Shortcuts / 21 November 2023

Sam Altman and OpenAI

Sam Altman – the high-profile CEO of the company behind ChatGPT, OpenAI, was sacked by his board in a move that sent shockwaves around the tech world. It has huge consequences for the development of one of the world’s most important tech companies, so in this Squiz Shortcut, we’ll get you across who Sam Altman is, his role in building OpenAI, and why his sacking from the company matters.

What’s going on?
That’s been the reaction of many to the news. Altman is widely respected within the tech industry. His work in the sector to develop a game-changing product and with top politicians on regulating generative artificial intelligence means he’s been the face of the technology.

Give me the Sam Altman story…
He was born in 1985 in Chicago, and he grew up in the city of St Louis in Missouri, which is in America’s Midwest. He said in a New Yorker profile that “growing up gay in the Midwest in the 2000s was not the most awesome thing”, and he turned to the internet for connection.

So he’s a tech nerd?
Totally. He learned to code at 8yo, and that took him all the way to Stanford University, where he studied computer science for 2 years. But in classic Silicon Valley style, he dropped out to work on an app. The most important thing about that is he joined a start-up accelerator called Y Combinator.

Y what what?
To start at the beginning, a start-up accelerator helps people with a business idea access funding and mentorship. In the tech world, Y Combinator has become one of the most successful.

So Altman was in this start-up accelerator…
…and working hard. It’s said that during his time there, he got scurvy… The app he was working on ended up not being a success – but Y Combinator put him into the orbit of other big names in tech. More than that, he was well-regarded, so when the original founder of Y Combinator stepped down, he asked Sam Altman if he would be the new president.

And Altman agreed?
He sure did, and he went about expanding its ambition to include tech that solved some of the world’s biggest problems, like the future of energy and medicine. He was also a doomsday prepper…

Uhh what?
Reports say that he had a stash of guns, gold, water, and gas masks in the event of a disaster. And one of the dangers Altman was most worried about was the threat of runaway AI attacking humanity.

Right? Altman wanted to do something about it, so in his spare time, he brought together other leaders in the tech industry – including Elon Musk – and started a not-for-profit organisation dedicated to averting the risk of world-ending AI. That’s OpenAI.

The company that Altman was just forced out of?
That’s the one. OpenAI was founded in 2015, and right out of the gates, Altman hired the best AI experts with the goal of advancing AI research in order to avert catastrophe.

How did he plan on doing that?
It’s a great question, and honestly, the plan was a little vague at the time – even to people within Silicon Valley. But inside OpenAI, one thing was becoming clear: to build and research AI, they would need a lot of computing power, and that computing power was going to cost a lot…

So they needed some cash?
Yep, and it proved to be a real fork-in-the-road moment for OpenAI. In 2019, Altman decided to spin out a for-profit part of the company. The move attracted criticism from the industry and even from within OpenAI, with a group of the company’s AI researchers moving on to create their own safety-focused AI start-up.

But OpenAI got the money it needed?
It did – it secured a US$1 billion investment from Microsoft, and that investment powered a couple of blockbuster years for OpenAI.

What did the company do?
In 2020, it released a language model called GPT-3, and then a year later, it released DALL-E, which is a piece of technology that can generate any image you ask for… Both those technologies laid the groundwork for the release of ChatGPT in November 2022.

What is ChatGPT?
It’s a chatbot which allows you to type a conversation with an AI. It can give you recipe ideas or help you with code or any number of things you can think of, and it’s become hugely popular.

It’s hard to believe it was only released a year ago…
That’s for sure – so much has happened since then. Microsoft has become more involved – the tech giant has built an integration of the chatbot into their search engine Bing. That set off alarms at Google, which is said to be reorienting its business around AI.

And what happened to Altman?
Almost overnight, ChatGPT made him the face of the AI industry. That status was confirmed when he appeared before a congressional committee in the US calling for government regulation.

And then he was fired…
Yep, OpenAI’s board showed him the door… The thing to note here is that this is the board that OpenAI started with when its whole purpose was in the not-for-profit space. Commentators have been talking a lot about that, given it’s now a business with billions invested by Microsoft and others.

Yeah, so Microsoft had invested US$13 billion into OpenAI, and Microsoft CEO Satya Nadella was said to be furious that he only got a minute’s notice before Altman’s firing was announced publicly.

Why did the board fire Altman?
In a statement, the board said Altman was “not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities”. That’s left a lot of room for speculation…

Sounds like there’s more to come…
For sure, but what we know for now is that Altman’s firing caused an outcry from people across the industry, including among OpenAI’s staff and investors. That’s seen a lot of pressure applied to OpenAI to reinstate him…

And will they?
Well, reports say talks to reinstate Altman have broken down, and he’s been offered a new AI leadership gig at Microsoft.

What does it mean for OpenAI?
It’s all a bit murky at the moment, so watch this space.

Squiz recommends:

Sam Altman’s Manifest DestinyNew Yorker

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