All Newspaper editorials in one place – January 13, 2024




January 13, 2024

Robust revenues

Strong direct tax receipts create a fiscal cushion and room for more reforms


With little under a quarter left in the financial year 2023-24, the government has met nearly 81% of its direct tax collection target. At ₹14.7 lakh crore, direct tax inflows net of refunds, as of January 10, were 19.4% higher than a year ago. Economists believe the exchequer’s net direct tax kitty will end up surpassing the Budget estimate of ₹17.2 lakh crore by about a lakh crore if not more, with the full-year growth settling at around 18%. With Goods and Services Tax inflows also likely to beat the Budget math and non-tax revenues bolstered by a generous dividend from the central bank, overall revenues are likely to go beyond Budget hopes despite a relatively tepid intake from excise duties. Within direct taxes, corporate taxes have grown 12.4% while personal income taxes have yielded 27.3% higher revenues and this dichotomy may persist in coming years with the number of income-tax returns filed this assessment year hitting record levels (8.2 crore by December 31).


The healthy revenue uptick and appreciable widening of the tax filing base offers some comfort for the government’s fiscal consolidation hopes going forward, amid apprehensions that this year’s deficit target of 5.9% of GDP may be missed by a small margin. It also creates room for the Centre to undertake more reforms in taxation with a focus on simplifying it further for corporates and individuals. For instance, the multiple withholding tax rates for firms, that often lead to disputes, can be minimised to a handful of lower rates, if not one. Tax deduction and collection at source (TDS and TCS) rates, including the much-debated levy to track overseas spends, may be brought down a few notches — the taxman can continue to derive intelligence from them, irrespective of the rates. The new exemption-less personal income tax regime with lower rates and paperwork is gaining traction. Yet, the government can mull some mechanisms to nudge people into better life choices aligned with public policy goals that can also deepen financial markets and strengthen macro-fundamentals — encouraging retirement savings and health insurance, for instance. The 18% GST levy on health insurance must also be reconsidered, even as a broader rationalisation of GST rates is awaited, as it entails significant costs for lower- and middle-income households who face a real risk of slipping into poverty in the aftermath of a health-care crisis for a single member. Finance Minister Nirmala Sitharaman has signalled the Interim Budget 2024-25 will have no spectacular moves, so a repeat of the 2019 pre-election exercise that rejigged income-tax slabs may be unlikely. But the revenue buoyancy must enthuse policymakers to keep more reform options on the table for the new government to consider.





January 13, 2024

Numbers game

Factors affecting general improvement in sanitation must be overcome


For the eighth year running, the Centre has announced the Swachh Survekshan Awards, its annual exercise of awarding cities, towns and States which have performed impressively on various parameters of public sanitation. In an exercise that has now become predictable, the city of Indore, in Madhya Pradesh, has been adjudged India’s cleanest city for the seventh year in a row. The only change is that this year, it has to share honours with Surat, Gujarat. Last year, Surat came second, which is not surprising as it usually occupied the higher echelons of the ranking ladder in earlier editions. Bhopal, Indore, Surat and Visakhapatnam have entrenched themselves over the years. There is a certain volatility beyond the top 10 — Ahmedabad, Chandigarh and Gwalior, for instance, are volatile cities — but the top cities are consistent. All of this is suggestive of a degree of stagnation.


Another quirk of the survey is that it creates multiple sub-categories, so that many more cities have a chance at top-scoring in some category or the other. Thus, while it is meaningful to create sub-categories based on population, some classifications stretch credulity. Mhow in Madhya Pradesh has been awarded as the cleanest ‘cantonment’ town. Varanasi and Prayagraj are proud winners of the ‘Cleanest Ganga town’ and Chandigarh is the cleanest ‘Best Safaimitra Surakshit Sheher’ (Cities safest for sanitation workers). Other than obvious criticisms of parochialism — why for instance cannot there be the cleanest Cauvery or Narmada town? — it ends up focusing too much attention on the top. The underlying principle of several ranking schemes put in place by the Centre is to ‘motivate’ sections — cities, villages, schools — to pull themselves up on their own mettle. While this works well for sporting contests, public sanitation is not something that is the result of a town or city actively choosing to be lazy or industrious in improving themselves. It is heavily influenced by their history, economic conditions and proximity to power. That a few cities are perpetually at the top means that there is less attention paid to the factors that hinder a general improvement in sanitation. One way to make future editions of the survey work as a useful barometer of progress is to acknowledge that consistent toppers have already put in place a well-oiled system and having done so, retire them from future rankings for a few years. This will throw focus and highlight challenges that stymie other cities. For civic sanitation to remain a sustainable movement, it is high time that the government intervenes and prevents it from being a numbers game.




