According to Sam Altman, he has the ‘coolest, most important job maybe in history’ – and there are plenty, so far, who have taken the 40-year-old billionaire at his own estimate.
Altman, pals with everyone from Donald Trump to singer Katy Perry, is the artificial intelligence (AI) superstar who has driven OpenAI from complete obscurity to the very heart of the biggest investment boom in modern history.
Instantly recognisable in trademark wraparound shades, Altman – co-founder and CEO of OpenAI – has become the poster boy for a technology we’ve been assured will usher in the biggest revolution since the internet. There’s no doubting the scale of his impact: ChatGPT, the powerful AI language program developed by OpenAI, is already used by more than 800 million, a tenth of the world’s population, every week.
Shades or no shades, however, Altman is starting to look a little less ‘cool’ right now. And when he was ambushed on a recent business podcast with the question of the moment, his anger and discomfort were impossible to disguise.
How, he was asked, could a company making $13billion in annual revenue afford the $1.4trillion it has already made in spending commitments?
Altman was defensive, some might say evasive. Yet stock markets around the world are demanding to know the answer to that very same question amid growing doubts not just about OpenAI, but the artificial intelligence industry itself.
Concerns about Altman’s activities are already so serious that many predict his company will end up at the heart of one of the biggest financial bubbles ever, crashing national economies and wiping hundreds of billions off the wealth of shareholders.
Astonishing as it may sound for an entity that has existed for just a decade and only really started making waves in the past two years with the launch of ChatGPT, the world economy itself may hang on the fortunes of a company that has never made a profit, just multi-billion-dollar losses.
Sam Altman – co-founder and CEO of OpenAI – has become the poster boy for a technology we’ve been assured will usher in the biggest revolution since the internet
His success has seen him rub shoulders with celebrities such as pop singer Katy Perry
Altman speaking at the White House in January this year after Donald Trump announced a range of investments in AI
Not that everyone is quite so pessimistic. Even now, OpenAI continues to suck up many billions of dollars from investors and business partners who are convinced that AI really will usher in an economic and social revolution – one that they believe will bring them untold riches by drastically boosting productivity, even if it brings the rest of us the lingering threat of being replaced by machines.
Nearly $1.5trillion will be pumped into AI this year, say analysts, who also estimate that by the end of 2028 the sums spent worldwide on data centres alone (which provide the vast computing power that AI needs) will exceed $3trillion, making many investors very nervous.
‘That is an extraordinary amount of money to be spending speculatively,’ Julian Bishop of investment trust Brunner told the Daily Mail this week.
It’s hardly surprising, then, that everyone from the Bank of England and International Monetary Fund to JP Morgan’s Jamie Dimon, America’s most powerful banker, is warning about the prospect of an AI bubble.
One of the reasons for the unease is the fact that so many of the world’s biggest companies – all of them internet-related – are deeply entwined with OpenAI, seemingly unable to expand without subsidising, investing in and partnering with each other.
Some commentators now wonder whether this tangled and potentially dangerous web of deals has made OpenAI ‘too big to fail’, the economic fallout from its collapse too catastrophic to risk.
Tech giants Google, Meta, Amazon and Microsoft are planning to invest $400billion into AI this year alone and are determined to keep on spending lavishly – their eventual goal being to create an artificial general intelligence (AGI) that can match or surpass human capabilities across virtually all cognitive tasks.
Other smaller companies such as the software firm Oracle are also agreeing deals with OpenAI running into the hundreds of billions of dollars but much of the investment money is being borrowed from so-called ‘shadow’ banks, which are less regulated and ask fewer questions of borrowers.
Nearly $1.5trillion will be pumped into AI this year, say analysts, who also estimate that by the end of 2028 the sums spent worldwide on data centres alone will exceed $3trillion
Altman began OpenAI in partnership with Elon Musk as a research organisation – but the two have since parted ways
The huge shadow finance sector is itself a cause of mounting anxiety for economists, with many fearing that its toxic influence could lead to a repeat of the sub-prime mortgages lending disaster which led to the financial collapse of 2008.
If and when the AI bubble bursts, say experts, it will be more ruinous than the notorious dotcom bubble that exploded in 2000 and sparked a mild global recession.
The Economist magazine this week reported that an AI stock market crash could wipe out 8 per cent of Americans’ household worth and – because falling share prices discourage consumer spending – cut American consumption by about $890billion, or 2.9 per cent of GDP.
The ramifications of what the Bank of England calls a ‘sharp market correction’ would spread well beyond the US.
As usually happens when investors get over-excited about new technology, projections about how much it will boost productivity ramp up share prices in stock markets around the world, including London.
Anyone who’s seen a rise in the past couple of years in the value of their pension or other stock market investments can probably point to the AI effect. Some believe that the billions being poured into AI is the only reason that some countries such as the US and UK haven’t tipped into recession.
Harvard professor Jason Furman, an economist who advised two US presidents on how to cope with economic bubbles, believes that without spending on data centres, microchips and other AI infrastructure, US growth would have almost ground to a halt in the first half of this year – instead of the almost 4 per cent expansion it actually recorded.
No wonder that leaders such as Donald Trump and Keir Starmer have heard Silicon Valley’s siren call that AI will boost economic productivity and are doing what they can to fuel the hype.
