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What Sam Altman’s Homecoming Means for OpenAI

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“We are so back,” posted Greg Brockman, cofounder and chairman of OpenAI, last Wednesday, right before Thanksgiving.

Brockman’s post on X (formerly Twitter) was referring, of course, to the five-day boardroom drama between OpenAI and Sam Altman, the company’s CEO, that saw Altman fired and Brockman resigning in solidarity.

So, in today’s Market 360, let’s dive into the details of the near week-long drama… and what it means for OpenAI’s future. I’ll also explain what the acceleration in AI means for investors.

To start at the beginning, OpenAI’s boardroom spat was apparently due to apprehension about how quickly AI was being implemented at the company. (Interestingly, all this occurred just shy of one year after the launch of ChatGPT.)

Reports from Reuters and The Information suggest that OpenAI had made a major breakthrough in its core technology. A new AI model called Q* (pronounced “q star”) was demonstrated internally. According to those reports, it can solve simple math problems, and could be a step toward creating artificial general intelligence (AGI).

The power of Q* allegedly created mixed feelings among OpenAI’s board. While Altman was excited about the economic prospects of this new AI, the board worried he was moving too quickly.

So, the board acted, and thus the five-day saga began.

Let’s break it down…

Friday, November 17

The OpenAI Board of Directors suddenly – and shockingly – fired CEO Sam Altman in a move that no one saw coming. The board said that Altman “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.”

Saturday, November 18

Multiple OpenAI execs, including Brockman, announced their resignations. The C-suite at Microsoft Corporation (MSFT), OpenAI’s biggest investor and supporter, were reportedly furious. They negotiated to reinstate Altman as CEO. OpenAI’s executive team assisted with these efforts.

Sunday, November 19

The efforts looked like they were going to work… until OpenAI’s board again shocked everyone by announcing former Twitch CEO Emmett Shear as the interim CEO of OpenAI.

Monday, November 20

Microsoft responded by hiring Altman and other OpenAI execs to lead a new advanced AI research team at Microsoft.

About 700 of OpenAI’s 770 employees signed a letter to the board, essentially calling for their resignation. Otherwise, they would leave to join Altman at Microsoft.

Tuesday, November 21

OpenAI released a statement that it had reached “a deal in principle” for Altman to return as the company’s CEO.

Wednesday, November 22

In an ultimate twist – and bringing the saga to its (for now) finale – Sam Altman returned to OpenAI. Greg Brockman, of course, also returned to the company.

So, the prodigal son had come home… and just in time for the holidays.

On X, Altman posted that he was “looking forward” to his return to OpenAI and building a “strong partnership” with Microsoft. You can read the full tweet below.

While the boardroom drama reached an end last week, the headlines have not. In fact, The Verge released an interview with Altman just last night. When asked what he learned from the ordeal, Altman replied:

I learned that the company can truly function without me, and that’s a very nice thing.

I selfishly feel good because either I picked great leaders, or I mentored them well. It’s very nice to feel like the company will be totally fine without me, and the team is ready and has leveled up.

While Altman feels secure in the team that he’s built, the reality is that he’s back on it.

So, what does this mean for both Altman and OpenAI going forward?

In Altman’s favor, OpenAI’s boardroom has changed. Two new board members have replaced the previous leadership that kicked Altman out. They are former Treasury Secretary Larry Summers and Bret Taylor, a former co-CEO of Salesforce. This smaller, transitory board is set to vet other new potential members and expand to nine people, eventually resetting OpenAI’s leadership. Microsoft, which owns 49% of OpenAI, plans to take a non-voting board seat as well.

So, Altman will now lead a new board that is more supportive of his vision to more quickly roll out and commercialize AI tools. This might change the very nature of OpenAI.

Until now, OpenAI was a for-profit company under the control of a nonprofit parent organization. Through this saga, it has become clear that the nonprofit parent organization was “holding back” the for-profit firm from rapidly growing new products and services.

Well, those nonprofit shackles have been broken… and the stage is now set for a major for-profit push of next-gen AI in the coming months.

With Q* on the horizon, it seems that truly powerful AI is a lot closer than anyone thinks, and that AI tech is progressing a lot faster than anyone thought possible.

So, it’s a good thing the OpenAI team has “leveled up.” And that Altman is back at the wheel.

AI Advancements Can Make or Break Your Portfolio

The recent developments at OpenAI are certainly an indication that AI is growing more and more advanced.

We’re already watching AI transform sales, marketing, customer service, transportation, healthcare… even the law. For example, the last time ChatGPT took the bar exam, it did better than 90% of human lawyers taking the same test. It has also passed the medical licensing exam… Wharton’s MBA exam… and the SATs – with a score good enough for the Ivy League colleges.

Now more companies are incorporating AI into their businesses, and as new businesses grow, they have to destroy the old companies. This creates a massive driver of wealth inequality. This massive divide, or “chasm,” is taking over every aspect of our lives. I call this the “Technochasm.” Essentially, technology makes some people a lot richer and that makes our world easier to live in, while at the same time sidelining those who fail to keep up.

This “Technochasm” phenomenon has dominated markets and controlled the direction of wealth in America for years. But now AI is adding fuel to the fire.

As this divide widens, you want to make sure that you’re on the right side. I want to help investors take the proper steps to land on the right side of that divide, so I recently published a special report – Scalability Titans: Six Must-Own AI Stocks to BUY Now – that covers six AI investments that could help put you on the right side of this “Technochasm.”

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Sincerely,

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Louis Navellier

P.S. There is an invisible force that can turn ordinary Americans into multimillionaires – even billionaires.

Yet few Americans even realize “it” exists. Fewer still learn how to harness it to make money.

The rich are using it to get richer, while millions of Americans fall behind.

We’ve put together this presentation to make sure you stay on the right side of the wealth divide.

Click here to learn more.

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Microsoft Corporation (MSFT)


Article printed from InvestorPlace Media, https://investorplace.com/market360/2023/12/what-sam-altman-homecoming-means-for-openai/.

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