Paul Graham Says Sam Altman Wasn’t Fired from Y Combinator

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In a series of posts on X on Thursday, Y Combinator co-founder Paul Graham dismissed claims that OpenAI CEO Sam Altman was coerced into stepping down as the president of Y Combinator in 2019 due to potential conflicts of interest.

“People have been claiming [Y Combinator] fired Sam Altman,” Graham writes. “That’s not true.”

Altman joined Y Combinator as a part-time partner in 2011. By February 2014, Graham had appointed him as president of the accelerator.

In 2015, Altman, alongside prominent figures like Elon Musk, Peter Thiel, Y Combinator founding partner Jessica Livingston, and others, announced the formation of OpenAI as a nonprofit, securing $1 billion in funding.

For several years, Altman managed both OpenAI and his responsibilities at Y Combinator. However, per Graham, when OpenAI declared in 2019 that it would launch a for-profit subsidiary with Altman as CEO, Livingston urged Altman to choose between OpenAI and Y Combinator.

“They told him ‘if he was going to work full-time on OpenAI, we should find someone else to run YC, and he agreed,’” Graham writes. “If he had decided to prioritize Y Combinator and find another CEO for OpenAI, we’d have been okay with that too.”

Graham’s account contradicts reports that Altman was forced out of Y Combinator due to allegations from partners that he prioritized his personal ventures, including OpenAI, over his presidential duties. A Washington Post article from November even claimed that Graham interrupted an overseas trip to personally deliver Altman’s dismissal.

Helen Toner, a former OpenAI board member who was part of the group that tried to remove Altman from his CEO position at OpenAI over accusations of deceit, also claimed on the Ted AI Show podcast that the real reasons for Altman’s departure from Y Combinator were hushed up at the time.

Reportedly, some Y Combinator partners were specifically concerned about the indirect stake Altman held in OpenAI while serving as Y Combinator’s president. Y Combinator’s late-stage fund had invested $10 million in OpenAI’s for-profit arm.

Graham asserts that the investment was made before Altman committed full-time to OpenAI and that Graham himself was unaware of it.

“This wasn’t a significant investment for those funds,” Graham noted. “And clearly, it didn’t influence me, since I only found out about it five minutes ago.”

Graham’s posts come at a noteworthy time, coinciding with an op-ed in The Economist by OpenAI board members Bret Taylor and Larry Summers, which disputes claims made by Toner and another ex-OpenAI board member, Tasha McCauley, suggesting that Altman can’t be trusted to “reliably withstand the pressure of profit incentives.”

Toner and McCauley’s concerns may have merit. According to The Information, Altman is reportedly considering converting OpenAI into a for-profit entity, driven by investor pressure, particularly from Microsoft, which is pushing the organization to focus more on commercial endeavors.

Kyle Wiggers
Kyle Wiggers
Kyle Wiggers is a senior reporter with a special interest in AI. His writing has appeared in VentureBeat and Digital Trends, as well as a range of gadget blogs including Android Police, Android Authority, Droid-Life, and XDA-Developers. He lives in Brooklyn with his partner, a piano educator, and dabbles in piano himself.

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