Last year, a former OpenAI researcher named Suchir Balaji was found shot dead with his own gun in his San Francisco home. He had been a whistleblower alleging that the company had breached copyright law by stealing internet data to feed into ChatGPT
Sir Keir’s Government, for instance, has promised to ‘turbocharge’ AI and predicts that it will ‘deliver a decade of national renewal’.
Nowhere has the excitement or the risks of AI swirled more intensely than around OpenAI, which, astonishingly, is now valued at $500billion – more than 38 times its annual revenue.
There’s speculation that OpenAI intends to become the first company ever to get an initial stock market listing valuing it at $1trillion.
But OpenAI has never even turned a profit. According to its own projections, its losses will triple next year to $14billion.
Even that daunting figure could be over-optimistic given that analysis of statements by Microsoft, which part owns the company, indicates that OpenAI made a net loss of at least $11.5billion during the last financial quarter alone.
OpenAI may have a lot of pioneering technology, but it is not ‘a proper business’, Stephen Yiu, chief investment officer of London investment company Blue Whale Growth Fund told the Daily Mail.
Yiu, an AI evangelist who made a fortune for clients by investing in chip-maker Nvidia, which became the first company in the world to be valued at an eye-watering $5trillion, says OpenAI’s growth is impressive but notes that no more than 5 per cent of ChatGPT’s users actually pay for it. If it were a public company, OpenAI would be ‘uninvestible’, he said.
Dame Wendy Hall, professor of computer science at Southampton University and a government adviser on AI, told the Daily Mail she saw no way of OpenAI of surviving in its present form.
‘It has to diversify to survive,’ she said, suggesting that the AI industry was currently ‘the Wild West’ and that we are ‘on the tip of an AI crash’.
Meanwhile, OpenAI seems increasingly desperate to find new revenue streams. It already offers erotic chatbots and – as Altman announced last month – will soon add pornography for ‘verified adults’.
It’s a long way from the noble pledges of 2015 when Altman started OpenAI in partnership with Elon Musk as a research organisation rather than a commercial company that would seek to ‘advance digital intelligence in the way that is most likely to benefit humanity as a whole’.
The founders claimed they were partly motivated by concerns about AI safety and the existential risk from artificial general intelligence, although Musk would later break with Altman and sue him for shifting the focus from helping humanity to making a profit.
Altman, who could programme and dismantle a Mac computer by the age of eight, is a fiercely bright, self-confident workaholic who’s notoriously impatient with those he considers less intelligent than him.
Widely believed to sit somewhere on the autism spectrum – although he denies it – Altman came out as gay at 16 and has recently been rhapsodising about becoming a first-time father with Australian partner, Oliver Mulherin.
Usefully for a man who has already admitted that AI could destroy the world, he’s a Doomsday prepper who has readied a fully-stocked survival bunker in rural California for the Apocalypse.
He studied computer science at Stanford University and promised the moon when OpenAI released ChatGPT in November 2022 – only to be briefly sacked as the company’s boss the following year.
Board members decided he hadn’t been honest with them and couldn’t be trusted to run something so powerful.
Others say he can be extremely manipulative: ‘You could parachute him into an island full of cannibals and come back in five years and he’d be the king,’ said Paul Graham, a former boss.
His recent transformation from Left-wing San Francisco Democrat to best buddy of Trump (supplanting Mr Musk) has further convinced sceptics that he’s just another greedy ‘tech bro’ with no true interest in the common good.
His critics are hardly surprised that ChatGPT – which Altman admits he is rushing to develop before his rivals – has been involved in myriad scandals beyond its dubious success in writing essays for lazy students and providing lonely nerds with virtual girlfriends.
ChatGPT has advised people how to kill themselves and even wrote a woman her own ‘heartbreaking’ suicide note. Researchers say it has told 13-year-olds how to get drunk and high, and given instructions for murder, self-mutilation and devil worship. Programmed to sound as human as possible, they are causing some users to develop ‘AI psychosis’, a delusional mental health issue so serious it has led to divorce, institutionalisation and suicide.
Altman has had to endure his own personal scandals. Earlier this year, his sister, Ann, filed a lawsuit accusing him of sexually abusing her from the age of three, when Sam was 12. He and other family members dismissed her claims as ‘utterly untrue’. Last year, a former OpenAI researcher named Suchir Balaji was found shot dead with his own gun in his San Francisco home. He had been a whistleblower alleging that the company had breached copyright law by stealing internet data to feed into ChatGPT.
Although a coroner ruled he’d died by suicide, his parents questioned the judgment and Elon Musk publicly claimed last month that ‘all signs point to it being murder’.
Of Altman, he added: ‘I don’t know if he’s guilty, but it’s not possible to look more guilty.’ Musk, who has a habit of making wild allegations, provided no supporting evidence. There is no proof Musk had anything to do with his murder.
Altman insisted on Thursday his company was not too big to fail if it ‘screws up’, adding: ‘We plan to be a wildly successful company, but if we get it wrong, that’s on us.’
Plenty of internet ventures that seemed like brilliant ideas never survived the great dotcom crash. Many people might wish that ChatGPT joined them.
For all the billions being lavished on it, even OpenAI might yet be added to the digital junk-heap of history.
We can only hope Sam Altman doesn’t drag the rest of us down, too.
