How The Shakeup At OpenAI Will Affect the AI Landscape

Where Sam Altman Ends Up is a Factor in the Future of AI

Sam Altman leaving OpenAI and the ensuing chaos has dominated AGI recently. As the leading provider of generative AI technology, it is valuable to reflect on how the leadership shakeup at OpenAI and subsequent moves by Microsoft and others will impact the future of AI generally.  

At a high level, if Sam Altman joins MicroSoft, this will change the long-term landscape in the AI world, likely reducing the chance that OpenAI maintains its market dominance.  This might be a letdown to companies who have already immersed themselves in OpenAI products. Over the longer term, this move would shake up the rapidly growing AI market and open many opportunities for OpenAI’s competitors.

Some Background

First, OpenAI started in 2015 as a research project funded by Elon Musk, Peter Thiel, Sam Altman, Reid Hoffman, and Ilya Sutskever, among others.  The official mission of OpenAI is to research and build AGI (Artificial General Intelligence) that broadly benefits humanity.  The commercial entity is owned by a non-profit.  This structure was designed to ensure that the “benefit to humanity” mission was maintained. 

Second, there are two camps in the AI world - those who believe AI is generally safe and beneficial, and those who have deep concerns that AI poses dangers up to and including extinction level threats (see article dated 10/31/23).  These divergent viewpoints are at the heart of the drama at OpenAI.   

Third, the tech industry has many personality cults (see article dated 11/17/23).  Many (perhaps Sam himself more than others) believe that Sam Altman (OpenAI CEO until Friday) is the next Steve Jobs - a bold leader who will change the world with technology.   Ilya Sutskever is an OpenAI cofounder and current board member.  Ilya was part of the board that ousted Altman on Friday.  Ilya is a leading figure in the camp that believes in the inherent danger in AI.  He was mentored by Greg Hinton, a leading AI researcher who quit Google over concerns about AI safety.  Sutskever, Hinton, and Eliezer Yudkowsky are prominent voices arguing for greater AI safeguards.

The Explosion

These philosophical differences exploded on Friday, with Sutskever and other board members ousting Sam Altman.   Over a dramatic weekend, Altman tried to return, but then joined a new AI division of Microsoft. Now there are rumors that he is still in talks with OpenAI.  In the wake of this issue, hundreds of OpenAI engineers have threatened to quit and join Altman at his new organization. Additionally, OpenAI was about to launch a $86 billion share sale.  This is in jeopardy following recent events.

The Fallout

The loss of key engineering talent and leadership, and the disruption of funding if Sam Altman joins Microsoft poses a longer term challenge to ChatGPT and the AI industry in general.  From my perspective, OpenAI will lose its dominant position as it struggles to regain focus and capabilities.  This will create opportunities for other companies such as Anthropic—who just launched Claude 2.1, AWS, Meta and perhaps other startups to gain traction.  If Altman joins Microsoft, it will likely be the big winner from all of this. For starters Microsoft would be gaining a prominent AI leader and possibly many OpenAI engineers.  If that happens expect that in coming years Microsoft will reduce their partnership with OpenAI as they gain considerable internal capabilities. This transition may have happened anyway, but these events will accelerate that internal growth.

In the longer term, we will see more options in the market and less hegemony from OpenAI if Altman leaves.  This also bodes well for AWS, who is racing to compete with Microsoft.  The complexity and cost to operate an LLM system favor a small number of companies dominating the market.  A weaker OpenAI will result in slowed evolution and expansion of ChatGPT.  Unfortunately I think this will be a net negative on the AI industry. I predict that if Altman joins Microsoft they will move quickly to build a strong competitor, but it will likely take at least year or longer to bring that to market.