With Sam Altman out, where does OpenAI go from here?
Altman was cut from the classic Silicon Valley cloth. In that sense, OpenAI's leadership was an anomaly in AI.
I wasn’t planning on publishing today, but, surprise! OpenAI’s board has dismissed Sam Altman.
There were certainly a lot of questions swirling around OpenAI for the past several months. Did Altman really have the experience needed to build OpenAI into a titan? How would it get its costs under control while simultaneously slashing costs for developers? Was OpenAI a consumer company, an enterprise company, or both? And how would it inevitably manage its complex relationship with its largest backer, Microsoft?
But even with all of those questions, the one constant of this story so far is that no one knows exactly what happened. I’ve spent the last few hours messaging dozens of people and each reaction is roughly the same: shock, surprise, and confusion.
What it suggests to me is that the decision here seemed to be constrained to a very small group of people. And OpenAI’s short statement about the reasoning behind his departure is so vague that you could fly an Airbus A380 through the lines there:
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 no longer has confidence in his ability to continue leading OpenAI.
Altman’s dismissal is certainly a shock to the world in AI, and I suspect it’ll take some time before we learn fully what triggered his departure.
But while Altman has become a larger-than-life figure in AI, Altman has always been a part of the broader Silicon Valley ethos dating well prior to the 2010 mobile boom that altered the trajectory of the Bay Area—and San Francisco. And his development arc that led him to be the CEO of OpenAI follows such a classic Silicon Valley pathway it’s practically the 101 between Mountain View and San Francisco.
Even recently, despite the challenges San Francisco has faced following COVID, OpenAI under Altman has remained a distinctly San Francisco company. The company just a few weeks ago leased two buildings from Uber in Mission Bay—building out an office footprint of nearly 500,000 square feet. It’s moves like OpenAI’s (and other firms) that have led many to consider San Francisco the epicenter of AI and slapped the name “Cerebral Valley” on the Hayes Valley neighborhood in the central part of the city.
It feels like that is what makes this change such a stunning and important one—for the obvious reasons for OpenAI, and all the subtext behind it. OpenAI was the harbinger of the AI revolution that would spark the Cerebral Valley revolution. It was also a classic, massively funded startup that burned capital for growth at all costs run by a former founder deeply entrenched in the Silicon Valley startup community.
Ironically, the announcement of Altman’s departure comes just a day after San Francisco mayor London Breed introduced him on a panel at the Asia-Pacific Economic Cooperation conference in the city this week. This is the same conference that Breed and many others hoped would mark a turning point for San Francisco, showing the world that it had become an epicenter for AI and would rebound from several years of struggling.
But when you look at current the crop of AI startups—the ones that have granted San Francisco the title of Cerebral Valley—the background of many of these companies looks very different than Altman. Altman, as a leader of the largest model provider in the world, is an anomaly. He’s an archetype of an early Silicon Valley founder and executive, and is practically a permanent fixture in the Bay Area.
Like many of those archetypes, Altman also effectively became an ambassador for AI both domestically and internationally. It’s not so dissimilar to when Mark Zuckerberg, thrust onto the public stage following the scandal of Cambridge Analytica, became the de-facto interstitial figure between what was happening in Silicon Valley and the broader decisively non-tech community that it impacted at a massive scale.
And while we wait for the full story to emerge for what happened, perhaps understanding the history here is the best place to get started. Not just to get an idea of what happened to Altman and OpenAI, but to see where the startups in the industry go from here without OpenAI’s classic Silicon Valley CEO.
An ambitious double-popped collar
Altman’s first venture was essentially a Foursquare competitor called Loopt, which came out of Y Combinator in 2005—the same class that included Reddit, its co-founders Steve Huffman and Alexis Ohanian, as well as Twitch co-founders Justin Kan and Emmett Shear’s first startup Kiko.
Loopt served as the on-ramp to Altman’s path as a Silicon Valley Disruptor with hopes to alter the trajectory of humanity. But, like most startups, it didn’t reach the crescendo that companies like Facebook or Google reached—or even its primary competitor, Foursquare, which has since become dramatically less relevant in broader culture.
Perhaps the most ridiculous meme that’s followed him as a distillation of the Silicon Valley vibe from that era is his appearance at Apple’s WWDC in 2008, rolling in wearing a red polo on top of a green one with the collars stacked on top of each other. Yes, this is the same CEO that would go on to run OpenAI through the launch of GPT-4, DALL-E 2, and its most-recent tools.
Loopt had raised $5 million in a series A from Sequoia Capital and New Enterprise Associates. Both firms would go on to become permanent fixtures in the Valley—with Sequoia in particular joining OpenAI’s cap table in a share sale earlier this year. Both firms followed up in a second round that brought Loopt’s funding up to a total of $17 million. Sequoia, in particular, would become known for investments like WhatsApp, Snowflake, Airbnb, Instacart, DoorDash, Zoom, Stripe, and Hugging Face.