As enterprises eagerly integrate generative AI (GenAI) into their operations, the market, poised to grow from $1.8 billion in 2022 to a staggering $33 billion by 2027, faces unexpected challenges. The departure of Sam Altman as CEO of OpenAI could have profound ramifications on the evolving landscape of generative artificial intelligence (AI), says GlobalData, a leading data and analytics company.
GlobalData analysis reveals that growth will be strong across regions and vertical sectors, with the technology being used in both horizontal and industry-specific applications.
Beatriz Valle, Senior Technology Analyst at GlobalData, says: “The shocking news of Sam Altman’s departure from OpenAI, and his appointment as head of a new AI research unit at Microsoft, has left the technology world reeling. Other senior members of OpenAI, including co-founder Greg Brockman, have also moved to Microsoft. The news has also highlighted the growing rift between the proponents of a more measured rollout of the technology, that emphasizes safety guardrails above commercialization and monetization of solutions. This could have deep-reaching implications for the market.”
The events have also shone a light on the unusual legal structure of OpenAI, which was founded in 2015 as a non-profit company and adopted a new structure in 2019, following Microsoft’s involvement.
Valle observes: “OpenAI is controlled by its non-profit board, which has no fiduciary obligations towards stakeholders or investors. The company, which recently held its first developer conference with a slew of announcements including GPT-4 Turbo with Vision and DALL·E 3 API, also attracted headlines when it started talks with investors to seek a valuation of $86 billion, an unusually high figure for a startup with a history of modest sales. However, as GlobalData forecasts indicate, the technology has enormous potential, and it was on this basis that investors were willing to enter talks for this level of valuation.”
The dramatic ousting of Altman over the weekend resulted in a chain of events that culminated with OpenAI rushing to contain the situation, and naming Emmett Shear, former CEO of video-streaming platform Twitch, as its new CEO. Shear’s appointment means that, at present, Ilya Sutskever is the only remaining co-founder on OpenAI’s board.
Valle concludes: “It will be interesting to see how OpenAI, arguably the most high-profile AI company in the world, fares after the ousting of its famous former CEO. The departure of other senior employees means that the financial backing from Microsoft may dry up, but also that OpenAI will now be free to pursue its own vision. But at what cost? Hundreds of employees have now signed a letter asking the board to reinstate Altman as CEO. At present, it is hard to know what the implications for other key players will be, as well as for the industry at large. The events of the last few days could have a lasting impact on the overall GenAI market.”
