Sama Gets the Hamma

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Happy Tuesday, folks.

So… some stuff happened/is happening in the world of AI right now…

Anytime there is a big change in leadership at a prominent company, stories are sure to follow, but given just how central OpenAI is to the entire future startup landscape, the ousting of Sama warrants a Premium tier breakdown, and because this one is so timely, I decided to un-gate this one. Happy Whatever Your Choice of Holiday is!

In fact, it’s a bit like my Premium newsletter which goes in-depth on specific topics that are going to be particularly impactful, such as new laws/regulations, announcements, merger, etc.

There are a bunch of new faces, so it you enjoy this post and want to continue to get in-depth breakdowns on particularly impactful news, such as laws/regulations, product announcements, mergers, etc. once every other week, upgrade now to join the club!

What in the Wambsgans?

In what is sure to be the next hot movie rights contract to be bid upon by streamers near and far, Sam Altman's abrupt exit (and potential return, which was then overturned, which was then made possible again, which then…) from OpenAI has sent ripples through the tech community.

In fact, the CEO at 8 Sleep (Tempur-Pedic but with a diet of only In-N-Out and quinoa) actually posted that there was a 27% increase in the number of people in SF getting fewer than 5 hours of sleep…

While the weekend drama itself could be, and has widely been, compared to any number of popular HBO shows, beneath the carefully-written script is a powerful story on the importance of corporate alignment and the fierce battle raging over the pace of AI innovation, one which will shape the AI roadmap for the next generation of startups.

So, what actually happened?

I don’t know.

Honestly, nobody outside the OpenAI Board really knows.

In a 4-2 decision, key board members voted to oust CEO Sam Altman. The board cited a breakdown in communication, but the aftermath was a rollercoaster of resignations, rumored returns, and corporate intrigue, an “on and off again” relationship as hot and cold as Kourtney Kardashian and Scott Disick’s.

Between an entire rainbow’s worth of colored heart emojis being sent back and forth, there were various rumors that Sam would be returning before Twitch CEO Emmett Shear was named the new interim CEO (CTO Mira Murati was named the first one). Now, he’s saying he will resign if the Board doesn’t provide evidence for why they fired Sam…

Conversations about Sam’s return as CEO have been starting and stopping like a driver’s ed course, and most recently, Microsoft CEO Satya Nadella (who was absolutely livid about the blindsided move given the giant’s $10 billion investment in OpenAI, which was apparently still not enough to get the team to use Teams over Meet lol) hired both Sam and Greg to come work on AI to prevent a cliff dive by $MSFT, ensuring that at least the public company wouldn’t suffer the value loss of the man with arguably the single largest personal market cap in the world outside of maybe Elon.

Pretty much the only thing that everyone can agree on is that the ousting was arguably the biggest destruction of corporate value in a single move since Apple making Steve Jobs walk the plank.

Why was such a questionable move was made? Well, the rumors (in order of least to most likely) are:

• Childhood Abuse Allegations Against Sam Altman (<1%): Long-standing rumors suggest misconduct in Altman's past. However, the lack of emerging evidence makes this unlikely.

• Microsoft Data Breach Under Sam's Watch (5%): It's speculated that a leak of sensitive Microsoft data occurred, and Sam proceeded with a risky rollout. This theory gains some credibility from Microsoft's recent internal ban on adoption of ChatGPT, but the promotion of CTO Mira Murati to interim CEO counters it, especially if she raised concerns about the breach that Sam overlooked.

• They achieved AGI (10%): A theory posits that OpenAI achieved AGI, alarming some, including Ilya Sutskever who might have had his Frankenstein moment. However, Ilya's subsequent support for Sam's return casts doubt on this.

• Adam D’Angelo, founder of Poe (40%): D'Angelo, surprised by the GPT Store announcement, which threatened his Poe project, might have pushed for Sam's exit. Recent negotiations seem to align with this theory.

• Internal Conflict Over AI Development Pace (45%): The most probable reason appears to be a disagreement about the speed and direction of AI development under Sam, particularly his push to commercialize ChatGPT. The board, committed to using AI for the greater good, might have seen this as a deviation from OpenAI's mission. Shear’s appointment supports this given he has famously stated that he thinks we should take the pace of innovation from the current pace of 10 to a 1 or 2.

