17 Nov Trust Incident OpenAI
Case Author
Claude 3.5 Sonnet, Anthropic, ChatGPT o1 for model constructs and cues, peer-reviewed by DeepThink (R1), DeepSeek
Date Of Creation
14.02.2025
Incident Summary
OpenAI experienced a severe governance crisis when CEO Sam Altman was suddenly removed by the board, leading to employee revolt, Microsoft intervention, and eventual reinstatement with board restructuring, highlighting tensions between AI safety and commercial interests. Addendum: ""…stemming from conflicts between its nonprofit mission and commercial pressures from partnerships like Microsoft, exacerbated by opaque board processes.""
Ai Case Flag
non-AI
Name Of The Affected Entity
OpenAI
Brand Evaluation
4
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Industry
Technology & Social Media
Year Of Incident
2023
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Key Trigger
Sudden removal of CEO Sam Altman by the board citing communication issues and loss of confidence
Detailed Description Of What Happened
On November 17, 2023, OpenAI board abruptly fired CEO Sam Altman, citing a breakdown in communications and loss of confidence in his leadership. This triggered a chain of events including mass employee protests, intervention by major partner Microsoft, and intense negotiations. Nearly all employees threatened to resign, signing a letter demanding board resignation. After five days of crisis, Altman was reinstated as CEO with a new board structure, highlighting fundamental tensions between OpenAI nonprofit mission and commercial interests.
Primary Trust Violation Type
Integrity-Based
Secondary Trust Violation Type
Benevolence-Based
Analytics Ai Failure Type
N/A
Ai Risk Affected By The Incident
N/A
Capability Reputation Evaluation
4
Capability Reputation Rationales
Before the incident, OpenAI demonstrated exceptional technical capability through groundbreaking AI models like GPT-4 and DALL-E. The company led AI innovation, successfully commercialized advanced AI technologies, and maintained strong partnerships with industry leaders like Microsoft. Their rapid deployment of ChatGPT showed outstanding operational execution, reaching millions of users globally. Pre-crisis reports highlighted opacity in governance and decision-making.
Character Reputation Evaluation
4
Character Reputation Rationales
Prior to the crisis, OpenAI maintained a strong character reputation built on their commitment to developing safe and beneficial AI. Their unique nonprofit governance structure, transparency about AI risks, and public commitment to responsible AI development earned them trust. The company regularly published research papers and engaged in open dialogue about AI safety concerns.
Reputation Financial Damage
The crisis caused significant but temporary market uncertainty, with Microsoft stock dropping briefly. While financial impact was limited, reputational damage included questions about governance stability and organizational structure. The incident exposed internal tensions and raised concerns about OpenAI unique corporate structure, though quick resolution helped minimize long-term impact.
Severity Of Incident
3
Company Immediate Action
Initial communication was limited and opaque, but the organization quickly entered intensive negotiations. Most employees showed solidarity with Altman, threatening mass resignation. The board engaged with stakeholders including Microsoft, ultimately agreeing to reinstate Altman and restructure the board. The response evolved from crisis to structured resolution within five days. Harm was reputational (not direct user/data impact).
Response Effectiveness
The response proved effective despite initial chaos. Key success factors included: employee unity, Microsoft constructive intervention, willingness to restructure governance, and swift resolution timeline. The quick reinstatement of leadership and board restructuring helped stabilize the organization and preserve key partnerships, though some reputational damage around governance stability remained.
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Model L1 Elements Affected By Incident
Brand, Social Protector
Reciprocity Model L2 Cues
Transparency & Explainability, Accountability & Liability
Brand Model L2 Cues
Brand Ethics & Moral Values, Brand Image & Reputation, Brand Purpose & Mission
Social Adaptor Model L2 Cues
N/A
Social Protector Model L2 Cues
Affiliation & Sense of Belonging, Media Coverage & Press Mentions
Response Strategy Chosen
Apology, Reparations & Corrective Action
Mitigation Strategy
OpenAI response evolved from initial crisis to structured resolution through multiple phases. After the initial board decision sparked crisis, the response included intensive stakeholder engagement, particularly with employees and Microsoft. The final resolution included leadership reinstatement, board restructuring, and improved governance mechanisms. This demonstrated adaptability while preserving core mission and relationships.
Model L1 Elements Of Choice For Mitigation
Brand, Social Protector
L2 Cues Used For Mitigation
Transparency & Explainability, Accountability & Liability, Community Moderation & Governance
Further References
https://theconversation.com/openais-board-is-facing-backlash-for-firing-ceo-sam-altman-but-its-good-it-had-the-power-to-218154, https://en.wikipedia.org/wiki/Removal_of_Sam_Altman_from_OpenAI, https://news.sky.com/story/majority-of-openai-employees-threaten-to-quit-and-join-microsoft-if-board-dont-resign-13012282, https://www.wired.com/story/openai-staff-walk-protest-sam-altman/, https://www.theguardian.com/technology/2023/nov/20/sam-altman-openai-exit-ai-microsoft, https://www.theverge.com/2023/11/22/23967223/sam-altman-returns-ceo-open-ai
Curated
1
The Trust Incident Database is a structured repository designed to document and analyze cases where data analytics or AI failures have led to trust breaches.
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