The unexpected termination of Sam Altman, the co-founder and CEO of OpenAI, bears resemblance to a historical event in the computer industry that occurred about forty years ago. This event refers to the removal of Steve Jobs from the Apple board by the board members at that time.
After a period of time, Jobs was eventually reinstated, and the subsequent events that unfolded have been widely recognized and documented.
The departure of co-founders Sam Altman and Greg Brockman has generated renewed attention on founder rights, board composition, the future of artificial intelligence, and the prospects of startups leveraging OpenAI. However, the specific factors that led to their departure remain uncertain, adding to the existing ambiguity surrounding this issue. Consequently, it is difficult to determine the subsequent actions that Altman and Brockman will undertake.
The alignment between the founder and the board members
According to Harshil Mathur, the founder and CEO of Razorpay, a fintech unicorn, the current lack of sufficient facts notwithstanding, the entire incident serves as a poignant reminder for entrepreneurs to maintain alignment with their boards.
Razorpay has garnered investment from Y Combinator during its first stages. Prior to redirecting his attention towards OpenAI, Altman served as the President of Y Combinator.
Mayank Kumar, the CEO of UpGrad, an edtech unicorn, also emphasized the importance of enhanced communication and transparency between the board and founders.
Moreover, throughout the process of formulating board rights, it is imperative for the founder to thoroughly consider all potential exceptional scenarios. According to the speaker, founders occasionally utilize the template provided in the shareholders’ agreement (SHA), which can potentially have adverse consequences for them.
According to Arvind Parthiban, the founder and CEO of SuperOps.ai, a Software-as-a-Service (SaaS) firm, the removal of Altman from his position gives rise to numerous inquiries and apprehensions.
The reasons for the expulsion are not clearly defined. The individual explicated that the comment implies the existence of communication challenges between the board and the CEO, prompting doubts regarding potential concerns and undisclosed information.
Manish Maheshwari, the previous head of Twitter India and a co-founder of the AI firm Fanory.ai, expressed that Altman’s termination has generated significant discourse around the issue of transparency in the context of leadership transitions. The removal of a prominent individual has raised questions over the stated reasons for their dismissal, particularly the claim of lacking consistency in communication, as mentioned in a post on platform X.
Gaurav Munjal, the founder of Unacademy, expressed his fondness for Sam through a tweet.
The founder of BharatPe, Ashneer Grover, who has been engaged in a prolonged dispute with his former board and investors for more than a year, drew a parallel between Altman’s situation and his own, as well as with other ousted founders such as Adam Neumann of WeWork and Travis Kalanick of Uber.
According to Mohan Kumar, a representative from Avataar Ventures, there appears to be a conflict arising from the tension between the principles of openness and inclusivity on one hand, and Sam’s capitalist approach on the other, which seeks to include regulatory bodies in governing artificial intelligence.
Entrepreneurs should use caution
According to Thiyagarajan Maruthavanan, the Chief Executive Officer of Upekkha, an accelerator specializing in providing mentorship and training to Software-as-a-Service (SaaS) startups, entrepreneurs would exercise greater caution in their selection process for board members.
Entrepreneurs will exercise greater caution while assembling their boards of directors. Regarding the individuals they choose to include and the expertise they possess,” he stated.
The board of Open AI is composed of Altman, who serves as the chairman, as well as president Greg Brockman and chief scientist Ilya Sutskever.
The group also comprised of three individuals who were not officially employed by OpenAI. These individuals were Adam D’Angelo, the co-founder and CEO of Quora; Tasha McCauley, an American robotics engineer and scientist, who previously held the position of chief at the Israeli startup GeoSim Systems; and Helen Toner, the director of strategy and foundational research grants at Georgetown’s Center for Security and Emerging Technology (CSET).
“The noteworthy aspect is that, in contrast to Uber’s former CEO Travis Kalanick, one cannot resort to the facile approach of attributing blame solely to venture capitalists,” remarked an Indian venture capitalist.
OpenAI initially operated as a non-profit entity, but then established a hybrid “capped-profit” corporation model, enabling it to secure external funding while ensuring continued support for its original non-profit activities. To date, the company has secured a substantial sum of $10 billion from Microsoft, with an impressive valuation of about $30 billion. This financial infusion is being utilized to strategically enhance its computing capacity through investments.
