Beyond the Hype: A Look Inside the VC Skepticism of OpenAI’s Funding Round
- Amidst whispers of a colossal $100 billion capital infusion, Altman steers the globe toward the AGI horizon.
- A cadre of acquaintances grow weary of Altman’s incessant saga weaving.
- While a few venture capitalists (VCs) clandestinely criticize Altman, the majority hold their tongues in public forums.
Ordinarily, start-ups courting hefty financial injections orchestrate tailored discussions with venture capital syndicates, each meeting a meticulous presentation.
Yet, in the waning months of 2023, Sam Altman deviated from tradition as OpenAI pursued $300 million in investment. In a collective digital assembly, he propositioned a constellation of elite VCs, including Sequoia, Lightspeed, and NEA, with a firm take-it-or-leave-it deal, urging them to deliberate amongst themselves.
A venture partner, previously an Altman backer, was disoriented upon encountering their most formidable adversaries in a digital conclave.
“It felt utterly unreal,” they reflected. The proposal itself was unorthodox: an opportunity to invest at a $29 billion valuation post-funding, with profits capped the investment and conditions immutable thrice. Altman’s rationale was to shield OpenAI from external sway, allowing it to champion humanity’s cause unfettered.
“My skepticism peaked,” the partner mused. “His guise of benevolence clashes with my preference for transparency regarding his actual ambitions.” The deal’s constrained profitability and absence of safeguards left this VC cold, and Altman’s pitch, reminiscent of a “Shark Tank” episode, only compounded their disillusionment. They withdrew, observing as competitors hastily pledged their capital, including those previously critical of Altman.
An Inevitable Reckoning
A recent foray into Silicon Valley by Business Insider unearthed a narrative of disquiet. In exclusive enclaves, sipping on overpriced coffee and bespoke cocktails, the astronomical ascent of OpenAI and Sam Altman is slowly breeding a backlash.
“One of the more astutely deceptive figures in technology,” remarked another VC familiar with Altman and co-investment ventures. “Engagements with him often left me incredulous, yet his rhetoric remains unchallenged.”
Silicon Valley’s fickleness is renowned. VCs vie for the most lucrative deals, their frustration occasionally leading to covert disparagements of founders who rebuff them. This resentment intensifies as the snubbed startups flourish.
Yet, a discernible rift concerning Altman emerged as BI navigated the Valley. With OpenAI on the cusp of a $100 billion financing round and the AGI endeavor advancing, private criticisms abound, though few dare to voice them publicly. After all, estrangement from future ventures is a risk few will take.
“He’s the architect of destinies,” remarked a Silicon Valley startup founder and angel investor acquainted with Altman. “The apprehension of missing out on his ventures is palpable.” Neither Sam Altman nor OpenAI offered comments to BI’s inquiries.
The Altman Doctrine
Altman’s narrative divides opinion. To some, he’s a generous visionary, piloting groundbreaking technology for the betterment of humanity. Others perceive a penchant for self-aggrandizement over genuine human progress. Unanimously, however, his prowess in narrative crafting is acknowledged, even as he unveils grandiose plans for societal overhaul, met with skepticism by Silicon Valley’s residents.
Databricks CEO Ali Ghodsi voices skepticism towards Altman’s audacious artificial general intelligence ambitions, skeptical of the premise that AGI will usurp human economic utility.
Altman’s Journey: From Tech Buzz to Controversy
Thrown for a Loopt
Although Altman only recently became a household name, those who work in tech have been hearing his name dropped for years — and not always in glowing terms.
Loopt, Altman’s ill-fated Foursquare competitor, was sold for parts in 2012. Two years later, Altman was named the head of the legendary startup incubator Y Combinator but was later fired for self-dealing, according to a report from The Washington Post.
The Post reported that Paul Graham, a YC cofounder, flew from the UK to San Francisco to fire Altman, his protégé, and handpicked his successor personally. There were reportedly concerns about Altman putting his interests ahead of the companies he was supposed to be nurturing, along with his habit of making personal investments in YC companies through a separate fund he ran with his brother Jack.
“There are holes a mile deep in this guy’s résumé, but he’s managed to figure out how to take his chess pieces and move them correctly,” the startup founder said. “And now one of the things went crazy, and he’s an AI expert.”
“He and his brother have always been superhyped,” added the irked VC partner on the group video call in 2023, referring to Sam and his brother Jack. “It’s always been like, ‘Oh, the Altman brothers,’ it’s just going to be way overpriced just because of who they are.”
A certain something
Many VCs who spoke with BI said Altman has something specific. He can sell a vision and identify and motivate talent. You can’t run the world’s most important AI startup without skills and savvy.
However, for some investors, his habit of self-mythologizing and his need to be the “main character” is a dealbreaker.
“He’s a megalomaniac,” said the VC, who has spent time with Altman and been involved in some of the same deals. “For the same reason I don’t trust Elon, I just don’t trust somebody whose aspirations are so clearly about themselves.”
Sam Altman: The Visionary Quest in AI
Just as much as people discuss his tendency for grand self-presentation, there’s a lot of speculation about what drives Sam Altman. To some, he resembles Adam Neumann of WeWork — charismatic but controversial. Others see him as driven by a quest for power and influence. Yet, a group views him as genuinely committed to a transformative vision for the future.
According to a collaborator in a recent venture, Altman views his work as more than just a job; it’s a mission to lead humanity through an unprecedented era of change, almost with a zeal that borders on the spiritual.
Some compare Altman’s aspirations to Alexander the Great, the storied conqueror who built an immense empire and never faced defeat in battle. However, Alexander’s sudden death at 32 led to the quick unraveling of his empire. In drawing this parallel, observers hint at the grand scale of Altman’s ambitions with AI but also allude to the uncertain future of his ventures.
Ask HN: How did Sam Altman fail upward so well? | Hacker News (ycombinator.com)
Sam Altman’s Knack for Dodging Bullets — With a Little Help From Bigshot Friends — WSJ
