Insider
Marissa Mayer critiqued OpenAI's board structure.Kimberly White
  • Marissa Mayer slammed OpenAI's 'broken and underadvised' board on social media.
  • The former Yahoo CEO's comments come after OpenAI fired cofounder Sam Altman.
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Marissa Mayer has some harsh words for OpenAI's board.

The former Yahoo CEO took to social media to condemn the company's governance structure after a chaotic weekend that saw OpenAI go through three different CEOs and face threats of resignation from the majority of its staff after the board abruptly ousted Sam Altman. Altman had helped found OpenAI and led the venture for four years.

"OpenAI investors (like @Microsoft) need to step up and demand that the governance weaknesses at @OpenAI be fixed," Mayer wrote Sunday on X, formerly known as Twitter.

On Monday, the former Google and Yahoo executive said she was "sad" that OpenAI's "crazy governance model" allowed its CEO to be abruptly pushed out.

Altman learned he was being terminated on Friday after board member and OpenAI chief scientist Ilya Sutskever reportedly staged a coup. Employee and investors, including key backer Microsoft, were reportedly "blindsided" by the board's decision and pushed for the company to reinstate Altman.

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Sutskever even said on Monday that he regretted his role in pushing Altman out. But, an attempt to bring Altman back as CEO reportedly fell apart on Sunday night and OpenAI instead brought in former Twitch CEO Emmett Shear as interim CEO. Meanwhile, Microsoft said it had brought Altman on to lead a new AI team and hired some of his colleagues.

"The fact that Ilya now regrets just shows how broken and underadvised they are/were," Mayer wrote on social media. "They call them board deliberations because you are supposed to be deliberate."

The move to force Altman out appears to have been made possible through OpenAI's unusual governance structure. OpenAI was originally founded as a non-profit. The company later created a for-profit division of the organization, but set it up so that a board on OpenAI's non-profit would govern its for-profit subsidiary so that OpenAI could stay focused on its mission of developing its technology for the good of humanity instead of purely for the sake of profit. As a result, the majority of directors on the board cannot have financial stakes in the for-profit branch of the company.

"Most companies of OpenAI's size and consequence have boards of 8-15 directors, most of whom are independent and all of whom has more board experience at this scale than the 4 independent directors at OpenAI," Mayer wrote on X on Sunday. "AI is too important to get this wrong."

OpenAI's bylaws allow board members to both appoint and remove other board members with a majority vote, Wired reported. The board could also make such a decision without providing prior notice, according to the publication. In the case of OpenAI, which had only six board members, a majority vote meant only four board members needed to agree on a change to approve it.

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Up until this year, OpenAI more board members until LinkedIn cofounder Reid Hoffman, Neuralink director Shivon Zilis, and former Republican congressman Will Hurd all exited in 2023.

"Usually, you decide what size board (number of ppl) will best serve the company and then as people leave you fill slots with an eye on diversity of experience (operators, investors, legal and financial expertise, industries, etc)," Mayer wrote on Sunday. "The board was OK until a few months ago when it shrank. They should have refilled those seats then."

Mayer and spokespeople for OpenAI did not immediately respond to a request for comment.

On Sunday, The Information reported that the former Yahoo CEO's name had been tossed around by "people close to OpenAI" as a potential addition to the board, along with Hoffman and Airbnb CEO Brian Chesky. At the time, investors were reportedly working behind the scenes to push the current board to bring Altman back and make changes to its board.

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