Nevertheless, the organizational structure of OpenAI is designed in a manner where the non-profit entity possesses ownership and control over a subsidiary that successfully secured substantial investment from Microsoft. Consequently, this arrangement prevents the technology giant from exerting influence over the decision-making processes within the AI unicorn’s boardroom. As per its official charter, the primary recipient of benefits from the organization in question is “humanity” rather than investors.
Altman did not possess any equity or voting rights in OpenAI, so rendering the board capable of terminating his employment without prior warning.
In contrast, it is noteworthy that Mark Zuckerberg, the creator of Meta, exercises control over more than 60 percent of the voting power, although possessing a stake of less than 15 percent in the company. This significant influence is attributed to the unequal voting structure employed by the corporation. Several years ago, Indian entrepreneurs, including Bhavish Aggarwal of Ola, implemented measures to enhance their rights in relation to their investors.
The question of the direction in which progress is heading remains uncertain.
Mathur suggested that the departure of Altman will inevitably impede the advancement of artificial intelligence (AI).
The infectious and irreplaceable qualities of Sam’s passion, enthusiasm, and quickness are evident in their operational approach. This event might be considered as the termination of employment that characterizes the current generation, as stated by the individual.
The termination of Sam Altman from his leadership position at OpenAI carries significant implications for numerous firms globally who have developed products utilizing the extensive language models of ChatGPT, the organization’s creator.
Altman was terminated from his position inside the organization on November 17th, subsequent to the board expressing their lack of faith in his capacity to properly guide the corporation. According to a blog post published on OpenAI’s official website, it was stated that a review undertaken revealed a lack of consistent candor in the individual’s contact with the board. Mira Murati, the individual holding the position of chief technology officer within the organization, has been appointed as the interim chief executive officer.
Feeling caught off guard regarding future prospects
The sudden removal of a highly influential technology creator has raised apprehensions among founders who are developing applications utilizing OpenAI models.
During periods of significant upheaval, such as the current situation, it is common for a leadership vacuum to emerge. Numerous entities were engaged in constructing upon or in conjunction with OpenAI. Maruthavanan also stated that there may now exist uncertainties over the matter.
The author posits that individuals such as Satya Nadella, who serves as the executive chairman and CEO of Microsoft and is a prominent supporter of OpenAI, together with Murati, would be required to assume a more proactive role in assuaging the concerns of developers who rely on OpenAI models.
Furthermore, Maruthavanan expressed concern that users may potentially migrate to alternative platforms.
According to Vishal Virani, the co-founder and CEO of DhiWise, the future trajectory of OpenAI is significantly influenced by the strategic course chosen by its newly appointed leadership.
Currently, it appears advisable to adopt a cautious and observant stance, prioritizing our ability to manage and adjust to circumstances rather than engaging in conjecture regarding the future actions of OpenAI. According to Virani, we are currently situated in a period characterized by uncertainty, where the ability to adapt and demonstrate resilience are crucial factors.
KissanAI, a startup headquartered in San Francisco, utilizes OpenAI in certain aspects of its architectural framework to develop a multilingual AI chatbot designed specifically for farmers.
Given our utilization of Azure, we can confidently assert that we possess the necessary resilience to withstand any potential disruptions. According to Pratik Desai, the founder of KissanAI, the development of our own farm models is being pursued simultaneously as a precautionary measure in the event of a similar occurrence in the future.
The pace of technological growth at OpenAI is comparatively slower.
There is a widespread belief that Altman’s departure holds significant importance and is expected to have implications for the rate of progress in the field of artificial intelligence.
Desai commented that while they lack knowledge regarding the specific changes occurring at OpenAI, if Sam’s termination was indeed due to the prioritization of accelerated development and a subsequent shift towards increased emphasis on research, it is conceivable that the pace of progress may decelerate.
Regrettably, from an industrial standpoint, the aforementioned development will impede the realization of the grand vision and result in a significant setback in the advancement of artificial general intelligence (AGI) over an extended period of time. According to Kava, co-founder of AI SaaS startup VideoSDK, the maturity of the decision makers in their vision of Open AI significantly influences the future of AGI.
According to Abhimanyu Saxena, a co-founder of the educational technology company Scaler, it is anticipated that this event would significantly influence the trajectory of technology. Saxena further asserts that Altman is expected to introduce noteworthy advancements in the near future.
The individual in question possesses a comprehensive understanding of the task at hand, and it is not unusual for the board to get misaligned when dealing with nascent technologies of this nature. The speaker expressed confidence in the likelihood of intriguing results in the near future.
