Before Friday, OpenAI seemed unstoppable.
Founded in 2015, OpenAI only became a household name in the past year or so following the release of its AI chatbot ChatGPT. If there was one company that explained the massive hype around AI it was OpenAI. Until Friday, OpenAI CEO Sam Altman—who has been on countless magazine covers and had testified at length before global regulators—was the public face of the AI boom.
On Friday, all of that ended. OpenAI’s board of directors fired Altman in one of the most unexpected Friday news dumps in recent memory. And with his exit, the competitive landscape is wide open. Pole position was once OpenAI’s—it’s now open for the taking.
“Mr. Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities,” the board wrote in a blog post. Former chief technology officer Mira Murati will take over as interim CEO.
The news of Altman’s firing wasn’t just a surprise to outsiders, but according to multiple reports, it was a shock to employees, investors, and Altman himself. Even Microsoft, which has invested $10 billion in OpenAI, integrating it with its Bing chatbot as well as its cloud services business, was reportedly blindsided by the news. In response, OpenAI president Greg Brockman resigned, though the board had already removed him as chair in tandem with Altman’s firing. And three senior researchers have already followed Altman out the door in protest, according to The Information. In addition, a planned sale of OpenAI employee shares that would value the company at $86 billion now appears uncertain, The Information reports.
One seismic question still needs to be answered: What exactly did Altman lie to the board about? The answer to that question will determine the trajectory of Altman’s career moving forward, as well as his ability to raise money and attract talent for future ventures.
But the departure of Altman and his loyalists represents a schism at the most important AI company in the world. The immediate effect is that the once-indomitable OpenAI now seems mortal.
The end of the Altman era may be a blip for OpenAI but its ability to operate at full force, attract the best talent in the industry, and keep innovating is immediately in doubt. It may also have the immediate effect of leveling the playing field for competitors.
One such competitor is Anthropic, which itself is the product of a past schism at OpenAI. Anthropic started after former head of safety Dario Amodei left OpenAI 2020 (more than a dozen researchers followed him out the door). The break was reportedly due to philosophical disagreements about the direction and mission of the company after Microsoft’s initial investment. Anthropic, best known for its chatbot Claude, recently got $4 billion in investment from Amazon and another $2 billion from Google. And then there are other competitors, some of them lesser-known (Quora, Hugging Face) and some of them Big Tech behemoths (Meta, Google). Regardless of company size, Silicon Valley firms are champing at the bit to cash in on the AI fervor.
If Altman stays a well-respected member of the tech community, it’ll all but guarantee that his next venture is an immediate player in the industry.
OpenAI might have the most recognizable consumer-grade AI products, but its once-comfortable position as the most influential company in AI is gone. It’s open season for rivals.
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