Feb 13, 2024 - Business

Khosla Ventures' Rabois: OpenAI a zero without Altman

Photo of Keith Rabois and Dan Primack at Axios BFD Miami event.

Keith Rabois (left) and Dan Primack (right) at Axios BFD Miami. Photo: Ledd Villamarzo, EDIN STUDIOS

"It's the most complicated governance structure I've ever seen my life," Khosla Ventures managing director Keith Rabois said at Axios' BFD event in Miami of OpenAI's corporate setup. "I can't really figure it out, honestly."

Why it matters: News of co-founder Sam Altman's (brief) ouster as CEO in November took its investors by surprise — including the fact that it could even happen.

The big picture: Rabois predicted that without Altman's return, "[OpenAI] would have gone to zero, literally zero. One of the theses of investing in OpenAI was, 'we're investing in Sam.'"

  • This is likely what the rest of its investors feared and fueled their efforts to get him re-hired. (Not to mention that most employees threatened to quit if he didn't come back.)
  • Microsoft reportedly played a key role in getting Altman back in, and even scored itself a board observer seat subsequently. "MSFT is subsidizing a significant amount of the R&D... so [CEO Satya Nadella] probably had a lot of leverage," Rabois said.

Yes, but: It's strange for even an early and close investor in the company to admit not fully understanding its structure.

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