OpenAI’s GC Chang Shares Insights from ‘Extremely Stressful’ Job

OpenAI is a relatively new tech startup with the litigation demands of a massive Fortune 500 company. That means that Che Chang, its general counsel, has had to scale up his department fast.

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On today’s episode of our podcast, On The Merits, Chang speaks with Bloomberg Law reporter Aruni Soni about how he hires lawyers to work for the ChatGPT maker and how OpenAI works with its outside law firms.

On top of these usual legal officer duties, Chang discusses the “immense responsibility” of guiding decisions around the “future of human intellect.”

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This transcript was produced by Bloomberg Law Automation.

Host (David Schultz):

Hello and welcome back to On the Merits, the news podcast from Bloomberg Law. I’m your host, David Schultz.

OpenAI is not like your typical tech startup. And as a result, the legal team for the maker of ChatGPT isn’t typical either. It’s got a lot of work on its plate. In addition to defending the company against copyright, tort, and other types of lawsuits, OpenAI’s lawyers just completed the tricky procedure of converting it from a nonprofit to a for-profit entity.

The top attorney at OpenAI is Che Chang, and he’s our guest today on the podcast. He spoke with Bloomberg Law reporter Aruni Soni about how he’s relinquished some control over selecting outside law firms to work with and about the stress of working for a company that believes it can and will change the world.

First, he talked about just how quickly the legal team at OpenAI has grown over the past few years.

Che Chang:

When I first joined in 2021, it was a very different company. It was just over a hundred people or so, which is almost the size of the legal team today, right? And so things have changed a lot. And when I joined, it was a company that was well known in the AI space, but nobody had ever heard of it outside of that. And I was fortunate enough to be working in the industry already. And so I understood the potential and the challenges that would come with it. And so I joined as the second lawyer. And since then, every year the company has grown by multiples and our legal team has grown by multiples to catch up and support all the different things that we’re doing, right?

Aruni Soni:

Were there any inflection points throughout the four years where you kind of realized you needed certain expertise on your team? Was it after a release of any kind of product? I’m thinking obviously, ChatGPT. Was it, you know, when you first started seeing some of the lawsuits trickle in? Can you kind of walk me through how exactly your team grew and what kind of skills and expertise you were looking for?

Che Chang:

You know, the first year and a half or so when I was here, we, you know, we were kind of just doing our own thing. We had an API, we came out with something called DALL-E, which is the drawing model, and then obviously ChatGPT was a big inflection point, right? So I’d say the first year, year and a half, we grew pretty, pretty slowly and steadily, just that, you know, we needed some commercial lawyers and product lawyers and just kind of would pick people up.

Then obviously ChatGPT came out and there was just an immense rush of attention and interest and fear and worries and concerns. And so how do we, I thought about Bill, how do we build a team from there? And you could, you could tell, you know, we got sued, you would, you know, there were more suits on the horizon. We would need to build out a really good litigation team, a lot of, you know, regulates inbound from government questions and, you know, just concerns and worries and fears, and so we’re going to have to build out, you know, people who understand the regulatory processes and things like that.

Then, you know, obviously our, at some point our corporate structure became a thing that, that, that got a lot of attention as well. And so we had corporate people, we continued to build out that team and think about how do we, how do we handle this very unique structure that we have within the confines of all the attention and the, the, the inbound that we get.

And so every year, I would say every, every three to six months, the industry changes massively and our company also changes because either because we’re releasing things, new things that have a large impact or other outside forces or something happens that make us think about what we need to do next. And so then we just kind of ideally on a scale before, well, before that time, I’ve thought through, okay, here’s what we’re coming up with next. Here’s what we anticipate the reaction is going to be. And how do I start going and finding and interviewing those people that, that are going to be able to help?

So one, one very simple example is, you know, we had a lot of inbound on from privacy regulators when ChatGPT first came out. And so we quickly realized, Hey, we probably will need people, a team over time that’s going to handle this stuff. Right. And when we have, for example, our Microsoft relationship and partnership started getting a lot of scrutiny, we realized, Hey, we probably need antitrust experts that are going to be able to help us navigate this and so on.

