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Monday, December 4, 2023

How Sam Altman is pushing OpenAI into the ‘Big Tech’ pantheon

Sam Altman paced the stage calm and confident, ready in black jeans and Lego x Adidas sneakers to sell himself as the next Steve Jobs — or at least this year’s Mark Zuckerberg.

The OpenAI founder had gathered about 1,000 software engineers and AI researchers into a former Honda dealership in downtown San Francisco for an event that signaled his company’s ascent into the Silicon Valley pantheon.

Green velvet couches and lush house plants lined the halls. The boba bar was unlimited. Trays of avocado toast on sourdough were constantly replenished. Those who couldn’t score a ticket signed up for “watch parties,” streaming the event with friends. The sense of possibility was palpable.

“This energy is awesome,” Altman said with a grin, as he took the stage.

The tech company keynote was made famous by Jobs, who used it to announce the first iPod, and, years later, the first iPhone. Delivered in a signature black turtleneck, his presentations helped fuel the frenzy around Apple’s iconic devices — his infamous “reality distortion field” that made Apple into one of the most lucrative gatekeepers in business history. Now Altman was using the same playbook to reinforce OpenAI’s dominance.

Launched as a nonprofit in 2015, OpenAI was created in large part to keep advanced artificial intelligence out of the hands of monopolistic corporations. But since accepting a major investment from Microsoft in 2019, the company has transitioned to a novel for-profit structure. OpenAI often says it is still pursuing its original goal of building AI that “benefits all of humanity.” But its path forward lately looks more like business as usual.

In May, the company began a hiring spree, poaching executives from Meta, Apple and Amazon Web Services. Around the same time, Altman zipped around the globe, visiting world leaders and developers in dozens of cities, including Doha, Qatar, and Tel Aviv, one-upping Zuckerberg’s 2017 tour of America. Last month, the company expanded its footprint in San Francisco, subleasing nearly 445,000 square feet of office space from Uber, purchased when then-CEO Travis Kalanick was still the most envied founder in the Valley.

Half an hour into his keynote speech, Altman unveiled a Big Tech power play: OpenAI’s latest upgrades would make it easy to build customizable bots, called GPTs without knowing a lick of code. The company would promote the best options in a proprietary app store and share “a portion of our revenue” with people who build the most useful and popular tools, he said.

Altman didn’t mention it onstage, but if all went to plan, OpenAI’s store would decimate the start-ups built on top of ChatGPT — destroying the dreams of some of the developers sitting in the crowd.

The GPT Store marked OpenAI’s effort to make itself the central hub for generative AI, and, just like Apple, an unavoidable platform for anyone building a business.

Variations on the meme “OpenAI just killed my start-up” flooded X, the social network formerly known as Twitter. The Information, a tech blog, called it OpenAI’s “Extinction Event.”

By opening the store, which is only accessible to those with a ChatGPT Plus subscription, OpenAI captures the value that was going to outside builders on its own platform and makes paying for a subscription more enticing, said venture capitalist Sarah Guo, founder of the early stage AI investment firm Conviction.

“They saw that opportunity, and they want to own it,” Guo said. “It’s the equivalent of enabling apps to sell more iPhones.”

“They’re basically saying, ‘Don’t build your own websites — build it inside of our god app, which is ChatGPT,’” Shawn “Swyx” Wang said on an episode of his AI podcast, “Latent Space.”

Some tech observers saw the move as an inevitable outcome of ChatGPT’s viral success. OpenAI became a consumer tech company by accident once ChatGPT became the next iPhone and a boatload of customers drove the creation of a platform, analyst Ben Thompson wrote on his blog Stratechery.

“OpenAI is guided by its mission to develop safe AI systems that are beneficial to all,” spokesperson Niko Felix wrote in statement to The Washington Post. “By carefully expanding access to more people and gradually releasing tools, we learn from real-world experiences and usage, build up more robust mitigations, and prepare people and institutions to continuously adapt to the advent of more powerful systems in the future.”

OpenAI’s use of recognizable tactics in the hopes of becoming the dominant platform in the AI world has elicited the kind of pushback that behemoths like Facebook and Google faced much later in their rise. It has invited scrutiny about the inherent contradictions in the story OpenAI tells about its altruistic roots, including its transition to a for-profit.