January 13, 2024

Matter of interest

Inflation edges upwards, in line with expectations. RBI must provide forward guidance on possible trajectory of rates


DATA RELEASED BY the National Statistical Office on Friday showed that retail inflation had edged marginally upwards last month. As measured by the consumer price index, it rose to 5.69 per cent in December, up from 5.55 per cent in November, driven largely by higher food inflation. This increase was expected. In his statement on the last monetary policy committee meeting, RBI Governor Shaktikanta Das had noted that the “the near-term outlook, however, is masked by risks to food inflation which might lead to an inflation uptick in November and December.” Das had cautioned that “this needs to be watched for second round effects, if any.”


The disaggregated data shows that the consumer food price index rose to 9.53 per cent in December, up from 8.7 per cent in November. Within the food basket, inflation remains elevated in cereals, vegetables, pulses and products, sugar and spices. As per analysts, the outlook for some of these items like rice, wheat and pulses remains uncertain. However, core inflation, which excludes the more volatile components such as food and fuel, has moderated further. Alongside, data also released by the NSO showed that the index of industrial production slowed down to just 2.4 per cent in November, in part, due to the base effect. For the first eight months of the year (April-November), industrial output is up 6.4 per cent.


In a few weeks from now, Finance Minister Nirmala Sitharaman will present the interim Union budget A few days later, the monetary policy committee of the Reserve Bank of India will meet for the last time this financial year. In its last meeting, the MPC had voted to maintain the status quo on both rates and stance, as it decided to remain focused on the “withdrawal of accommodation to ensure that inflation progressively aligns to the target”. In his statement Shaktikanta Das had said that “the target of 4 per cent CPI is yet to be reached and we have to stay the course.” However, in an interview to this paper, MPC member Jayant Varma recently said that “we are approaching the point where an interest rate cut is necessary to prevent an excessive real interest rate.” Varma argued that monetary policy can be “less restrictive” if there was expectation of inflation nearing the central bank’s target of 4 per cent. The RBI has projected inflation to moderate from 5.2 per cent in the first quarter of2024-25 to 4 per cent in the second quarter and 4.7 percent in the third quarter. Considering that the US Federal Reserve has also hinted at the possibility of rate cuts next year, in its coming meetings, the MPC should provide some forward guidance on the possible trajectory of interest rates.




January 13, 2024

Healthy new year

Decision to inoculate against cervical cancer is welcome, could help root out a major disease that afflicts Indian women


THE CENTRE WILL roll out vaccines for cervical cancer in the second quarter of this year. The campaign will begin once the government has a stock of 6.5-7 crore doses of the vaccine needed for the first phase of the inoculation drive. This is a significant and enormously welcome public health move. India accounts for a fifth of the world’s cervical cancer burden. It is the second-most common cancer among Indian women, after breast cancer. Cervac, an indigenous vaccine, developed by the Serum Institute of India (S1I), has been in the commercial market for about a year. The Pune-based company currently has an annual capacity of manufacturing 20-30 lakh doses. However, at Rs 2,000 a shot, the vaccine is expensive for a large section of the country’s population. Also, the overwhelming lack of awareness about the disease means that a mass inoculation drive is imperative to tackle the human papillomavirus (HPV) that’s responsible for close to 85 per cent of cervical cancer cases. The vaccination drive that will target girls in the age group of nine to 14 could be a game changer.


