OpenAI, the company behind the widely popular ChatGPT, made headlines recently with the unexpected firing of its co-founder and CEO, Sam Altman. This move has not only stirred controversy within the tech industry but has also shed light on a hidden equity issue.
Altman, who was not only a co-founder but also held a board seat, surprisingly had no equity in the company. Despite being the best-known personality of OpenAI and making valuable contributions, Altman’s lack of equity meant he had little control if anything went against him.
The concept of being a co-founder without having any voting rights or significant ownership is not uncommon. In the business world, a person can be given a mere symbolic share in a company with millions of units, simply to be recognized as a co-founder. This situation highlights the difference between having a title and having real influence or control within a company.
Taking a closer look at the practices of certain companies, including Rocket Internet, the creator of Jumia, we see how the concept of Co-founder as a Service is employed. They hire individuals, providing them with the co-founder title and substantial resources to start ventures in their respective countries. This strategy creates an illusion that a local entrepreneur is spearheading the next big thing, garnering support from the indigenous population. However, over time, the original co-founders are often replaced, and control of the business is consolidated by the corporate entity.
Although Altman himself has not expressed any grievances about his situation, it serves as a reminder of how capitalism plays with titles to advance missions. While being recognized as a co-founder may bring initial prestige and opportunities, it does not always translate into long-term decision-making power or financial rewards.
OpenAI’s decision to dismiss Altman, who played a vital role in the company’s success, raises questions about the company’s direction and the motivations behind this move. It also emphasizes the importance of equity and control in corporate structures, especially for key figures within organizations.
As this story unfolds, it will be interesting to see the impact of Altman’s departure on OpenAI’s future endeavors and how they navigate the delicate balance between talent, equity, and leadership.
