OpenAI CEO Sam Altman Is 'Embarrassed' Over Company's Threat to Revoke Equity if Exiting Employees Refuse to Sign NDA

By Jace Dela Cruz

May 20, 2024 03:21 AM EDT

OpenAI CEO Sam Altman has been embarrassed by the company's policy of threatening to revoke vested equity from exiting employees who refused to sign a non-disclosure and non-disparagement agreement. 

A Year In TIME
NEW YORK, NEW YORK - DECEMBER 12: Sam Altman speaks onstage during A Year In TIME at The Plaza Hotel on December 12, 2023 in New York City.
(Photo : Mike Coppola/Getty Images for TIME)

Sam Altman Is Embrassed Over OpenAI's Equity Threat 

According to Vox, the departing employees faced a difficult choice between retaining their vested equity, potentially worth millions of dollars, and their ability to speak openly about their experiences at OpenAI.

The agreement includes non-disclosure and non-disparagement rules that forbid departing employees from criticizing OpenAI for life or from even claiming to have signed an NDA. Not signing the agreement means former employees will lose all their vested equity in the company.

Sam Altman confirmed the existence of such a provision but clarified that OpenAI had never enforced it. He emphasized that vested equity remains intact regardless of whether employees sign separation agreements or agree to non-disparagement terms.

READ NEXT: OpenAI Executives Say Elon Musk's Lawsuit Stems From His 'Regrets' That He's No Longer Part of the Company 

OpenAI Corrective Measures Underway

Acknowledging the oversight, Sam Altman took responsibility for the situation, admitting that the provision should not have been included in exit documents. 

He assured that corrective measures were underway to rectify the issue, indicating a revision of the standard exit paperwork to address concerns by former employees affected by the outdated agreements.

"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," Altman said in a post on X

READ MORE: Sam Altman Receives $75 Million From the University of Michigan for New Venture Capital Fund: Report 

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