Like this newsletter? Subscribe to my podcast Better Offline - this week we've got a two parter digging into Sam Altman, with a deeper dive featuring Tom Dotan of the Wall Street Journal (Part 1) and Ellen Huet (Part 2, airing Friday.) I think you'll love the back-catalog too!
The tech industry has craved a messiah since the death of Steve Jobs, but in OpenAI CEO Sam Altman they’ve discovered more of a false prophet — a seedy grifter that uses his remarkable ability to impress and manipulate Silicon Valley’s elite to mask a total lack of technical or business acumen.
I realize that this sounds a little dramatic, and a little inflammatory, but the air around Altman has, for years, been that he’s somehow a magical, special creature — a man “wise beyond his years” at the tender age of 19 — who, to quote startup incubator Y Combinator’s Paul Graham, “could be parachuted into an island full of cannibals and come back in 5 years and be king.” The Sam Altman myth is one of a person gifted with immense talent and ability, but without any demonstrations of where said talents and abilities have been employed.
In a stunning, in-depth piece by Ellen Huet of Bloomberg, Sam Altman is repeatedly framed by contemporaries as some sort of genius without anyone ever actually explaining why, other than this vague sense of intellectual superiority, with Y Combinator founder John Coogan claiming that Altman “had an uncanny ability to listen intently and diagnose problems…” and that he was “the Michael Jordan of listening.”
These laughable accolades aside, there doesn’t actually appear to be a single story I can find of some genius moment of clarity ushered in by Sam Altman. There are no fantastical situations where his remarkable mind brilliantly delivered the exact solution to a problem, or a singular concrete accomplishment that required preternatural levels of vision and clarity, just endless platitudes about a man who “always gets what he wants,” an unstoppably pushy young gentleman that excelled not at building great companies that did great things, but — and I quote Huet’s title here — “bending the world to his will.”
If this sounds familiar, it’s because I’ve written and podcasted about this before. Many CEOs have the ability to make bold proclamations and have them accepted, even by the media that purportedly exists to hold them to account, with the earliest days of Facebook’s Metaverse pivot the best example of this, when even the smartest tech journalists took leave of their senses and conceded that, in a near future, we’ll all be convening in virtual worlds for work, play, and socialization.
Sam Altman, however, exists in a category of his own. There are many, many, many examples of him saying that OpenAI — or AI more broadly — will do something it can’t and likely won’t, and it being meekly accepted by the Fourth Estate without any real pushback. There are more still of him framing the limits of the present reality as a positive — like when, in a fireside sitdown with 1980s used car salesman Salesforce CEO Marc Benioff, Altman proclaimed that AI hallucinations (when an LLM asserts something untrue as fact, because AI doesn’t know anything) are a feature, not a bug, and rather than being treated as some kind of fundamental limitation, should be regarded as a form of creative expression.
That’s cute, but if you use ChatGPT to write a legal brief and it cites a non-existent case, I don’t think “but the AI was just baring its soul” will fly with the judge.
There’s seemingly no limit to this phenomenon. When Altman says something genuinely, truly insane — like how he wants to raise $7tn, which is the combined GDP of Germany and France, to build up a dedicated AI semiconductor manufacturing capacity — the response isn’t to immediately dismiss it with a chorus of derisive laughter, but to actually discuss it with a level of seriousness that isn’t even remotely warranted.
And that might be Altman’s real skill — beguiling people that don't really build things with his instinctual ability to tell them exactly what they want to hear, to get in exactly the room he needs to be in at exactly the right time to connect exactly the right people, all without ever having to actually do anything or create anything. Despite the fact that his location-based social network Loopt failed to gain any traction (or build any meaningful product, it seems), it allowed him to get in the door at Y Combinator and dazzle Paul Graham, who, for reasons unknown, became convinced that Altman was the future, and in turn helped Altman get in on huge venture deals in companies like Stripe and Airbnb.
This is, on some level, the problem with Silicon Valley, and a precursor to the growth-at-all-costs ecosystem. When you strip away his ability to convince people that he’s smart, Altman had actually done very little — he was a college dropout with a failing-then-failed startup, one where employees tried to get him fired twice.
In a podcast discovered by Ellen Huet at Bloomberg, Twitch co-founder Emmett Shear — a peer from Altman’s Y Combinator cohort and briefly Altman’s replacement as CEO of OpenAI — described his surprise that Altman was able to close deals with Boost mobile without an actual product. Yet because he fit a template — because he resembled the kind of guy that got things done — powerful people in Silicon Valley have fallen over themselves to give Altman the opportunities that made him look like a kingmaker.
