OpenAI's Secret Weapon Is Sam Altman's 33-Year-Old Lieutenant

(Bloomberg Businessweek) -- .In late 2022, just a few months after OpenAI released ChatGPT, the company received an inquiry from Axel Springer SE, the German media conglomerate that owns and . It was interested in talking about how the chatbot would affect the future of news, and whether the two companies could find a way to work together..The tension caused by OpenAI’s practice of ingesting material on the internet to build the large language model powering ChatGPT was already evident. It was facing a lawsuit alleging that GitHub Copilot, which uses OpenAI’s tech to write computer code, violated copyright by using existing code repositories as training data, a claim that OpenAI disputed. Visual artists were suing other artificial intelligence companies such as Midjourney and Stability AI Ltd. for copyright infringement, which the companies also contested. It wasn’t hard to foresee similar legal action coming from media companies, whose businesses had already been disrupted by the internet, and which were concerned that AI chatbots built in part on their own content could siphon away readership without compensation..Working with Axel Springer presented a major opportunity for OpenAI to get started on a new class of partnerships that could make allies out of media companies rather than alienate them from the start. It seemed like an obvious assignment for OpenAI Chief Executive Officer Sam Altman, the 38-year-old who was earning a reputation as the spokesperson-in-chief for the entire AI industry. Instead, Altman asked Brad Lightcap, the company’s chief operating officer, to handle the negotiations, giving him full control over the talks. “When I delegate, I really delegate,” Altman says..At 33, Lightcap makes even Altman seem kind of old. He started his career in finance before moving to San Francisco to work for Dropbox Inc. in 2013. Lightcap worked for Altman as an investor at the startup incubator Y Combinator, then followed him to OpenAI in 2018, when it was a small nonprofit research lab without a business plan or a working product. Lightcap—who over the years has become one of Altman’s most trusted lieutenants—is now tasked with transforming the most intriguing tech startup in recent memory into a commercial powerhouse that can compete with Alphabet Inc.’s Google and Meta Platforms Inc..People who work with Lightcap describe him as a good listener who’s fixated on the needs of OpenAI’s customers—he spent three hours on Christmas Eve having brunch with a prospective client—and who’s helped create structure within a rapidly changing organization. “He doesn’t say a lot, but he says very incisive things when he does talk,” says Altman..After months of discussions with Axel Springer’s point person on the deal, Chief Information Officer Samir Fadlallah, Lightcap invited a handful of its executives to visit OpenAI’s headquarters in May. He says he was “admittedly a little intimidated” about designing media deals. “I was thinking, ‘This isn’t a world I know super well,’” he says. “I don’t come from it. I don’t have deep contacts or a network here.”.People in media often see the tech industry as arrogant and unappreciative of the importance of so-called legacy companies, but Lightcap’s guests were pleased by his humility. Fadlallah says Lightcap told him that OpenAI “cares about journalism” and that it’s “important to foster democracy.” Lightcap “was really listening to our perspective and listening to our concerns,” says Fadlallah, adding that “the concern was that they are providing a content creation machine that is really threatening our business model.”.In December the two companies reached a broad agreement whose terms, Bloomberg News reported, include OpenAI paying Axel Springer tens of millions of dollars over three years to license content that it can use to train its AI models. OpenAI will also feature the summaries of Axel Springer’s news articles directly in ChatGPT, along with attribution and links to full articles..The deal provides a road map for additional media deals. OpenAI says it’s in talks with dozens of other publishers; Bloomberg reported that those include CNN, Fox and . OpenAI also says it will change the user interface of its current ChatGPT app to show more summaries and links to news from Axel Springer and other media partners..Lightcap hasn’t convinced everyone that the deals OpenAI is offering are good ones. The had been engaging with OpenAI in what the startup had called “productive” conversations last year, but on Dec. 27 the newspaper sued OpenAI and Microsoft Corp., OpenAI’s largest investor, saying that their copyright infringement was causing billions of dollars in statutory and actual damages. OpenAI is contesting the claim; Lightcap describes the