Paul Graham Asserts Sam Altman Wasn't Dismissed from Y Combinator

On Thursday, Paul Graham, co-founder of the startup accelerator Y Combinator, took to X to debunk rumors regarding Sam Altman's resignation as president of Y Combinator in 2019, which some claimed was due to alleged conflicts of interest.

“People have been claiming [Y Combinator] fired Sam Altman,” Graham stated. “That’s not true.”

I grew weary of hearing that YC fired Sam, so here's the real story: pic.twitter.com/3YvBDH7oqV— Paul Graham (@paulg) May 30, 2024

Altman joined Y Combinator as a partner in 2011, initially on a part-time basis. By February 2014, Graham promoted him to president. In 2015, Altman, alongside notable figures like Elon Musk, Peter Thiel, and Y-Combinator founding partner Jessica Livingston, announced the launch of OpenAI as a nonprofit, securing $1 billion in funding.

For several years, Altman balanced his roles at Y Combinator and OpenAI, effectively leading both organizations. However, Graham recounts that when OpenAI revealed plans in 2019 for a for-profit subsidiary with Altman as CEO, Livingston informed Altman that he needed to choose between the two: OpenAI or Y Combinator.

Graham explained, “They told him if he wanted to work full-time at OpenAI, we’d need to find someone else to run YC, and he agreed. If he had decided to find someone else to lead OpenAI to focus solely on YC, we would have been okay with that as well.”

This account challenges previous reports suggesting that Altman was ousted after Y Combinator partners alleged he prioritized personal ventures like OpenAI over his responsibilities as president. A Washington Post article last November claimed Graham abruptly ended a foreign trip to fire Altman.

Helen Toner, a former board member at OpenAI involved in Altman’s departure, suggested in an appearance on the Ted AI Show podcast that the reasons behind Altman’s resignation from Y Combinator were deliberately downplayed.

Reports indicated that some Y Combinator partners were concerned about Altman's indirect stake in OpenAI while serving as president, particularly since Y Combinator’s late-stage fund invested $10 million in OpenAI’s for-profit arm.

However, Graham asserted that the investment occurred before Altman transitioned to a full-time role at OpenAI and that he was unaware of it at the time. "This was not a very significant investment for those funds,” Graham stated. “And it clearly wasn’t influencing my decisions, since I just learned about it five minutes ago.”

Graham’s remarks come at a time when an op-ed in The Economist, authored by OpenAI board members Bret Taylor and Larry Summers, counters claims from Toner and Tasha McCauley—another former board member—that Altman may not be dependable in managing profit-related pressures.

Toner and McCauley raise valid concerns. Reports from The Information suggest that Altman is contemplating transforming OpenAI into a for-profit corporation as investors, especially Microsoft, urge the organization to prioritize commercial initiatives.