The truth is a little grimmer: Altman was, from an early age, chosen by Silicon Valley to be their next messiah, which allowed him to wield incredible power over the startup ecosystem without ever meaningfully contributing to it. Altman’s ascent to the apex of Silicon Valley — and the budding flowers of a Sam Altman cult of personality we see — feels just random and arbitrary, without any real force majeure behind it.
Well, except one thing. Altman is a master manipulator, incredibly adept at saying things that sound profound, like “your rate of learning should always be high” and that “each unit of work you do should generate more and more results,” while also knowing that the self-reinforcing prophecies of the tech industry are what make someone rich and powerful rather than any particular achievements.
In essence, his vacuous platitudes — the kind that can be cut into 10-second clips that the YouTube Shorts algorithm involuntarily thrusts upon you, and that sound profound only to a special category of credible moron — was a disguise for his only real superpower: nepotism.
Altman didn’t “find” the startups that made him so fabulously rich and influential — he was being shown them by other powerful people that “wanted him in” on these deals so that he could give them advice based on a career of specious managerial puffery, and because the Valley liked the kind of monster it created, people kept giving him the opportunities and funding to do what he wanted.
Nowhere is this more obvious than in Hydrazine Capital, Altman’s venture capital fund that he created with the $5 million he got from selling Loopt and backing from Peter Thiel. Hydrazine invested 75% of its funding in Y Combinator companies, including Reddit and Instacart, even after Altman became head of the incubator, despite the fact that other partners at Y Combinator were forbidden from managing their own investment funds at the time according to reporting by the Wall Street Journal. Altman became head of Y Combinator despite being one of its first failures, all because he’s capable of saying stupid shit like “competitors are one of the last monsters that haunt your dreams” to New York Magazine shortly before predicting that there was “absolutely no reason to believe” that by 2029 a computer could replicate his brain.
Altman is a monument to the rot at the core of the valley, and a product of the growing distance between the tech industry and actually creating things of value. While Paul Graham may be a decorated and successful computer scientist, by the time he made Sam Altman President of Y Combinator in 2014, he was already more than a decade-removed from selling his software startup Viaweb to Yahoo. As he drifted further from actually building things, so too did Graham’s essays drift away from the philosophy of software development toward a darker management philosophy, where he admitted in a blog from 2003 that “intelligence in itself is not a factor in popularity…because [smart kids] don’t want to be popular,” and that “popularity…is much more about alliances” and “doing things that bring you close to other popular people.”
Two years before making Altman president, Graham would publish a piece called “startup = growth,” claiming that “growth drives everything in this world” and that “growth makes the successful companies so valuable that the expected value is high even though the risk is too” — a statement that would only make sense if you believed that there will always be new hyper-growth companies, and indeed, the opportunities for the kind of hyper-growth that emerged during the first decade or so of the Internet.
Perhaps the problem is a little simpler: that while Sam Altman is a specious opportunist and manipulator, the time that he entered Silicon Valley was a period where all one needed to be successful was to be in the right rooms.
Altman is adept at using connections to make new connections, in finding ways to make others owe him favors, in saying the right thing at the right time when he knew that nobody would think about it too hard. Altman was early on Stripe, and Reddit, and Airbnb — all seemingly-brilliant moments in the life of a man who had many things handed to him, who knew how to look and sound to get put in the room and to get the capital to make his next move. It’s easy to conflate investment returns with intellectual capital, even though the truth is that people liked Altman enough to give him the opportunity to be rich, and he took it.
The following is an ad, but not one I was paid for.
In 2012, I met my best friend, a guy called Phil Broughton, because I bought a bottle of his coffee drink, The Black Blood of the Earth. BBotE is made by cold water steeping followed by vacuum extraction, pulling pure coffee out of the beans, and the result is a highly-concentrated, acid-free coffee, where one shot is all you really should have as BBotE is 40 times as powerful as regular coffee.
BBotE has two calories, and it tastes really good, kind of like the platonic form of "coffee" you imagined before you actually tried coffee for the first time. Bottles last three months in the fridge, and you can enjoy it like you would regular coffee (putting it in hot water), take a shot of it (do not take more than a shot), or mix half a shot in a glass of milk (4:1 ratio) to make something like an iced latte. It's really great. I've been drinking it for years. It's the best tasting coffee I've ever had while also being easy on my weak little stomach.
Phil is a health physicist and Deputy Laser Safety officer, and personally makes every bottle of BBotE. Use the code "SMILINGMAN" for 10% off. You can buy it here.
Those who might defend Altman might suggest that he may not have been a creator, but he gave his time and energy to those he backed — except according to the Washington Post, Altman’s time at Y Combinator ended because he “developed a reputation for favoring personal priorities over official duties and for an absenteeism that rankled his peers and some of the start-ups he was supposed to nurture,” much as he had once diverted engineers at Loopt to work on a dating app instead of the company they worked at.
