Long Term Investors Should Pay Attention to Silicon Valley's AI Wars & the Sam Altman Saga

Unless you have been actively staying away from the news since last Friday, you would have heard about Sam Altman being fired as CEO of OpenAI.

The drama and intrigue surrounding this event, and his subsequent hiring by Microsoft, has taken everyone who has heard about it by surprise.

No one expected one of the world's leading voices on AI to be unceremoniously kicked out of the company he headed and originally funded.

But that's what happened on Friday, 17 November, when the board of Open AI (the company that created ChatGPT) announced they had removed him from the post of CEO. The reason was that apparently, he wasn't being clear enough with his professional communication.

It must be said that in spite of all the speculations flying around and the rumour mills in both the mainstream media and social media working overtime, no one knows the real reason for his dismissal.

What we do know is that just three days later, Microsoft CEO, Satya Nadella, hired Altman to head a new AI research team.

And then there has been an unprecedented revolt by the staff at OpenAI. The company put out a statement saying 700 out of 770 employees have threatened to quit unless the current board resigns.

At the time of writing there are all sorts of theories flying around trying to explain what happened. We will find out eventually.

It's not surprising that important companies encounter power struggles at the senior level. However, it's important to be aware of the potential long-term implications of this event.

OpenAI

OpenAI is the non-profit organisation that brought us ChatGPT, GPT-4, and DALL-E. The company work on large language models, which is at the heart of ChatGPT, has been revolutionary.

Its influence is not confined to just the world of technology, but also the daily lives of millions of people who use its products.

Sam Altman is considered to be one of the world's topmost experts on Artificial Intelligence (AI). Many who joined OpenAI did so because of him. If they leave now, either for Microsoft or other startups, the organisation will be significantly diminished.

In fact, this situation is akin to a large monopoly breaking up to the benefit of many competitors. And one of the biggest competitors, Microsoft, could be the biggest beneficiary.

Microsoft is the biggest investor in OpenAI, so it's not its direct competitor like Google. But if a large number of employees follow Altman to Microsoft, it could change the AI world forever.

Until now, OpenAI had a massive lead over every company, including Google, in the cutting-edge areas of AI, especially the kind AI that has the potential to replace humans in almost every form of work.

But now we will see an increase in skilled talent jumping to many other firms. These employees could be the seeds for an explosion in innovation across many firms in Silicon Valley.

This new innovation will have profound implications for the use of AI in various sectors. It will also have grave implications for privacy issues involving AI in the long term.

At the moment, the companies riding the AI trend would not be too concerned about the long-term effects of Sam Altman leaving OpenAI. But we believe investors looking to invest in AI stocks, should pay attention to these big events.

There could be more game changing innovations like ChatGPT taking us by surprise in the near future and that too with increasing frequency. Such innovations will bring more disruption as well as opportunities for profit.

Some companies will not be able to adapt to the fast-moving changes brought about by AI. These will be loss making investments.

Others will not only adapt to this new reality but also thrive in a new, AI-driven world. These would be potentially multibagger AI stocks and should be on your watchlist.

Here are Links to Some Very Insightful Equitymaster Article and Videos on Artificial Intelligence Stocks:

• SPECIAL REPORT - How to Pick Multibagger Stocks 2023
• Artificial Intelligence is Revolutionising this Industry. Right Investments Could Lead to Big Profits...
• SCREENER - Best Artificial Intelligence Stocks in India
• The Top 5 Artificial Intelligence Plays in India
• AI Stocks in India
• List of Artificial Intelligence Stocks
• Artificial Intelligence Penny Stocks
• Top 5 Artificial Intelligence Stocks to Add to Your Watchlist

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...