Sam Altman - The Man Who Owns Silicon Valley

Key Takeaways

I'm Sam Alden I'm the co-founder and CEO of loot this is Sam Altman he's only 19 here and he just dropped out of college little did he know that one day he would change the world I think history belongs to the doers Sam Altman is the CEO of open AI he hosts investments in over 400 companies and his decisions literally decide the future of humanity one billionaire described him as having such a force of will that he's going to get whatever he wants so how did he become so powerful how did he go from a broke college student to the founder of the world's fastest growing company this is the story of Sam Altman I think people have terrible risk calculus absolutely delusional level of self-confidence but basically I thought it would go exactly like this you see a lot of entrepreneurs shoot themselves in the foot they're just not aggressive enough Sam Altman was born in 1985 as the youngest of three siblings he got his first computer when he was eight but the crazy part is that he already knew how to program it Sam went to a prestigious private school and there he was a talented debater which refined his communication skills an essential trait of a great CEO his first side hustle was building websites for local businesses and non-profits however what Sam did next would change the trajectory of his life with his work ethic and intelligence he got himself into Stanford one of the best colleges for ambitious sharks like Sam but he wasn't the only prodigy at Stanford two other future billionaires were there at that time Evan Spiegel the founder of Snapchat and Kevin Systrom the founder of Instagram during one summer Sam Altman almost became an intern at Goldman Sachs but he later changed his mind because he found Investment Banking super boring at this point he was already two years deep into stand effort but despite being a great student Sam knew he was wasting his time and so at the age of just 19 he dropped out and convinced two other classmates to drop out with him he founded his first startup looped a mobile app that connected users based on their location looped caught the attention of Paul Graham A Silicon Valley billionaire and the creator of Y combinator Paul Graham immediately recognized the potential of young Sam and called him the best founder in the Bay Area putting him on the same level as the world's greatest leaders such as Sergey Brin Larry Page and Steve Jobs Sam Altman's looped was the first ever company to be founded by y combinator alongside startups like Reddit each founder received six thousand dollars which doesn't sound like a lot but for broke college students that's everything at its peak looped reached a 175 million dollar valuation but it struggled to grow further so in 2000 2012 Sam Altman decided to sell the company for 43 million dollars this was one of the biggest Acquisitions of a social networking app at the time and Sam worked away with a cool 5 million dollars in his pocket with millions in the bank and nothing to do Sam decided to travel the world race supercars and fly airplanes all across California typical millionaire stuff he liked racing cars so much that he even bought two McLarens most people in his position would buy a nice house in San Fran and retire but Sam isn't most people he was hungry for more and so he returned to the valley and became a venture capitalist however he hated the VC life because it didn't give him the same kind of adrenaline as running his own company that's when Paul Graham gave him an offer he couldn't refuse he told Sam that he could join y combinator as a partner Not only would this allow him to learn first hand from Paul Graham but Sam could also do what he loved most build new startups this is where his work ethic really started to shine he was so good at recognizing promising startups that after just three years of being a partner Paul Graham decided to make him president of Y company you've made him the president of Y combinator yeah he is going to be the boss Andre Sam Altman's leadership YC prospered his strategy was to invest in startups working on promising and world-changing ideas basically no boring ideas allowed why see massively increase the amount of companies they invested in this ruthless investing strategy attracted the attention of the billionaire Mark Andreessen Altman's business moves impressed him so much that he said quote under Sam the level of why combinator's ambition has gone up 10x the craziest part is that these are the words of a competitor because Andreessen has his own VC firm just goes to show how respected Sam Ultron is he wanted the best deals possible and so he began interviewing everyone while other investors only talk to people who had connections in the startup World YC started doing the exact opposite as long as you had a business idea you could get an interview this open doors approach resulted in over 40 000 applications a year which is a sickening amount of interviews but hey the strategy worked because under Altman's leadership why is his portfolio grew to a combined valuation of over 100 billion dollars now you're probably thinking David why is Sam Altman so good at investing well here are his top three investing principles number one focus on the founders number two solve real problems and number three think long term despite having an incredible career at y combinator Sam Altman was looking for the next big thing he knew his potential was greater than simply being a startup investor he was still hungry for more and in February of 2014 he found what he was looking for he spotted the next big wave and that was artificial intelligence but this wasn't just a midwave AI was a tsunami and Sam was more than ready to ride it out today it's kind of obvious but back then it was considered a failed science however Sam thought that most people were too pessimistic about Ai and he knew that it would be the biggest development in technology ever and so Sam decided to go all in he teamed up with Elon Musk to start a new AI company however they quickly ran into an issue see back then the industry was very different there weren't hundreds of different businesses like there are today instead 75 of all Talent was at Google essentially Google had a monopoly on the best AI Engineers when openai was created it did shift things into it from unipolar world where Google demand controlled three-quarters of all AI challenge but that wasn't gonna stop Sam and Elon from launching their own company so they organized a private dinner and invited the best AI people they could get their hands on the mission of the company was to ensure that artificial intelligence benefits all of humanity and with Sam Altman as the CEO open AI went on a hiring spree they made a list of the 10 best researchers and were able to hire nine of them that's because openai offered really good salaries the best people are so much better than the