The birth of OpenAI in 2015 was a grand event. With billionaire tech giants like Elon Musk and Reid Hoffman pledging $1 billion, the nonprofit artificial intelligence research firm attracted the brightest minds from big tech and academia. However, just three years later, OpenAI found itself on the brink of collapse, with Musk ready to give up on the venture. The conflict between Musk and OpenAI’s founders, including Sam Altman, ended with Musk walking away from the company and reneging on a massive donation. An editorial at Semafor delved into the secret history of OpenAI, the pivotal role Microsoft played in saving the company, and how OpenAI transformed into a powerful for-profit AI powerhouse.
In 2018, as Tesla faced its own struggles, Elon Musk proposed taking control of OpenAI, believing it had fallen behind Google. The other founders, including Sam Altman and Greg Brockman, rejected Musk’s proposal, leading to a power struggle within the company. Altman stepped in, taking on the title of president in addition to being a director. Musk departed from OpenAI’s board of directors, and his promised donation of roughly $1 billion over a period of years ceased, leaving the nonprofit without the financial means to train AI models on supercomputers.
OpenAI made a crucial decision in 2018 to pivot toward transformer models, which required vast amounts of data and increased costs. To raise the necessary capital, OpenAI announced the creation of a for-profit entity on March 11, 2019. Sam Altman, who took no equity in the new entity, sought to strike a balance between raising funds and staying true to the original mission.
In less than six months, OpenAI secured $1 billion from Microsoft, which not only provided funding but also infrastructure know-how. Together, they built a supercomputer to train massive models that eventually created groundbreaking AI technologies like ChatGPT and the image generator DALL-E. The launch of ChatGPT in November made OpenAI the hottest new tech startup, pushing Google to play catchup.
Elon Musk, furious about OpenAI’s success without his involvement, expressed his discontent in a series of tweets. He questioned the legality of the nonprofit’s transformation into a $30 billion market cap for-profit and criticized its effective control by Microsoft.
Despite the controversy surrounding Musk’s departure, OpenAI’s transformation, and the ongoing dispute between Musk and Altman, it’s undeniable that Microsoft played a vital role in OpenAI’s survival. The company provided financial support, expertise, and resources, allowing OpenAI to become a dominant player in the AI industry. As for Altman, even without any ownership stake in OpenAI, his dedication to the company’s mission has earned him a place in history.