icon on Recent trial testimony in Elon Musk’s challenge to OpenAI’s for-profit restructuring has revived scrutiny over the nonprofit board’s abrupt 2023 decision to fire CEO Sam Altman and President Greg Brockman. While some witnesses suggested the board may have relied on poor legal advice, legal experts largely agree the issue was not faulty counsel but rather shortcomings in governance. Altman and Brockman testified they were caught off guard by the decision, and the board’s lack of transparency and failure to communicate its reasoning triggered significant internal backlash. Employee support for Altman was swift and overwhelming, prompting Microsoft to offer to hire large portions of OpenAI’s workforce and ultimately leading to the executives’ reinstatement within days.
Experts note that nonprofit boards generally have broad legal authority to remove executives, particularly when trust is in question. However, they emphasize that authority alone does not equate to sound governance. In this instance, the board’s rapid decision-making, minimal internal communication, and limited effort to build organizational alignment contributed to confusion and instability. The episode has also drawn broader attention to transparency concerns at major AI organizations, especially those operating under complex nonprofit structures while wielding significant industry influence.
Joe Barber explained that the failed firing illustrates a breakdown in internal judgment rather than legal process. He pointed to Altman’s strong support among employees, describing it as “cult-like”, as a critical factor the board underestimated. Barber noted that consulting senior employees and HR before taking action could have mitigated the fallout, adding that removing a widely supported CEO without internal buy-in is inherently risky. He also observed that the detailed testimony about the firing appeared largely tangential to the core legal issues in the case, serving primarily to challenge Altman’s credibility rather than demonstrate wrongdoing by the board.
This summary is based on the Law360 Article, "AI Ouster About Governance, Not Bad Counsel, Pros Say" by Dorothy Atkins, published May 21, 2026.