So it was just like, as you know, this like three to six months phase change in the industry and the company, we kind of tried to do our best to anticipate when that’s going to come, what’s going to happen and then, and then build ahead of time for that. And then sometimes you just have to, sometimes you don’t get it right. Sometimes you just have to scramble after the fact to go find people and find experts to in a specific area. That’s obviously when we lean a lot on outside counsel and no referral networks and things like that.

Aruni Soni:

You bring up outside counsel, and that’s also something I wanted to ask you with the influx of all these lawsuits, OpenAI’s facing copyright lawsuits, trademark lawsuits, tort lawsuits. How do you pick who you want to work with?

Che Chang:

Yeah. So I’ll start by my own team because that, that drives a lot of it, right? I don’t end up picking a lot of the, the law firms myself anymore. I used to do that, but now I kind of rely on my leaders to figure out what, what’s the best law firm for this use. And so I would say, generally speaking, we’re, we’re at such an early stage of the industry and every decision that we make in every lawsuit and every finding and every, you know, every outcome is still very critical to how the industry is going to go, how our mission and whether our mission is going to be successful, how the company is going to do and so on.

And so we, right now, there’s not a lot of routine matters that we have. So, so we, we tend to look for people who are going to be best in class in, in whatever they’re doing. Right. So for example, when it comes to our unique corporate structure, we look for firms and lawyers that are world experts in that area, when it comes to our copyright and IP lawsuits, we look for firms that are, you know, very extremely well regarded and also world experts in the area and so on.

And so it’s just like, we got, we go out there, we look for the best. We generally have, you know, it’s not a, it’s not a huge industry. We know what all the different firms and the lawyers and what they’re capable of. And we’ll pick the ones that we think fit best, both for the substantive issue, as well as a kind of cultural and, and interaction dynamic as well.

Aruni Soni:

I’m kind of wondering, like, I guess this community is pretty big, but also small. Like, you know, who’s good for what is that kind of the case, would you say?

Che Chang:

I would say generally, yes. Right. Like you, you know, which firms are the best in the world that you don’t take corporate or this, this area of litigation or this area of product or licensing. The thing that’s unique and special about what we’re doing is that until very recently, no one knew AI in those contexts, right? They, they kind of were experts in their field. We, along with them are kind of co-developing and collaborating to figure out, Hey, where, where is this field going to go when it comes to AI, right?

Like copyright, obviously it’s a very established field. It’s been around for a long time. It focused on very different things until the last few years. And same thing for, you know, corporates and same thing for licensing and all that. And so the other thing that we have to think about when we find people is, you know, can they pick this up quickly? Can they adapt to the way things are going to be? Not just like, you know, if you have a really good practice on historical issues in this area, but like, are you going to be able to switch up your thinking and your, and your team and your, and your, the people and just like be able to immerse yourselves in what you and what we are doing and what we need from you. Um, over time.

Aruni Soni:

When you are working with these law firms who are litigating a variety of lawsuits, what does the in-house counsel team’s coordination with outside counsel look like when it comes to developing strategy, which route you want to go? How do your conversations proceed with them?

Che Chang:

Yeah. So I’ll talk about it at two different levels versus the team’s level, because they, they do a lot that most of the strategic direction I kind of just check in and, and, you know, um, do, do what I can on the edges, but at a team level, first of all, the way I think about, I think the way that my team thinks about it is we are ultimately responsible for the outcomes, right? Like outside counsel is one of the factors and one of the inputs and whether we think we will be successful in that outcome. So ultimately the responsibility lies with us, the strategic choices, the direction, the high level, all that lies with us.

