The current chaos at OpenAI has investors in the ChatGPT creator considering legal action against the board, according to a new report.
Sources told Reuters that investors are mulling their options, including possibly suing the company's board of directors after the panel unexpectedly fired Sam Altman as CEO last week, sparking an employee revolt and speculation over whether the valuable artificial intelligence startup will survive.
The investors fear they could lose hundreds of millions of dollars if OpenAI goes under.
Since OpenAI's board of directors fired Sam Altman as CEO on Friday and failed to negotiate his reinstatement over the weekend, the situation has only devolved further.
SALESFORCE MOVES TO RECRUIT UNSETTLED OPENAI WORKERS AMID ALTMAN DEPARTURE
On Monday, Microsoft announced it had hired Altman and OpenAI co-founder and President Greg Brockman to lead a new advanced AI research team at Microsoft. Then, nearly all of OpenAI's 770 or so employees signed a letter threatening to leave for Microsoft, too, unless Altman is brought back and OpenAI's board members step down.
Prior to Altman's departure, OpenAI had an estimated valuation of roughly $90 billion. Microsoft, which has invested some $13 billion in the company, owns 49% of the for-profit portion of the operation, sources told Reuters. Other investors and employees control 49%, and 2% is owned by OpenAI's nonprofit parent, according to Semafor.
WHAT TO KNOW ABOUT OPENAI'S NEW INTERIM CEO EMMETT SHEAR
While OpenAI is currently in turmoil, the company is reportedly working to stabilize the situation. OpenAI President of Global Affairs Anna Makanju sent an internal memo to staff saying management is in "intense discussions" with Altman, interim CEO Emmett Shear, and the board to unify the company, according to Bloomberg.
Regardless of the outcome, frustrated investors would likely have an uphill battle if they were to file suit against the board.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
University of Nebraska law professor Paul Weitzel told Reuters that investors would have a "weak case" if they brought legal action against the board.