“They’ve almost skipped past the growth stage that a start-up naturally goes through and are moving straight into Big Tech with the closed platform,” a former Facebook executive said, speaking on the condition of anonymity to describe sensitive matters.

The move feels out of step with pushback in tech circles against centralization and walled gardens, the executive said: “We’re just really deep into this conversation about the drawbacks of being closed and the benefits of open source.”

Despite parallels with the rise of Facebook and Google, the speed of AI advancements makes the future much more unpredictable, said Rob Leathern, a Google alum who led the product team for Facebook’s business integrity division when it launched in 2017.

“You’re mixing these paradigms we’re familiar with like app stores and other things along with a set of tools that are completely foreign and work in ways that we’ve never really seen,” said Leathern, who now runs Trust2.ai, a start-up that develops AI tools for consumer safety.

It’s also hard to compare aggressive AI upstarts to the tech giants that ruled the last internet era, because the two groups are intertwined. Companies like OpenAI and Anthropic are reliant on Microsoft, Google and Amazon to access the computer chips necessary to train today’s large AI systems. (Amazon founder Jeff Bezos owns The Washington Post. Interim CEO Patty Stonesifer sits on Amazon’s board.)

The Federal Trade Commission is looking into anticompetitive dynamics in AI, chairman Lina Khan said during a November event hosted by Y Combinator — the influential San Francisco start-up incubator that helped grow companies like Airbnb and DoorDash. More than one attendee asked what the government was doing to protect start-ups from established players like OpenAI.

Khan said her conversations with “Little Tech” in the Bay Area had been “really, really instructive to get a sense of what they’re already seeing in the market … that could be risking solidifying their dominance and kind of locking out some of the new competitors,” adding that she would “definitely take that all back to D.C..”

But Altman’s repeated calls for regulation in D.C. and willingness to link his products to existential risk have rankled start-ups and leading venture capitalists back home, including those who helped Big Tech craft their world-devouring strategies.

Meta board member Marc Andreessen, founder of the firm Andreessen Horowitz, has condemned AI CEOs who have tried to use regulatory barriers to block open-source competition. Benchmark Capital founder Bill Gurley, a former Uber board member, received a standing ovation at the conference for the “All-In” podcast, popular among Silicon Valley’s managerial class, for a 24-minute presentation on regulatory capture, where he asked the audience to recite, “Regulation is the friend of the incumbent!”

Toward the end of his talk, Gurley pointed to turncoat tech leaders who protected themselves at the expense of the rest of the Silicon Valley ecosystem, flashing an image of Zuckerberg from an article about Facebook welcoming regulation after years of trying to stave off government intervention.

The next slide featured, not a tech titan caving under pressure, but Altman, calling for AI regulation during his first Senate testimony in May, as Gurley bellowed, “And Sam’s just getting started!

Altman bristles against the criticism in interviews and online. “There is nuance in saying ‘regulate us, but not smaller competitors’ that somehow ends up getting lost and we just get bashed,” Altman posted on X after tech leaders criticized the White House’s AI-focused executive order, which Altman supports.

If the “OpenAI killed my start-up” memes got under Altman’s skin, it wasn’t apparent at DevDay. After the keynote, Altman and Chief Technology Officer Mira Murati sat for a 15 minute Q&A with 20 or so reporters. There, Altman, who often talks about aligning incentives, acknowledged the inherent conflict with developers, looking to make their mark independently from OpenAI.

But in Jobsian fashion, he focused on the positive future his technology would enable.

“I think, on the whole, most developers will be happy for the additional distribution that ChatGPT provides for what they create,” he said.

For all his critics within the tech establishment, Altman is developing champions in the next generation.

“It’s very scary when a new, ambitious tech company comes out and says, ‘We’re going to build God, and we’re going make sure that it benefits all of humanity,’” said Dev Day attendee Arnav Shah, a 17-year-old high school student from Toronto who found a research mentor at OpenAI after asking Altman for help in 2021.

“But I’m 100 percent certain that if anyone is going to build this thing — and someone will build this thing — it should be him,” he said. “I literally cannot think of someone that I would trust more that has more pure intentions.”

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