And obviously there’s a lot of close collaboration with our kind of outside experts as well, but it’s like, how do we ultimately need to make sure this is right. So the onus is on us to make sure it gets right. And so we hold our, our, our outside lawyers to a very high bar. We ask a lot of them. We, we kind of, you know, give them a lot of high level. Direction and suggestions and then take their input and kind of turn that into like, uh, you know, where we want to go on a certain specific case or specific issue. And there’s obviously a lot of areas where we’ll defer to their expertise, but ultimately we have to make those calls and those are the ones that, you know, we’re going to be responsible. And so, so, so we, we have to hold the reins there.

What I do. So I have a different, I kind of come up for a different approach, right? So very tactically, I have a litigation folder with it’s there’s hundreds or thousands of emails a day. So I don’t check every email. I don’t read it all as it goes in, but I will go check in, you know, every once every day or two, go skim through all the emails, read the ones that seem important. And then kind of, in addition to updates from the team, I will kind of say, Hey, where are we going on this? How does this, why are we doing that? Like, how does that look? And obviously they’ll push out important things that happen. So for all our lawsuits, you know, I’ll generally have a good sense of what our strategy and trend is. And I’ll weigh in occasionally on this, but I will also defer to our experts who are much better at this than I am.

Aruni Soni:

Tell me a little bit about what your day to day looks like, you know, like your litigation folder and checking through some of that is obviously one piece, but what is your day look like generally as, you know, general counsel of this important AI company?

Che Chang:

This is a cliche, but no day is the same, right? It is just whatever is the most important thing going on. And, and so it, you know, I’ll bounce between, you know, issues with our corporate structure and, you know, or maybe like a financing or M&A deal to, you know, what are, what are our latest launches look like? You know, how’s the research path? What are, what are some challenges we’re seeing there? What are some legal issues with the products we’re bringing out to, you know, what are, what are we doing on the commercial side or deal negotiations? We recently announced a bunch of big deals with infrastructure providers and that, and then, you know, checking on litigation, regulatory stuff, checking on, you know, antitrust work, our policy work. And, and just, so just, it really depends on what’s, what is the company’s priorities at the time that, you know, on a day by day or week by week or month by month basis.

And as you, as I said earlier, those change very frequently, you know, what is the biggest fire going on? You know, when, when, when our CEO got fired a couple of years ago, that was all I worked on for, for, you know, for weeks. I jump around a lot. So it’s a lot of context switching. And then I try to, I don’t, don’t do as good a job of this as I’d like to, but I try to save a bit of time, but like, okay, what, how about organizationally, you know, process-wise, culture-wise, management-wise, how are we doing? It’s, it’s hard to, you know, the analogy you hear a lot is you build the plane as you’re flying it. And it’s, it’s very, it’s very fun to do that, but it’s also very challenging, right? So how do we add all these people at such a rapid clip while dealing with all these problems and make sure that they pick up the resources and the information and the, and, and, you know, just are immersed properly in a way that makes them successful as well. And where’s the long-term arc of the team and the company going to go?

And then, you know, obviously there’s also bigger picture, you know, questions as a company executive, like where, where are we doing? What are, what do we want to do in these different areas? And so the best and worst parts of my job are juggling all of those different things at the same time. And that’s like a typical week for me is just some variation of all of those in whatever makes it most important.

Aruni Soni:

Is it a stressful job?

Che Chang:

It is an extremely stressful job. Uh, the way I, the way I tell people is it is, this is, this is, the job is just very energizing, basically because the things we work on are so cool and it’s also very exhausting. And I have some horror stories from how, about how stressful it is, but it’s, it is not a job for someone who is not ready for the pace and intensity and, and just kind of the immense responsibility that comes with this.

So this is a few months after ChatGPT came out, there was a, we were just dealing with fires nonstop. Right. And so there was an article that came out in the Wall Street Journal is a op-ed, I think it was by Henry Kissinger and Eric Schmidt and the Dean of the MIT computing school. And it said something like ChatGPT heralds an intellectual revolution. This is the future of human thinking. And it was just, it was a lot. And I remember reading that. And for the first time, I, I think I thought to myself, I got to sit down a little bit and process this because I thought I was just working at a company.

