1. Think carefully about who might hire your CEO the moment you let him go
When Sam Altman was fired, Microsoft offered him a senior AI role almost immediately. Greg Brockman received the same offer. If both founders had moved to Microsoft permanently, OpenAI would have risked losing crucial expertise and possibly weakening its first‑mover advantage in a market where leadership changes can shift entire technological trajectories.
Contractual restrictions on intellectual property and non‑compete clauses would have limited what Altman and Brockman could share. Microsoft already held a minority stake in OpenAI after its 2019 investment of $1 billion and had the exclusive licence to GPT‑3’s underlying technology. This meant the risk of sensitive information leaking was likely small. Even so, speculation grew that Microsoft could buy OpenAI outright, although regulators have recently scrutinised Microsoft’s acquisitions of smaller but powerful competitors. I previously wrote about the US and UK competition authorities initially blocking but later allowing Microsoft’s acquisition of Activision.
2. Consider how your employees will react to losing their CEO
Microsoft did not need to buy OpenAI. It simply offered to hire the entire workforce. About 743 of the 770 employees threatened to resign unless the board stepped down and reinstated Altman and Brockman. A mass departure of engineers and technical staff would have severely damaged OpenAI’s ability to continue developing its technology.
Non‑compete clauses may have limited employees from founding rival companies, but they would not have prevented them from joining Microsoft. This episode demonstrated the power of collective action in the tech sector and may set a precedent for employees to mobilise when leadership decisions threaten the direction of their work.
3. Communicate clearly why you are firing your CEO
The backlash was fuelled by silence. The board did not clearly explain Altman’s removal, prompting speculation that he was pushing AI development too quickly or prioritising profit over safety. This theory is weak given OpenAI’s structure. A non-profit governs the for-profit company to ensure AI is developed with safety in mind. Altman also urged the US Congress in May to regulate AI, which is rare for a tech founder.
The lack of communication worsened the situation. Ilya Sutskever, who cast the deciding vote to fire Altman, publicly stated that he regretted the decision. If the firing had remained permanent, unclear reasoning could have exposed OpenAI to claims of unfair dismissal, depending on what Altman and Brockman were told.
Conclusion
Before firing a senior leader, especially a founder, boards must consider 3 things. First, where that leader will go next and how their expertise might shift competitive advantage. Second, how employees will respond, particularly when they hold the technical knowledge that keeps the company alive. Third, why the leader is being fired and how clearly that reasoning is communicated to avoid backlash, investor panic and potential litigation.
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