OpenAI investors consider suing board after Altman's ouster: report

Board of ChatGPT creator facing potential legal action as AI company scrambles amid chaos

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.

Sam Altman speaking at an event

Then-OpenAI CEO Sam Altman speaks during a keynote address announcing ChatGPT integration for Bing at Microsoft in Redmond, Washington, on Feb. 7, 2023. (Jason Redmond/AFP via Getty Images / Getty Images)

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.

Satya Nadella speaks as Sam Altman looks on

Microsoft CEO Satya Nadella, right, and Sam Altman during the OpenAI DevDay event on Nov. 6, 2023, in San Francisco. (Justin Sullivan/Getty Images / Getty Images)

Ticker Security Last Change Change %
MSFT MICROSOFT CORP. 414.92 -0.58 -0.14%

Microsoft, Inc.

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.

The OpenAI logo is seen on a mobile phone

ChatGPT developer OpenAI remains in turmoil after its board fired Sam Altman as CEO last week. (AP Photo/Michael Dwyer, File / AP Newsroom)

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.