OpenAI

Background 

OpenAI, the $86B research lab that created the generative AI chatbot ChatGPT, is generally considered the most influential company at the forefront of the artificial intelligence boom. Its goal—to develop “highly autonomous systems that outperform humans at most economically valuable work.”

Led by CEO Sam Altman, OpenAI burst into the public consciousness in late 2022 with the release of ChatGPT, which by February 2023 had become the fastest-growing consumer app in history with a reported 100 million monthly active users.

Before OpenAI, Altman dropped out of Stanford to found Loopt, a social networking service, and later served as president of the startup accelerator Y Combinator. Read more about Altman’s vision here.

Genesis and Early Years (2015-22)

OpenAI was conceived over dinner by tech leaders at a Silicon Valley hotel roughly a decade ago (listen to a deep dive here). Altman convened the gathering with a guest list including Elon Musk, Peter Thiel, LinkedIn cofounder Reid Hoffman, and others. 

The topic under discussion—countering Google in the race to achieve systems with human-level cognition (termed artificial general intelligence). The group initially committed a reported $1B to launch the effort.

The period between OpenAI’s launch as a nonprofit in 2015 and mainstream awareness of it in 2022 found the company working on what seemed, in hindsight, like novelties. For example, it trained its AI bots to beat top players in popular video games.

Musk ended his affiliation with the company in 2018 (see background), leaving OpenAI in need of supporting funds to cover things like the rapidly increasing computing costs needed to train large models. In response, the company adopted a somewhat unique structure, with the original nonprofit overseeing its for-profit arm. 

ChatGPT and Upheaval 

The public release of ChatGPT in late 2022—with its unprecedented ability to return human-like answers for virtually any query—created shockwaves across the technology sector and the broader public. Tech heavyweights like Google and Microsoft realized they’d fallen behind in the AI race, and OpenAI’s leadership expressed surprise at ChatGPT’s popularity.

The pace of advancement stoked fears in the nonprofit board members over AI’s growing power and potential unforeseen consequences. In late 2023, one of the most dramatic corporate clashes in Silicon Valley history played out, with the board abruptly booting Altman without full explanation. 

In a dizzying four-day span, Altman was fired, the company gained and lost a temporary CEO, hundreds of employees pledged to quit, and Altman went to Microsoft before returning. See a timeline here.

A full accounting for his firing was never disclosed, though observers partly attribute it to the conflict between the nonprofit board’s idealist goals (reportedly rooted in effective altruism philosophy) and Altman’s vision for artificial general intelligence.  

Present and Future

Altman “won” the battle for control of AI, continuing as CEO and reconstituting the board. 

Following the tumult, the company has returned to rapidly advancing its flagship ChatGPT app (try it here) while expanding consumer use. It has also released or is developing new versions of text-to-image (DALL-E), text-to-video (the hyperrealistic Sora), and voice cloning (which had its release delayed over concerns of misuse).

The company has also focused on ramping up the computing power needed for next-generation models, working on a supercomputing data center with Microsoft, and has launched its version of the App Store, terming the equivalent of “apps” as “GPT Agents.” 

Meanwhile, OpenAI faces mounting regulatory constraints and lawsuits, in particular from media companies who say the company violated copyright law in using their content to train its large language models.