Regardless of whether it is really the true catalyst for smacking themselves in the face with a shovel of angry investors and employees, the core issue seems to be the ideological clash over AI's rapid commercialization versus its safe development.

The conflict over effective acceleration, unleashing AI's transformative power on the world, driven by the belief that delaying its benefits is unethical, versus safe technological development, mostly spewed by people who watched Smart House one too many times, has been to Silicon Valley what Mars hoped Right Twix versus Left Twix would be for Middle America.

OpenAI, a frontrunner in AI advancement, is bound by its mission to democratize AI as a universal human right, a mandate rooted in its non-profit status. This commitment necessitates rigorous controls to ensure the responsible deployment of technology.

Sam Altman, a figure known in Silicon Valley for his unrelenting drive, operates with the conviction that he's spearheading a mission to save the world. This fervor often collides with the more restrained philosophy of his organization.

Despite this ideological friction, it's remarkable how much OpenAI has achieved, navigating the constraints imposed by its own guiding principles.

So what comes next?

There will be a trillion dollar company founded around the idea of building AGI. It’s very possible that it’s one of the existing ones, and I genuinely think OpenAI was on that path with Sam, “non profit” and monetization challenges and all.

It could be one of the others, whether Anthropic (side note, another twist in the saga was an inquiry from the OAI Board into a potential merger…) or another of the well-known startups already gaining widespread notoriety.

Or, it could be a new venture led by Sam Altman, alongside Greg and a cadre of researchers ready to defect from OpenAI, armed with abundant capital and a freer corporate structure.

Given this opportunity and freer corporate structures, it might seem obvious that Sam would want to go with this, but there are legitimate reasons for him to keep responding to OpenAI’s “Happy Thanksgiving! Thankful for all of the memories we shared. Tell your Mom I said hi” cider-inspired texts.

But returning to OpenAI isn't off the table. Despite the upheaval, Sam's identity is deeply intertwined with the company. It’s akin to the synonymous association of Bill Gates with Microsoft, Jeff Bezos with Amazon, and Shaq with Papa John’s. Restarting from scratch, even with abundant resources, is a monumental task. Why rebuild when you can refine what already exists?

If he returns, this could be a boon for societal progress. OpenAI's consolidation of AI services, backed by a unified vision and top talent, could continue to drive innovation at an unprecedented pace.

Yet, startups might view this differently. OpenAI's rise has killed many, turning some startups into mere features of its expansive offerings. This trend, likely to accelerate, poses a real threat to smaller players. A shift in power could grant these underdogs the space they need, fostering a diverse and competitive tech landscape.

However, keeping Sam at OpenAI's helm might be the safest bet for the AI ecosystem. His power, balancing his ambition with the Board’s cautious development, aligns with responsible AI growth.

Much like the SVB situation was for founders earlier this year, the situation also highlights another, often overlooked consideration in the operations of a company. Specifically, giving up those Board seats can literally get you kicked out of the very company which you started. Pick and choose your board wisely.

We will see a redistribution of talent. Even if Sam does return, not all of his coworkers will. Some will go to competitors, some will join startups, and some will start their own companies. Regardless, there’s about to be a game of musical chairs for some of the smartest people in the world.

I imagine that by the time I hit send and this email hits your inbox, something new will change requiring me to go and edit the web version before anyone else sees it and sees how off my take was.

But as we wait for the conclusion of the spiciest reality TV season of all time, it’s important to remember that the question isn't just about who leads OpenAI but rather the future direction of AI development as a society. Will it be governed by commercial imperatives or a broader humanistic vision? And where does that leave startups?

We’ll just have to wait and see. No pressure or anything, guys, but how you handle this situation could be the deciding factor between whether we end up in a world where commercialization drives the Rise of the Planet of the GPTs or an enduring era of Eden-like existence. Choose wisely.

Is it written by humans or AI?

If you can guess, I’ll give you a shoutout in the newsletter next week.

Cheers to another day,

Trey