OpenAI Saga: How the corporate drama will impact the company's brand
As the saga unfolds at OpenAI, brand experts believe such instances of turmoil can be unsettling for consumers and impact the brand.
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2023 has been a year of corporate dramas. Elon Musk turned Twitter into X. Mega layoffs hit Big Tech. And, now OpenAI is playing music chairs with its leadership in the midst of an employee revolt. Here’s what has happened so far. Last week, the human face of Artificial Intelligence and chief executive of OpenAI, Sam Altman was suddenly and dramatically fired by the OpenAI board. OpenAI was founded as a non-profit organisation and its board oversees a commercial subsidiary of which Altman is CEO. The board asked Altman to leave because he was not “consistently candid in his communications” with them and was thus “hindering its ability to exercise its responsibilities”. Greg Brockman, OpenAI president and co-founder, announced his exit immediately after Altman's unceremonious departure.
OpenAI’s chief technology officer Mira Murati was made the interim CEO. Barely two days later, former Twitch CEO Emmett Shear was made CEO, as per an announcement made by Microsoft boss Satya Nadella. OpenAI’s investors, led by its biggest investor - Microsoft, stirred up another storm. Microsoft hired Altman and Brockman to head a new advanced AI research unit at the company. Over 500 OpenAI employees have threatened to quit the firm unless the board resigns. According to them the board has jeopardized all their work and undermined the company. “Your conduct has made it clear you did not have the competence to oversee OpenAI,” they stated in a letter. The signatories include Murati and co-founder and chief scientist Ilya Sutskever, who first voted to oust Altman and later had a change of heart.
While the world is confused by the OpenAI saga, brand experts tell Storyboard18 these events will have an impact on OpenAI’s brand. Meenakshi Menon, founder of Spatial Access (which is now a Deloitte business) opines such corporate episodes suddenly get attention outside of the area of expertise and that can be unsettling to the consumers. Menon recalls how Jeff Bezos’ divorce news had a negative impact on Amazon share price.
It also creates tension in the investor community. “It takes the corporate eye off the ball and creates a state of flux in the organisation,” she says.
Anil S Nair, an independent director on the board of Kalyan Jewellers, board advisor to Packfora and founder of Goodwind Mototours, believes corporate boardroom dramas do have some impact on the brand equity. However, he says it will affect consumers only if they think the product will be compromised because of a change in leadership. “In the case of OpenAI, I presume that the twist in the tale may work in the brand's favour. If eventually Sam gets reinstated thanks to internal and external revolt this is an amplifying moment in brand's history,” he adds.
Nair seconds Menon and says investors on the other hand need to worry.
“Markets are sentiment driven and Sam is a much loved tech leader and AI pioneer. The brand valuation is dependent on a whole lot of softer aspects as much as it is on hard numbers. Investors worry about the future and the war at the boardroom was about the future of OpenAI and more importantly future of AI itself,” he concludes.
