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Paul Graham claims Sam Altman was not fired from Y Combinator

In a series of posts on X on Thursday, Paul Graham, co-founder of startup accelerator Y Combinator, refuted claims that OpenAI CEO Sam Altman was forced to resign as Y Combinator president in 2019 over potential conflicts of interest.

“People have been claiming [Y Combinator] Fired Sam Altman,” Graham wrote. “This is not true.”

Altman became a partner at Y Combinator in 2011, initially on a part-time basis, and was named president of Y Combinator by Graham in February 2014.

In 2015, Altman co-founded the nonprofit OpenAI with Elon Musk, Peter Thiel, Y Combinator founding partner Jessica Livingston and others, raising $1 billion.

For years, Altman had split his time between Y Combinator and OpenAI, effectively running both companies simultaneously. But when OpenAI announced in 2019 that it would form a for-profit subsidiary with Altman as CEO, Livingston told Altman he had to choose between OpenAI and Y Combinator, according to Graham.

“[W]e…tell [Altman] “If he was going to work on OpenAI full-time, we should find someone else to run YC, and he agreed,” Graham wrote. “If he had said he wanted to find someone else to be CEO of OpenAI so he could focus 100% on YC, we would have agreed to that, too.”

Graham’s retelling of events contradicts reports that Altman was forced to resign from Y Combinator after the accelerator’s partners accused him of prioritizing personal projects, including OpenAI, over his duties as president. According to a Washington Post report from November, Graham cut short an overseas trip to personally fire Altman.

Helen Toner, one of several former OpenAI board members who campaigned for Altman’s removal as OpenAI CEO over allegations of fraud, a position he later successfully reclaimed, also claimed on the Ted AI Show podcast that the real reason for Altman’s departure from Y Combinator “was covered up at the time.”

Some Y Combinator partners were reportedly particularly concerned about Altman’s indirect stake in OpenAI during his time as president of Y Combinator, whose late-stage fund invested $10 million in OpenAI’s for-profit subsidiary.

But Graham said the investment was made before Altman joined OpenAI full-time and without Graham’s knowledge.

“This was not a very large investment for these funds,” Graham wrote. “And obviously it had no effect on me, since I knew that five minutes earlier.”

Graham’s post appears to coincide with the timing of an op-ed written by OpenAI board members Bret Taylor and Larry Summers in The Economist, which rebuts assertions by Toner and another former OpenAI board member, Tasha McCauley, that Altman can’t be trusted to “credibly withstand the pressures of profit incentives.”

But in fact, Toner and McCauley may be right. According to The Information, Altman is considering turning OpenAI into a for-profit company as investors (especially Microsoft) urge the company to prioritize commercial projects.

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