Edit: nevermind; maybe this tweet is misleading and narrow and just about restoring people’s vested equity; I’m not sure what that means in the context of OpenAI’s pseudo-equity but possibly this tweet isn’t a big commitment.
we have never clawed back anyone’s vested equity, nor will we do that if people do not sign a separation agreement (or don’t agree to a non-disparagement agreement). vested equity is vested equity, full stop.
there was a provision about potential equity cancellation in our previous exit docs; although we never clawed anything back, it should never have been something we had in any documents or communication. this is on me and one of the few times i’ve been genuinely embarrassed running openai; i did not know this was happening and i should have.
the team was already in the process of fixing the standard exit paperwork over the past month or so. if any former employee who signed one of those old agreements is worried about it, they can contact me and we’ll fix that too. very sorry about this.
OpenAI has something called PPUs (“Profit Participation Units”) which in theory is supposed to act like RSUs albeit with a capped profit and no voting rights, but in practice is entirely a new legal invention and we don’t really know how it works.
Is that not what Altman is referring to when he talks about vested equity? My understanding was employees had no other form of equity besides PPUs, in which case he’s talking non-misleadingly about the non-narrow case of vested PPUs, ie the thing people were alarmed about, right?
It may be that talking about “vested equity” is avoiding some lie that would occur if he made the same claim about the PPUs. If he did mean to include the PPUs as “vested equity” presumably he or a spokesperson could clarify, but I somehow doubt they will.
Fwiw I will also be a bit surprised, because yeah.
My thought is that the strategy Sam uses with stuff is to only invoke the half-truth if it becomes necessary later. Then he can claim points for candor if he doesn’t go down that route. This is why I suspect (50%) that they will avoid clarifying that he means PPUs, and that they also won’t state that they will not try to stop ex-employees from exercising them, and etc. (Because it’s advantageous to leave those paths open and to avoid having clearly lied in those scenarios.)
I think of this as a pattern with Sam, e.g. “We are not training GPT-5” at the MIT talk and senate hearings, which turns out was optimized to mislead and got no further clarification iirc.
There is a mitigating factor in this case which is that any threat to equity lights a fire under OpenAI staff, which I think is a good part of the reason that Sam responded so quickly.
By announcing that someone who doesn’t sign the restrictive agreement is locked out of all future tender offers, OpenAI effectively makes that equity, valued at millions of dollars, conditional on the employee signing the agreement — while still truthfully saying that they technically haven’t clawed back anyone’s vested equity, as Altman claimed in his tweet on May 18.
Edit: nevermind; maybe this tweet is misleading and narrow and just about restoring people’s vested equity; I’m not sure what that means in the context of OpenAI’s pseudo-equity but possibly this tweet isn’t a big commitment.
@gwern I’m interested in your take on this new Altman tweet:
In particular “i did not know this was happening”
What do you mean by pseudo-equity?
OpenAI has something called PPUs (“Profit Participation Units”) which in theory is supposed to act like RSUs albeit with a capped profit and no voting rights, but in practice is entirely a new legal invention and we don’t really know how it works.
Is that not what Altman is referring to when he talks about vested equity? My understanding was employees had no other form of equity besides PPUs, in which case he’s talking non-misleadingly about the non-narrow case of vested PPUs, ie the thing people were alarmed about, right?
It may be that talking about “vested equity” is avoiding some lie that would occur if he made the same claim about the PPUs. If he did mean to include the PPUs as “vested equity” presumably he or a spokesperson could clarify, but I somehow doubt they will.
I’d be a bit surprised if that’s the answer, if OpenAI doesn’t offer any vested equity, that half-truth feels overly blatant to me.
Fwiw I will also be a bit surprised, because yeah.
My thought is that the strategy Sam uses with stuff is to only invoke the half-truth if it becomes necessary later. Then he can claim points for candor if he doesn’t go down that route. This is why I suspect (50%) that they will avoid clarifying that he means PPUs, and that they also won’t state that they will not try to stop ex-employees from exercising them, and etc. (Because it’s advantageous to leave those paths open and to avoid having clearly lied in those scenarios.)
I think of this as a pattern with Sam, e.g. “We are not training GPT-5” at the MIT talk and senate hearings, which turns out was optimized to mislead and got no further clarification iirc.
There is a mitigating factor in this case which is that any threat to equity lights a fire under OpenAI staff, which I think is a good part of the reason that Sam responded so quickly.
Okay I guess the half-truth is more like this:
https://www.vox.com/future-perfect/351132/openai-vested-equity-nda-sam-altman-documents-employees