High-Stakes Drama at OpenAI: Another Top Executive Departs, Leaked Documents Expose Controversial Exit Policies (2024)

OpenAI, a frontrunner in artificial intelligence (AI), is currently in hot waters. Following the resignations of two senior executives from the AI startup, another key figure, policy researcher Gretchen Krueger, announced her departure on the X platform. However, Krueger submitted her notice on May 14, just hours before learning about the resignations of OpenAI co-founder Ilya Sutskever and alignment head Jan Leike. Despite the timing, her decision was made independently but echoed the concerns of her former colleagues.

Krueger explained that her resignation was due to concerns about OpenAI’s internal processes and policies. She highlighted issues such as the need for better decision-making processes, increased accountability, transparency, improved documentation, stricter policy enforcement, and more careful use of their own technology.

Krueger also stressed the importance of addressing the impacts of AI on inequality, rights, and the environment.

One of the ways tech companies in general can disempower those seeking to hold them accountable is to sow division among those raising concerns or challenging their power. I care deeply about preventing this.

— Gretchen Krueger (@GretchenMarina) May 22, 2024

The departure of five senior executives in a short period has intensified scrutiny on OpenAI.

OpenAI’s Controversial Exit Policies

Adding to the OpenAI’s troubles, leaked documents obtained by Vox have exposed troubling practices within the organization. These documents reveal that OpenAI has threatened to reclaim vested equity from departing employees and has pressured them into signing restrictive non-disclosure agreements (NDAs).

This exit policy of OpenAI essentially forced ex-employees to make a difficult choice: either forfeit potentially millions of dollars they had already earned or agree to refrain from criticizing the company indefinitely.

Like many startups in Silicon Valley, OpenAI compensates its employees predominantly through equity, with the expectation that once it has vested, it cannot be revoked – similar to paid salary.

Altman’s Apology

After the internal documents leaked, CEO Sam Altman issued an apology, asserting that OpenAI had never actually enforced these provisions and that they were revising the exit paperwork. He acknowledged the oversight and promised to correct the situation for affected former employees.

in regards to recent stuff about how openai handles equity:

we have never clawed back anyone's vested equity, nor will we do that if people do not sign a separation agreement (or don't agree to a non-disparagement agreement). vested equity is vested equity, full stop.

there was…

— Sam Altman (@sama) May 18, 2024

Despite Altman’s apology, internal documents complicated his claims. These documents, signed by Altman and other executives, clearly outlined the restrictive terms. This discrepancy has sparked further controversy, as OpenAI’s leadership faces accusations of being either unaware or deliberately misleading about the policies.

One such document, a separation letter included in the termination documents, explicitly states, “If you have any vested Units … you are required to sign a release of claims agreement within 60 days in order to retain such Units.” Notably, this document is signed by OpenAI’s Chief Strategy Officer, Jason Kwon, and VP of People Diane Yoon, who also departed the company in May.

Furthermore, a highly restrictive non-disclosure agreement (NDA), intended for the “consideration” of already vested equity, bears the signature of COO Brad Lightcap, further complicating the narrative.

These revelations add fuel to the controversy surrounding OpenAI’s leadership, casting doubt on their transparency and accountability regarding these policies.

Pressure Tactics

Many ex-employees succumbed to the pressure exerted by OpenAI. For those who persisted, the company resorted to what one ex-employee referred to as the “legal retaliation toolbox” upon leaving the company. When he declined to sign the initial termination agreement and sought legal advice, OpenAI shifted its approach. Instead of threatening to revoke his equity, they warned him that he could be barred from selling his vested equity.

Subsequent documents sent to him by the company, which Vox has reviewed, stated, “If you have any vested Units and you do not sign the exit documents, including the General Release, as required by company policy, it is important to understand that, among other things, you will not be eligible to participate in future tender events or other liquidity opportunities that we may sponsor or facilitate as a private company.”

Essentially, ex-employees faced a choice: either sign the documents or lose the opportunity to sell their equity.

The combination of these high-profile resignations and the revelations about restrictive exit policies has raised serious concerns about the internal workings of OpenAI, casting a shadow over its reputation as a leader in the AI industry. OpenAI must regain public trust by demonstrating a commitment to ethical practices and open communication.

High-Stakes Drama at OpenAI: Another Top Executive Departs, Leaked Documents Expose Controversial Exit Policies (2024)
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