dispute as an anomaly and says the rest of the company’s talks with publishers are going well..Media deals and copyright litigation will likely remain among the central challenges in building OpenAI’s business, but they’re not the only ones. Altman has described the company as “the most capital-intensive startup in Silicon Valley history.” The computer hardware costs to keep ChatGPT running could exceed $500 million annually, according to an estimate by Dylan Patel, chief analyst at consulting firm SemiAnalysis. He estimates that OpenAI’s annual costs to train its next model are in the “lower billions.” OpenAI has an estimated annual revenue of $1.6 billion, according to a December report from the . The company declined to comment on its revenue and costs..Patel says that as OpenAI seeks to build bigger models with even more data, its computing costs are only increasing. “If their mission wasn’t literally to make the machine God, to make artificial superintelligence that’s smarter than humans, then I think they could be profitable sooner,” he says. “But because they want to make something smarter than humans in every way possible and then deploy that rapidly in every way possible, that takes so much money.”.OpenAI’s business plan centers on charging customers for special versions of its products. In the past six months, Lightcap has helped oversee the expansion of new lines of revenue, including a business version of its consumer app, ChatGPT Enterprise, which now has more than 260 paying customers and 100,000 registered users. It’s also built an online store—akin to Apple Inc.’s App Store—through which developers can distribute customized apps, or “GPTs,” that use OpenAI’s software..But competition is stiff and likely to get even more so. Google, for instance, has its own large language model, a cloud computing network to support it and a large team with years of experience in enterprise sales. Lightcap says OpenAI’s main advantage is its ability to get products to market and incorporate feedback quickly..Like many startups, OpenAI says developing its technology takes priority over short-term revenue. But the outcome of the AI arms race also hinges on how the company and its competitors develop the businesses around their technologies. Lightcap acknowledges that he hasn’t figured it all out. “There’s a lot of areas where there’s huge opportunity, but we still don’t quite know what the implementation model looks like,” he says. “Nothing is super predictable for us at this point. And I suspect that’ll be true for a while.”.Lightcap’s ability to endure uncertainty was on display in November, when OpenAI’s board briefly ousted Altman, a period some at the company now refer to as “the blip.” While working with other executives to soothe employee anxiety, he also attempted to reassure customers by personally calling about 40 of them over the course of two days..“I didn’t want time to pass between the things that people were reading in the news and when they heard from us,” Lightcap says. “Our priority was making sure people know we’re here, we’re on top of it—that our services are stable and the company is in good shape.” He says the business didn’t lose a single customer. “I really saw the best of Brad through that,” Altman says..One of OpenAI’s newer areas of focus is semiconductors. Bloomberg reported that Altman has traveled to South Korea to tour manufacturing plants as the company considers expanding its partnerships in the chips business, including potentially setting up a network of factories to manufacture semiconductors. This could take years and is arguably an even more complicated challenge for Lightcap than his recent endeavors into the media industry..Lightcap declines to comment on OpenAI’s hardware plans, saying they’re trade secrets. But juggling so many projects in an industry that his company is essentially willing into existence is “the fun of the job,” he says..“Some of those things are things that we have to do today. Some of those things are one-year things, some of them six- or five-year things,” Lightcap says. “And I’d like to think I’m good at being able to translate that into concrete action.”.(Corrects wording ofSamir Fadlallah’s quote in paragraph 7.).More stories like this are available on bloomberg.com.©2024 Bloomberg L.P.

OpenAI's Secret Weapon Is Sam Altman's 33-Year-Old Lieutenant

Brad Lightcap helped seal the startup’s deal with publisher Axel Springer. Now he’s experimenting with the company’s business model.

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OpenAI's Secret Weapon Is Sam Altman's 33-Year-Old Lieutenant

Brad Lightcap helped seal the startup’s deal with publisher Axel Springer. Now he’s experimenting with the company’s business model.

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