Altman has done well befriending and manipulating those who will empower his cult of personality, like eternal marketer and Reddit co-founder Alexis Ohanian, who interviewed Altman at a JP Morgan conference so that he could say things like “we’re not far from AI enabling a one-person billion dollar company.”
To give Altman credit, he really is able to talk for hours without saying anything — just ask LinkedIn co-founder Reid Hoffman, an investor in OpenAI who was critical to getting Altman returned to the helm when he was fired, who also let Sam ramble for over an hour on his podcast Masters of Scale, with Altman saying at one point that he was in “a developing world country” shortly after the iPhone came out, and that despite their poverty, “everyone had smartphones,” a statement so obviously, blatantly made up that they should’ve bopped him on the nose with a newspaper.
It shouldn’t really come as a surprise that Hoffman has such an affection for Altman. After all, LinkedIn is the place where people write lengthy screeds — often in a grating, staccato style where each paragraph is a short sentence, typically more irritating and cringeworthy than the last — that, ultimately, say nothing.
Altman is a “close friend” of Airbnb CEO Brian Chesky, and that’s why Chesky helps peddle Altman’s vague promises about artificial intelligence (calling it “bigger than internet, mobile and cloud combined”) and how AI will non-specifically change Airbnb, a company that has offered the same (but gradually worse) product for over a decade.
Altman has used his political maneuvering to become incredibly rich, growing, according to the Wall Street Journal, a portfolio of more than 400 companies worth nearly three billion dollars, partially funded by hundreds of millions of dollars of debt from JPMorgan Chase. On top of being an incredibly risky idea — borrowing money from a bank and putting it into an industry where the majority of companies fail — this is another example of how Altman’s cult of personality allows him to con his way through the world.
A regular person can barely get a mortgage, let alone what is likely (I’m guessing) a low-interest rate loan to sink tens or hundreds of millions of dollars into companies like Helion, a company that Altman put $375 million into in 2021. Altman serves both as the Chairman of Helion’s board and is potentially one of its largest customers, with OpenAI working on a deal to, and I quote Matthew Connatser of The Register, “get access to the startup’s not-yet-possible nuclear fusion-driven electricity generators.” And, as the Wall Street Journal reports, OpenAI is happily cutting multiple deals with Altman’s other investments, including Reddit (which Altman owns hundreds of millions of dollars of stock in thanks to investment from his firm Hydrazine capital), along with AI devices Limitless and Humane, the latter of which Altman owns a 15% stake in, according to the Journal.
The Wall Street Journal also reports that OpenAI has established “a strengthened conflicts policy” and a “new, independent audit committee that reviews potential conflicts,” which the Journal also notes has yet to disclose any details about what those policies might be. It’s also important to remember that when Altman returned to OpenAI, he appointed a new board of directors made up of an A-Team of Rot Economists, adding people like Fidji Simo (CEO of Instacart, a company Altman invested in) to a board that also included Adam D’Angelo of Quora, another company that Sam Altman invested in.
I also forgot to add one other addition that Sam Altman made to the board: a guy you might know called Sam Altman.
The last month has been a difficult one for Altman, starting with the chaos caused by OpenAI blatantly mimicking Scarlett Johansson’s voice for the new version of ChatGPT, followed by the resignation of researchers who claimed that OpenAI prioritized “shiny products” over AI safety after the dissolution of OpenAI’s AI safety team. Shortly thereafter, former OpenAI board member Helen Toner revealed that Altman was fired from OpenAI because of a regular pattern of deception, where Altman would give inaccurate info about the company’s safety processes on multiple occasions. Altman’s deceit was so severe that OpenAI’s board only found out about the launch of ChatGPT when it was announced on Twitter.
Toner also noted that Altman was an aggressive political player, with the board (correctly) worrying that if “Sam had any inkling that [the board] might do something that went against him, he would pull out all the stops, do everything in his power to undermine the board, to prevent us from even getting to the point of being able to fire him.”
As a reminder, the board succeeded in firing Sam, but not for long, with Altman returning as CEO a few days later, kicking Toner off the board along with Ilya Sutskever, a technical co-founder that Altman manipulated long enough to build ChatGPT, and then ousted him the moment he chose to complain.
Last week, a group of insiders at various AI companies published an open letter asking their overlords for the “right to warn about Advanced Artificial Intelligence” in a monument to the marketing machine that Altman has created. While there are genuine safety issues with artificial intelligence to consider, these people are desperately afraid of the computer coming alive and killing them when they should fear the non-technical manipulator getting rich making egregious promises about what AI can actually do.
