Founder vulnerability in technology ecosystem is worrying: Indian startup industry on Sam Altman’s ouster from OpenAI

Entrepreneurs and investors from India’s startup ecosystem were left reeling on Saturday after learning of the sudden dismissal of OpenAI cofounder and chief executive Sam Altman. The decision of the company’s board has sent shockwaves through the community with many expressing shock and dismay.

While the exact reasons behind Altman’s abrupt ouster are still to be disclosed by OpenAI, multiple executives ET spoke to say his exit would affect the pace of evolution of AI and put the lens on the composition of startup boards, globally.

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Altman has emerged as the most preeminent name in the generative artificial intelligence (AGI) space after the launch of ChatGPT.

In a statement on Friday, OpenAI said, “Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI.”

Also read | The OpenAI board which fired Sam Altman

Slowdown in AI innovation

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Fintech unicorn Razorpay cofounder and chief executive officer Harshil Mathur termed Altman’s shock exit a “Jobs firing of this generation,” drawing similarity to Apple cofounder Steve Jobs’ ouster from the company in the late 1980s. “While it’s hard to figure out why this happened, one thing is clear, this will definitely slow down the progress of AI. The drive, energy, and speed at which Sam operates is infectious and impossible to replace,” Mathur said in a post on X, formerly Twitter. Razorpay is a Y Combinator-backed startup.

Altman was previously the president of famed Silicon Valley accelerator Y Combinator which has backed some of the biggest US tech firms including payments major Stripe, home-sharing platform Airbnb, and Dropbox, a file hosting service. YC, as it’s commonly known, became one of the best-known accelerator programmes globally under Altman. It backed more than 230 startups in India as it turned highly bullish on the Indian market.

Also read | OpenAI cofounder Greg Brockman on how Ilya Sutskever, company board fired Sam Altman over Google Meet

Altman’s OpenAI is the developer of ChatGPT, among the fastest-growing consumer software application in the world, which uses proprietary large language models to generate primarily textual responses.

ChatGPT was launched last year to massive success and has since led to a frenzied growth in the AGI industry.

In 2008, Twitter had also dismissed its cofounder Jack Dorsey. Both Jobs and Dorsey eventually returned to the companies they had started.

Also read | Meet Mira Murati, the engineer leading OpenAI after Sam Altman’s ouster

Founder vulnerability at tech companies

Subramanya SV, cofounder, Fisdom, a wealth management platform, also said the development was shocking. “People associated OpenAI with Sam Altman. While we don’t know what the real matter is, it will be clear in the subsequent days. I hope the way the matter has unfolded with the board, will not set a precedent domestically,” he said. “In India, founders have less equity but form a big part of the culture. The worst part is that this has happened in Silicon Valley.”

Early-stage venture fund India Quotient’s founding partner Anand Lunia said the technology ecosystem globally is still struggling to structure tech companies where founders are in control, be it profit or non-profit.

“Long term innovation becomes tough when founders are not in control over a long period of time. This incident brings to mind the vulnerability with which founders work knowing very well they could get kicked out for any reason, any time. With businesses such as OpenAI and X, ownership and control sees many forces including governments, lobby groups and investors. The world is yet to see a format where founders are in actual control,” Lunia said.

Also read | ‘Saddened by what’s transpired’: Business leaders react to OpenAI CEO Sam Altman’s ouster

Peak XV Partners and Tiger Global-backed edtech Scaler Academy founder and CEO Abhimanyu Saxena told ET that the OpenAI scenario currently seems typical of a fallout between the innovator and the board.

”OpenAI’s applications are so cutting edge that no one knows what may come out of it. It’s definitely a historic event… One can only speculate at this point if there were ideological differences that led to this. Either way, innovation will substantially slow down as an impact for now,” Saxena said.

Board composition important

Indian founders also highlighted a key lesson for entrepreneurs to keep their board members aligned to the larger vision.

Manish Maheshwari, former Twitter India head and cofounder of, which uses AI for creator monetisation, “The composition of OpenAI’s board and the dynamics leading to the ouster of Altman were complex. The decision seems to have stemmed from significant disagreements between Altman and other board members…. These disagreements likely revolved around key issues like AI safety, ethical AI development, and the strategic direction of OpenAI. Given the rapid evolution of AI and its profound implications, such discussions and differences of opinion are not uncommon in organizations at the forefront of technology. But those differences are addressed through a proper leadership transition plan … the way this change occurred is bizarre.”

Also read | ChatGPT maker OpenAI’s board ousts Sam Altman as CEO

Besides Altman, and cofounder and president Greg Brockman, who also quit on Friday, the OpenAI board comprised chief scientist Ilya Sutskever, Quora CEO Adam D’Angelo, tech entrepreneur Tasha McCauley, and Georgetown Center for Security and Emerging Technology’s Helen Tone.

Maheshwari said there has been an ongoing dilemma among tech firms in the US on prioritising between tech-led innovation and commercial gains. “The pendulum is swinging on the other side at OpenAI, which is to go back to what is the right thing to do for the benefit of humankind via AI. That could be a blessing in disguise, but the way it is handled is something that has shocked everyone,” Maheshwari said.

Web3 startup Polygon founder Jaynti Kanani also took to X to make a statement without directly referring to Altman. “This is not (the) first time. Have seen stupid and incompetent people pushing good ones multiple times before,” wrote Kanani, who stepped down from the company in October.


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