OpenAI CEO Sam Altman’s ouster sends ripples through Silicon Valley: What next?

Sam Altman's departure follows a 'deliberative review process' conducted by OpenAI's board.

In a shock move, ChatGPT owner OpenAI sacked co-founder and chief executive officer Sam Altman on November 17, citing a lack of consistent candour in his communications with the board of the artificial intelligence company.

The board lost confidence in Altman's ability to continue leading OpenAI after it a review process concluded that he was not consistently candid in his communications, hindering its ability to fulfill its responsibilities, the company said in a statement.

Altman acknowledged his departure in a post on X, expressing gratitude for his time at OpenAI and its transformative impact.

Mira Murati, the company's chief technology officer, will serve as interim chief executive until a permanent replacement is named. Altman will also step down from OpenAI's board.

Altman's exit from OpenAI reverberated through Silicon Valley, where the 38-year-old co-founder had become a prominent figure in the field of generative AI.

Generative AI is a form of artificial intelligence that learns from past data. It creates or generates new content which can be a text, an image or a computer code.

Altman played a crucial role in the growth of OpenAI and gained visibility as the public face of the boom in generative AI, especially after the launch of ChatGPT in 2022, which swiftly became one of the world's fastest-growing software applications.

He had been a key executive, advocating for the responsible and safe development of highly sophisticated AI while engaging with governments worldwide. Altman's departure marks a significant shift in the landscape of AI leadership.

Altman, a serial entrepreneur and investor who previously led Y Combinator, served as the prominent face of OpenAI and the popular generative AI technology, touring globally this year.

Also Read: In ousting CEO Sam Altman, ChatGPT loses its best fundraiser

"I loved my time at OpenAI. It was transformative for me personally, and hopefully the world a little bit. Most of all, I loved working with such talented people. Will have more to say about what’s next later," Altman posted on X.

OpenAI has attracted substantial investment, drawing billions of dollars from strategic partners, with Microsoft being a significant contributor. Prominent venture funds, including Sequoia Capital, Andreessen Horowitz, and Thrive Capital led by Josh Kushner, have also invested in the company.

Thrive Capital has reportedly been gearing up to lead a purchase of up to $1 billion in employee stock, valuing OpenAI at $86 billion, the London-based Financial Times reported. These financial commitments highlight the significant support and valuation OpenAI has garnered from key players in the tech and investment sectors.

Former Google CEO Eric Schmidt praised Altman, calling him "a hero of mine." "He built a company from nothing to $90 Billion in value, and changed our collective world forever. I can't wait to see what he does next. I, and billions of people, will benefit from his future work — it's going to be simply incredible," he posted on X.

The repercussions of the unexpected developments at OpenAI are not clear yet, however, there are immediate concerns about its fundraising prospects. Altman was regarded as a skilled fundraiser who successfully negotiated billions of dollars in investments from Microsoft. He also played a key role in leading the company's tender offer transactions this year, contributing to the huge increase in OpenAI's valuation from $29 billion to over $80 billion.

His influence extended to attracting top AI engineering talent in a fiercely competitive tech market. He successfully recruited professionals from major tech giants like Google and Microsoft, offering competitive compensation packages and the promise of involvement in groundbreaking technology at the forefront of world-altering advancements.

Likewise Bill Gates, Steve Jobs, and Mark Zuckerberg, Altman chose to leave college to establish a tech startup. Despite not completing his college education, he managed to accumulate a substantial fortune. His net worth is estimated to be between $500 and $700 million, attributed to his entrepreneurial ventures and astute investments, according to a report in the Street.

The report said the majority of Altman's net worth is connected to his equity ownership in privately held companies, making it challenging to precisely determine his true net worth. The companies he has led, founded, or supported collectively hold a value of around $500 billion, it said.

Some analysts are of the view that Altman's departure, though disruptive, is unlikely to diminish the popularity of generative AI or compromise the competitive advantage of OpenAI and Microsoft.

The innovation generated by OpenAI is greater than any one or two individuals, and there is no reason to believe this would lead OpenAI to relinquish its leadership position, news agency Reuters quoted DA Davidson analyst Gil Luria as saying.

Generative AI, trained on extensive datasets, has the ability to generate entirely new human-like content, assisting users in tasks like composing term papers, finishing science homework, and even crafting entire novels. Following the launch of ChatGPT, regulators hurried to keep pace — the European Union amended its AI Act, and the US initiated efforts to regulate AI.

(With agency inputs)