The bigger concern should be about what Leo Aschenbrenner, a former safety researcher at OpenAI, had to say on the Dwarkesh Patel podcast, where he claimed that security practices at OpenAI were “egregiously insufficient,” and that priorities at the company were focused on growth over stability or security.
These people are afraid of OpenAI potentially creating a computer that can think for itself at a time they should be far more concerned about the career-manipulator and con artist that’s running the company. Sam Altman is dangerous to artificial intelligence not because he’s building artificial general intelligence — a kind of AI that meets or surpasses human cognitive capabilities, and potentially mimics human sentience, a bit like Data from Star Trek: The Next Generation — but because Sam Altman’s focus is on what Sam Altman can build to grow the power and influence of Sam Altman.
OpenAI’s growth is stalling, with Alex Kantrowitz reporting that user growth has effectively come to a halt based on a recent release claiming that ChatGPT had 100 million users a couple of weeks ago, the exact same number that the company claimed to have in November 2023. ChatGPT is a damned expensive product to operate, with the company burning through capital at a prodigious rate, and while OpenAI is aggressively monetizing it (both to consumers and to businesses), it’s far from crossing the break-even rubicon.
As things get desperate, Altman will use the only approach he knows: sheer force of will. He will push OpenAI to grow and sell into as many industries as possible, a specious hype-man selling to other specious hype-men desperate to connect their company to an AI bubble inflated by Altman himself. And I’d argue that this is exceedingly dangerous for Silicon Valley and the tech industry writ large as executives disconnected from the process of creating software follow another non-technical founder hocking unprofitable, unsustainable and hallucination-prone software.
Generative artificial intelligence is not going to become the incredible supercomputer that Altman has regularly promised. It won’t be a virtual brain or imminently “human-like” or “a super smart person that knows everything about you” because it is, even at its deepest complexity, a fundamentally different technology based on mathematics rather than anything resembling how a human being thinks or acts.
Altman has taken advantage of the fact that the tech industry might not have any hyper-growth markets left, knowing that ChatGPT is, much like Altman, incredibly adept at mimicking depth and experience by parroting the experiences of those who have actually done things. Like Altman, ChatGPT consumes information and feeds it back to people in a way that feels superficially satisfying in a way that’s impressive to those who don’t really care about creativity or depth, taking advantage of the fact that the tech ecosystem has become dominated — and funded — by people who don’t really do anything that involves building software.
While ChatGPT isn’t inherently useless, Altman realizes that it’s impossible to generate the kind of funding and hype he needs based on its actual achievements, and that to continue to accumulate power and money, he must speciously hype it to wealthy and powerful people who don’t participate in the creation of anything.
Sam Altman is a monster created by Silicon Valley’s sin of empowering and elevating those that don’t actually build software, which, in turn, led to the greater sin of allowing the tech industry to drift away from fixing the problems of actual human beings. Altman’s manipulative power plays have been so effective because so many of the power players in venture capital and the public markets are disconnected from the process of building software and hardware, making them incapable — or unwilling — to understand that Altman is leading them to a desolate place.
On some level, it’s kind of impressive how he’s succeeded in bending the tech industry to his whims, to the point that executives like Sundar Pichai of Google are willing to break their own products in pursuit of the next big hype-cycle. Altman may not actually create anything, but he’s excellent at spotting market opportunities — even if these opportunities involve him transparently lying about the technology he creates while having his boosters further propagate said lies either because they don’t know or don’t care that Altman is full of shit.
It doesn’t matter that Google Search is still plagued with nonsensical AI answers that sometimes steal other people’s work, or that the AI legal research tools being sold to firms regularly hallucinate — a problem that’s impossible to fix — because AI is the new thing that can be sold to the markets.
All of this is thanks to Sam Altman and a tech industry that’s lost the ability to create things worthy of an actual hype cycle, to the point that a specious non-technical manipulator can lead it down a dark, ugly path. The tech industry has spent years pissing off customers, with platforms like Facebook and Google actively making their products less useful in the pursuit of perpetual growth, unashamedly turning their backs on the people that made them rich and acting with such contempt for users that I truly believe society will turn on the tech industry.
And Altman will be fine. When the deck of cards collapses, he’ll find something to blame it on — market forces, a lack of energy breakthroughs, or “unfortunate economic forces” — and remain a billionaire capable of doing anything he wants. Those that will suffer will be the workers and the startups trying to raise funding to actually build the future — companies with actual vision, and actual talent, and an actual product.
It won’t, however, be the apocalypse. It’ll just be a brutal realignment for an industry that has needed one. My hope is that venture capital finally learns to back companies that make a profit building software and hardware that actually helps people.