I think that, that is the underlying stress, right? The, the, it’s the, some of the data, it’s not the litigation. It’s not, it’s not, it’s, it is a, we are doing something that is changing the world in a non-cheesy way, in a very real way. We are, we are trying, we are on the path to accomplishing our mission of, you know, bringing, you know, make sure AGI benefits everybody. And so are we doing the right things along each step? Like, are we making the right choices? And you’re never going to know except in hindsight. Right. And so every decision that we make comes with this gravitas of, I hope this is the right one. You know, we’ve reasoned it out. We’ve thought it out. We’ve, you know, we have the smartest people in the world working on it, but like, maybe it’s not the right one. And, and these are just, and you all, there’s not just one of these. There’s dozens of these a week. Right.

Aruni Soni:

Obviously in the AI space, there’s a crazy war for talent. And I think obviously that applies to the legal space as well within these AI companies. And I want to understand how you’re thinking about gathering and accumulating that talent. And, you know, as you build out your team, what is it that draws somebody to OpenAI’s legal team versus, you know, any other AI company out there?

Che Chang:

Yeah, I would say the, the two things that draw people here are mission orientation. A lot of people work at a lot of big tech companies and had a lot of great learnings from that. And they say, okay, I like what I’m doing, but I want to do it better or differently, or with a different kind of mission orientation. I think those people are usually the ones that are the most aligned with what we’re trying to do.

And then the other thing, which is similar is, do they have a mentality of wanting to build new things, right? Lawyers typically are not viewed as the most creative or most build oriented people. We are, we are risk managers, you know, among other things. But I do look for mentalities where I’ve done really great things in my career. I’ve learned a lot of things. I’ve learned how to do things well. I’ve learned when things don’t go well, and how do I take all those things and turn them into something at a new place where I get to almost build from scratch and create from the ground up and, you know, create these team and processes and thinking and make decisions and so on that give me more personal responsibility in them, but also make it more rewarding because I get to I get to do that with my own hands.

Aruni Soni:

These lawyers on your team, where are they coming from? Are they coming from law firms? Who are the people who are making up your team? And has that also changed over time?

Che Chang:

Yeah, it’s definitely changed. And so we have it’s a it is a melting pot of different organizations and cultures. And so we’ve got people from big tech companies, you know, big, big non-tech companies, small startups. We’ve got people from government. We’ve got people from academia. We’ve got people from law firms. And so it’s been very fascinating seeing the organizational differences. And you learn a lot about a company by the by the people who come here. Right. And so we’ve got people from, you know, big tech companies. You see the different ways that they interact. You’ll be from government and see how they interact. And then having that all smush it all together and what we’re doing at the pace and the velocity that we’re moving and the speed that we’re moving and the rate of growth is is in itself, I think, a fascinating organizational exercise of discussion.

We tend to hire people more on the senior end of the chain because just there’s so much that needs to be done and there’s not a ton of handholding that can happen. But, you know, some of the most promising people we’ve hired have been more junior people who have taken a big leap and we’ve made a bet on them. Then they made a big bet on themselves and they just turned out extremely great. We’re also experimenting with that. We actually recently hired a couple of people just out of college who are interested in law school and are kind of just helping out as a kind of like a contract analyst type position. And they’re doing fantastic as well. And so I think as we continue to grow, we’ll probably even out a little bit more. We’ll look for people along all stages of the career spectrum. But we’ve tended to slant more heavily on the more senior people so far.

Host (David Schultz):

That was Che Chang, the general counsel at OpenAI, speaking with Bloomberg Law’s Aruni Soni. And that’ll do it for today’s episode of On the Merits. For more updates, visit our website at News.BloombergLaw.com. Once again, that’s News.BloombergLaw.com.

The podcast today was produced by myself, David Schultz, our editors were Chris Opfer and Alessandra Rafferty, and our executive producer is Josh Block. Thanks, everyone, for listening. See you next time.