…Sam Altman’s firing and swift reversal of fortune followed a pattern in his career, which began when he dropped out of Stanford University in 2005 and gained the reputation as a Silicon Valley visionary. Over the past two decades, Altman has lost the confidence of several top leaders in the 3 organizations he has directed. [Loopt, YC, OA (Anthropic), and OA (Board).] At every crisis point, Altman, 38 years old, not only rebounded but climbed to more powerful roles with the help of an expanding network of powerful allies…This article is based on interviews with dozens of executives, engineers, current and former employees and friend’s of Altman’s, as well as investors.

[Loopt chaos & attempted ouster] [cf. Vox2014] A group of senior employees at Altman’s first startup, a location-based social-media network started in the flip-phone era, Loopt, twice urged board members to fire him as CEO over what they described as deceptive and chaotic behavior, said people familiar with the matter. But the board, with support from investors at venture-capital firm Sequoia Capital, kept Altman until Loopt was sold in 2012.

…A few years after the company’s launch, some Loopt executives voiced frustration with Altman’s management. There were complaints about Altman pursuing side projects, at one point diverting engineers to work on a gay dating app, which they felt came at the expense of the company’s main work.…Senior executives approached the board with concerns that Altman at times failed to tell the truth—sometimes about matters so insignificant one person described them as paper cuts. At one point, they threatened to leave the company if he wasn’t removed as CEO, according to people familiar with the matter. The board backed Altman.

“If he imagines something to be true, it sort of becomes true in his head”, said Mark Jacobstein, co-founder of Jimini Health who served as Loopt’s chief operating officer. “That is an extraordinary trait for entrepreneurs who want to do super ambitious things. It may or may not lead one to stretch, and that can make people uncomfortable.” Altman doesn’t recall employee complaints beyond the normal annual CEO review process, according to people familiar with his thinking. Among the most important relationships that Altman made at Loopt was with Sequoia, whose partner, Greg McAdoo, served on Loopt’s board and led the firm’s investment in Y Combinator around that time. Altman also became a scout for Sequoia while at Loopt, and helped the firm make its first investment in the payments firm Stripe—now one of the most valuable US startups.

…Among the most important relationships that Altman made at Loopt was with Sequoia, whose partner, Greg McAdoo, served on Loopt’s board and led the firm’s investment in Y Combinator around that time. Altman also became a scout for Sequoia while at Loopt, and helped the firm make its first investment in the payments firm Stripe—now one of the most valuable US startups. Michael Moritz, who led Sequoia, personally advised Altman. When Loopt struggled to find buyers, Moritz helped engineer an acquisition by another Sequoia-backed company, the financial technology firm Green Dot. “I saw in a 19-year-old Sam Altman the same thing that I see now: an intensely focused and brilliant person whom I was willing to bet big on”, said Chung, now managing general partner of Xfund, a venture-capital firm.

[OA chaos & attempted ouster] …He made as many as 20 introductions a day, helping connect people in Y Combinator’s orbit. He helped Greg Brockman, the former chief technology officer of Stripe, make a mint selling his shares in the successful payments company to buyers including Y Combinator. Brockman co-founded OpenAI in 2015 and became its president.

…Minutes after the board of OpenAI fired CEO Sam Altman, saying he failed to be truthful, he exchanged texts with Brian Chesky, the billionaire chief executive of Airbnb. “So brutal”, Altman wrote to his friend. Later that day, Chesky told Microsoft’s CEO Satya Nadella, OpenAI’s biggest partner, “Sam has the support of the Valley.” It was no exaggeration…Altman’s job as president of the incubator put him at the center of power in Silicon Valley. It was there he counseled Chesky through Airbnb’s spectacular ascent and helped make grand sums for tech moguls by pointing out promising startups.

…In early October, OpenAI’s chief scientist approached some fellow board members to recommend Altman be fired, citing roughly 20 examples of when he believed Altman misled OpenAI executives over the years. That set off weeks of closed-door talks, ending with Altman’s surprise ouster days before Thanksgiving.…[In addition] Ilya Sutskever, also a board member, was upset because Altman had elevated another AI researcher, Jakub Pachocki, to director of research, according to people familiar with the matter. Sutskever told his board colleagues that the episode reflected a long-running pattern of Altman’s tendency to pit employees against one another or promise resources and responsibilities to two different executives at the same time, yielding conflicts, according to people familiar with the matter…Altman has said he runs OpenAI in a “dynamic” fashion, at times giving people temporary leadership roles and later hiring others for the job. He also reallocates computing resources between teams with little warning, according to people familiar with the matter.

Other board members already had concerns about Altman’s management. Tasha McCauley, an adjunct senior management scientist at Rand Corporation, tried to cultivate relationships with employees as a board member. Past board members chatted regularly with OpenAI executives without informing Altman. Yet during the pandemic, Altman told McCauley he needed to be told if the board spoke to employees, a request that some on the board viewed as Altman limiting the board’s power, people familiar with the matter said. Around the time Sutskever aired his complaints, the independent board members heard similar concerns from some senior OpenAI executives, people familiar with the discussions said. Some considered leaving the company over Altman’s leadership, the people said. [cf. WaPo]

…The board named Emmett Shear, an OpenAI outsider, as interim CEO, drawing threats to resign by most of the company’s employees. In another lucky turn of fortune for Altman, Shear was an ally and a mentor of Brian Chesky’s. Together, Chesky and Shear helped clear a path for Altman’s return.

…OpenAI’s two new board members have commissioned an outside investigation into the causes of the company’s recent turmoil, conducted by Washington litigation firm WilmerHale, including Altman’s performance as CEO and the board’s reasons for firing him.

[YC firing details] …In 2019, Altman was asked to resign from Y Combinator after partners alleged he had put personal projects, including OpenAI, ahead of his duties as president, said people familiar with the matter. [previously]…Altman turned Y Combinator into an investing powerhouse. While serving as the president, he kept his own venture-capital firm, Hydrazine, which he launched in 2012. He caused tensions after barring other partners at Y Combinator from running their own funds, including the current chief executive, Garry Tan, and Reddit co-founder Alexis Ohanian. Tan and Ohanian didn’t respond to requests for comment. [This seems to be a common theme: Altman is highly concerned about conflicts of interest by others, but not himself.]…Graham said it was his wife’s doing. “If anyone ‘fired’ Sam, it was Jessica, not me”, he said. “But it would be wrong to use the word ‘fired’ because he agreed immediately.” Jessica Livingston said her husband was correct. [Note that Livingston was one of OpenAI’s initial backers.]…To smooth his exit, Altman proposed he move from president to chairman. He pre-emptively published a blog post on the firm’s website announcing the change. But the firm’s partnership had never agreed, and the announcement was later scrubbed from the post…For years, even some of Altman’s closest associates—including Peter Thiel, Altman’s first backer for Hydrazine—didn’t know the circumstances behind Altman’s departure.

…“A big secret is that you can bend the world to your will a surprising percentage of the time”, Altman wrote in his personal blog two months before his exit from Y Combinator.

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