pretty good people taking a page from Sam Altman's book I'm gonna ask you a question do you fall into the category of best people and would you like to join me in building the biggest AI Channel on YouTube If so fill out my hiring form first link in the description hiring great Engineers was only the first of many problems Sam Altman and open AI had to overcome by far the biggest issue the company faced was money turns out that it's really hard to attract Capital as a non-profit organization luckily they had an ultra Rich individual as one of their Founders yeah I'm talking about Elon Musk who promised to contribute one billion dollars so that's the money problem solved right not quite things didn't go as planned Elon and Sam had some disagreements over the company's future which resulted in Elon leaving open AI in 2018. this was a true low point for openai not only were they running out of money again but they lost one of their most important Founders Sam Altman did all he could to attract new capital and talent but every single investor turned him down openai simply needed too much money for a non-profit this left Sam with only one option pack his back hop on a flight to Seattle and meet with Satya Nadella the CEO of Microsoft the result of that meeting we are very excited to announce a strategic partnership with open AI this changed from a non-profit status was badly criticized by the public some argue that it goes directly against the original Mission of the company to be fair open AI has kept the amount of profit that investors can make however that cap is 100x the investment which isn't far from being completely uncapped the reason Sam Altman chose to partner with Microsoft wasn't just because they were willing to put up the billion dollars but also because Sam liked Satya Nadella I think most CEOs are either great leaders or great managers and from what I have observed with Satya he is both with the support of a trillion dollar Company open AI was in a better place than ever and this is where the team really started to shine in 2018 gpt-1 released it was okay but it wasn't mind-blowing or anything the year after that Sam Altman decided to step down from the position of chairman at Y combinator and to fully focus on open AI this was a really hard decision to make he's been there for over seven years and that company gave him everything from funding his first startup to helping him grow as a leader to eventually having him as the president however Sam knew that if he wanted open AI to achieve its fullest potential he needed to go all in and it clearly paid off that same year open AI released the gpt2 language model it was significantly better than gpt1 in fact gpt2 was so good that it even impressed Jeffrey Hinton The Godfather of artificial intelligence gpt2 which was one of the earlier language Brands amazed me but the biggest breakthrough was yet to come in 2020 open AI released its best product yet gpt3 it could generate new text summarized existing text and even translate to all kinds of languages another huge breakthrough was the creation of Dali the first version was released in 2021 and it proved to the world that AI wasn't just good at text Dali demonstrated impressive creativity it can generate images in all kinds of styles including cartoons photos and even abstract art as mind-blowing as daily was it was only the beginning openai next product would literally change the world Sam Altman had the idea to take gpt3 and put it into a simple chatbot however most of the open air Engineers including Craig Brockman himself forced that developing a chatbot for the masses wasn't worth the time and energy however Sam was convinced that it's going to work and boy work it did J GPT became the fastest growing product in history reaching over 100 million users in less than two months think about that for a second most people don't realize what this means the AI Revolution is here chair GPT provided a user-friendly interface that even the least tech savvy people could use the wild success of chair GPT not only proved that Sam Altman's intuition is freakishly good but it also cemented his name in the history of AI but who really is he so far we've only talked about his professional life so what does his personal life look like believe it or not about Sam is a Doomsday prepper he owns a nuclear bunker with a stash of gold guns and gas masks however his underground bunker isn't the only controversial part about his life in 2017 he wrote a blog post pointing out how political correctness and censorship was crushing the intellectual Spirit of San Francisco and I couldn't agree more Sam Altman also has an impressive personal portfolio which consists of over 400 companies Now That's What I Call diversification some of his best investments include Airbnb stripe Reddit Asana and Pinterest Sam is a passionate reader saying he reads over 100 books a year he also supported the effective altruism movement however after the whole FDX situation effective altruism is effectively a meme even though Sam Altman is already one of the most successful people on Earth he is pushing harder than ever in 2023 he convinced Microsoft to give openai another 10 billion to play with making openai worth over 30 billion dollars at this rate the company might hit a trillion dollar market cap soon another massive development was the release of gpt4 which can only be described as scary good it's already better than most humans at most things for example it's better than 90 percent of doctors GPT 4 scores 90 percent on the USMLE it's a 90 performing most doctors don't score 90 on the boards GPT is a ace doctor but with great power comes great responsibility and there are some serious risks involved with AI perhaps the most obvious is job displacement the skill sets of millions of people are becoming basically useless when these large language models can do it better faster and cheaper the best thing you can do is to learn as much as possible about AI so if you want to stay ahead make sure to subscribe by far the biggest issue of all is the problem of alignment we have to make sure that AI has the same goals as we do because if we don't it's very likely that the human race will not survive right now all of the major research Labs including open AI aren't giving this problem enough attention however Sam Altman is optimistic I think the AI has the potential to eliminate nearly all human suffering in the next couple of decades I think we can have a world of abundance we can eliminate poverty over time we can probably cure a whole lot of diseases there are all these wonderful things that technology can do the reason why Sam has achieved so much in his life is because he is a great leader this allowed him to become one of the most powerful people alive he's in control of a company with the most advanced Artificial Intelligence on the planet and it still feels like Sam Oldman is just getting started