Jobaaj Stories
Some investors in OpenAI, the company behind ChatGPT, are looking into legal options against OpenAI's board members, according to sources talking to Reuters on Monday. This comes after the board fired CEO Sam Altman, causing many employees to possibly leave.
The sources said investors are working with lawyers to see what they can do. It's unclear if the investors will actually sue OpenAI.
The investors are worried that they could lose hundreds of millions invested in OpenAI, a top startup in AI.
OpenAI didn't respond to a request for comment.
Microsoft owns 49% of OpenAI. Other investors and employees own 49%. The nonprofit parent company owns 2%.
The board fired Altman on Friday due to poor communication, based on a memo seen by Reuters.
Usually, investors have board seats or voting power. But OpenAI is controlled by its nonprofit parent. So employees have more sway than investors in pushing the board.
Read, What sets options and futures apart in the field of finance?
That's by design. OpenAI started as a nonprofit but added a for-profit arm in 2019 for funding. This lets the nonprofit keep control and stay true to its mission.
Nonprofit boards must act carefully and avoid self-dealing. But they still have a lot of freedom in decisions. And OpenAI used a limited liability company structure. This may further protect the nonprofit board from investors.
Even if investors sued, they likely can't win. Companies can legally make risky business choices. Firing visionary founders sometimes happens, like when Apple fired and then re-hired Steve Jobs.
Also read, What's Next? Amid talks of Sam Altman's possible return, Microsoft reveals a Big News
Join our Free Workshops!
