post<\/a>\u00a0as \u201cone of the best founders of his generation\u201d who \u201chas made an immense contribution to our industry.\u201d<\/p>\nSilicon Valley reacts to OpenAI<\/h2>\n
Matt Schlicht, the CEO of the startup Octane AI, told CNBC that Altman and Brockman, who was formerly the chief technology office of Stripe, \u201cmade a technology available that we\u2019d only ever dreamed about\u201d and called it \u201cthe most exciting and powerful development of our lifetime.\u201d<\/p>\n
Octane is one of many new startups using the so-called large language models that OpenAI packages under its GPT family of software tools. Schlicht said the technology has so far \u201cenabled us to put human-level intelligence inside of our code, and because of that we have helped entrepreneurs generate over half a billion in revenue.\u201d<\/p>\n
\u201cI\u2019ve known both Sam and Greg for over a decade, they are incredible and inspiring leaders,\u201d Schlicht said. \u201cAfter hearing about their untimely departure I was immediately filled with sadness. Innovation in the world was suddenly halted.\u201d<\/p>\n
Ryan Jannsen, CEO of Zenlytic, shared Schlicht\u2019s sentiment.<\/p>\n
\u201cThe AI community is reeling,\u201d Jannsen said, adding that technologists are confused about the circumstances related to Altman\u2019s firing and what it means for OpenAI going forward.<\/p>\n
\u201cSam and OpenAI were the catalyst that showed the world what AI tech is capable of,\u201d Jannsen said. \u201cA huge amount of the excitement and activity in AI today is very directly thanks to their pioneering work.\u201d<\/p>\n
Whether or not Altman returns, the turmoil at OpenAI could give rivals an advantage in what\u2019s quickly become a highly competitive market for advanced LLMs. From heavily funded startups like Anthropic and Cohere to cloud computing giants Google and\u00a0Amazon, companies will likely be \u201clooking for the next best alternative,\u201d given the perceived instability at OpenAI, said industry analyst Patrick Moorhead.<\/p>\n
\u201cThey\u2019re not the only game in town,\u201d Moorhead said.<\/p>\n
Josh Wolfe, a partner at venture firm Lux Capital, said OpenAI is taking a huge reputational hit at a time when companies are deciding what models they\u2019re going to use as building blocks.<\/p>\n
\u201cThere was a perception of steady, predictable, reliable reputable progress and engagement and communication with industry,\u201d Wolfe said. \u201cThe surprise capriciousness of the move signals total unpredictability, which is terrible for companies making plans to work with or trust OpenAI.\u201d<\/p>\n
OpenAI\u2019s unusual structure<\/h2>\n
A big part of the challenge in understanding OpenAI is its\u00a0unusual company structure. The board of OpenAI oversees the nonprofit, of which the corporate entity is a part, and \u201cacts as the overall governing body for all OpenAI activities,\u201d according to the blog post announcing Altman\u2019s ouster.<\/p>\n
The post said that a \u201cdeliberative review process by the board\u201d concluded that Altman \u201cwas not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities.\u201d\u00a0<\/p>\n
Silicon Valley\u2019s high-profile startup CEO firings typically involve wrongdoing, rather than just philosophical differences about where the company is headed.<\/p>\n
Several investors told CNBC that OpenAI\u2019s hybrid model presented a red flag from the beginning, in part because incentives can too easily be misaligned. Now, they said, the company risks severe brain drain if top talent chooses to follow Altman to his next project or a competitor in the industry.<\/p>\n
Altman, meanwhile, has the advantage of having made such a name for himself that he\u2019d have no problem raising money for a new project from investors who view him as the next great tech luminary.<\/p>\n
\u201cSam Altman is a hero of mine,\u201d former Google CEO and investor Eric Schmidt said in an X\u00a0post<\/a>. \u201cHe built a company from nothing to $90 Billion in value, and changed our collective world forever. I can\u2019t wait to see what he does next. I, and billions of people, will benefit from his future work- it\u2019s going to be simply incredible.\u201d<\/p>\nAirbnb\u2019s Chesky wrote that he\u2019d spoken with Altman and Brockman and that they have his \u201cfull support.\u201d<\/p>\n
\u201cI\u2019m saddened by what\u2019s transpired,\u201d Chesky wrote. \u201cThey, and the rest of the OpenAI team, deserve better. He added in a separate post that Altman is \u201cone of the best founders of his generation.\u201d<\/p>\n
As for Microsoft, whose CEO Satya Nadella was reportedly caught off guard by the shakeup, several venture capitalists were surprised that the company could be so unaware of what was brewing given the billions they\u2019ve\u00a0invested\u00a0in the company.<\/p>\n
\u201cI imagine Microsoft might ask for a board seat next time they decide to plow $15 billion into a startup,\u201d said Zachary Lipton, a Carnegie Mellon University professor of machine learning and operations research.<\/p>\n
Industry analyst Moorhead said Microsoft could \u201cfigure out how to buy this company and how to put Sam in charge.\u201d<\/p>\n
\u201cThat\u2019s the first play, it\u2019s potentially finding ways to remove the current board of directors, reinstall new board of directors and then bring Sam and company back in \u2014 making sure the band stays together,\u201d Moorhead said.<\/p>\n
Regardless of the current chaos, Carnegie Mellon\u2019s Lipton said he expects investors to remain bullish on AI.<\/p>\n
\u201cThis story has elements of corporate and ideological discord, but not even a whiff of diminished promise,\u201d Lipton said.<\/p>\n<\/div>\n
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