HPV is a common microbe. A combination of vaccination and screening facilities has stemmed its virulence in most developed countries. The global strategy encourages a minimum of two screenings of women by the time they are 35 and again by age 45. By all accounts, that doesn’t happen in India. In 2018, the National Technical Advisory Group on Immunisation recommended the inclusion of HPV vaccines in the country’s Universal Immunisation Programme (UIP). But the high costs of vaccines, then manufactured by the pharma multinationals Merck and Glaxo Smithkline, proved a deterrent — the regimen costs upwards of Rs 4,000. The UIP—it targets more than 2.5 crore newborns and nearly 3 crore pregnant women every year — has demonstrated the capacity to surmount difficulties that have kept young women from accessing the vaccines. It has especially been effective in overcoming the hurdles posed by the country’s traditional public health care deficiencies. India’s success in inoculating people against Covid is also well-known. The work during the public health emergency to bust myths around the shots could especially prove handy for vaccinators.


Cervac was approved by the Drugs Controller General of India in 2022 on the back of encouraging results in clinical trials — it generated an antibody response 1,000 times more than the baseline required against all HPV variants. SII’s admirable track record during the pandemic is ample proof of its capabilities to upscale production in a crisis. In the coming months, health authorities and the Pune-based institute will be keenly watched, with hope.





January 13, 2024

Andhra’s experiment

While the dressing room can be instructed to remain aloof to individual achievement, what about the fans?


THIS RANJI TROPHY season, the Andhra team, while pursuing its first-ever title, has set itself a higher goal. To be true to the spirit of a team sport, it has decided against applauding individual efforts. So in their first match of the season, when the batsmen reached a hundred, the Andhra dressing room reacted with spectacular silence. It was only after the team had taken the first-innings lead did a wild cheer thread through the stadium air. These sights and sounds have been unseen and unheard in a cricket ecosystem known to celebrate personality cults. Sunil Gavaskar, Kapil Dev, Sachin Tendulkar, Virat Kohli – India always had record-breaking cricketing icons but Team India lacked the intimidating aura of the West Indies back in the day or in present-day Australia. Andhra’s diagnosis seems spot on, but isn’t this a band-aid solution?


Most Ranji Trophy games these days are played in front of virtually empty stands with the proverbial old man and his dog being the only witnesses to the action on the field. To deny a domestic performer the few claps from his mates when he reaches a milestone is cruel. Those who play the sport at the highest level say that the “respect of the dressing room” is the ultimate acknowledgment of their skills. So when an entire squad stands up to applaud a fellow player, who took blows for the team on way to a personal milestone, the moment best represents the ethos of a team sport.


While the dressing room can be instructed to remain aloof to individual achievement, what about the fans? Sport isn’t just about the eventual result, it is also about the small sub-plots and the many personal storylines. A stunning dive or a breathtaking catch all add up to make a match-day outing a life-long memory. While Andhra can continue with their little experiment, Indian cricket’s bigger stakeholders need to rethink. They need to stop selling team games as individual face-offs. After every India loss, or even Mohammad Siraj’s six-wicket haul, they need to stop showing reruns of Kohli’s hundreds.





January 13, 2024

Red Sea, Code Red

US action on Houthis needed & risky. Question for India


Strikes unleashed on Houthi targets in Yemen by a US-led coalition were predictable. Earlier, they had issued an ultimatum to Houthis to stop attacking commercial vessels using the Red Sea route. Their warnings were ignored and a response to breaching a red line was inevitable. Of greater worry are increasing risks that the collateral firefights of Israel-Hamas conflict can spiral out of control.


Red Sea theatre | US military estimated that Houthis have carried out 24 attacks on commercial shipping since mid-November. It has pushed up sea transport costs and marine insurance. Red Sea is the shortest seaborne route connecting Asia and Europe. Roughly 15% of global seaborne trade passes through it, which includes oil, LNG and food grains. The alternate route is around South Africa, which can increase shipping time by 7-20 days. The outcome of Houthi attacks is that spot market prices for 40-ft containers from China to Rotterdam increased 115% over a week to $3,577 on January 4.


Conflict can spread | Hopefully, US strikes will act as a deterrent and cap the damage. However, there’s also the chance that it can drag Iran directly into the conflict, which will affect the critical Persian Gulf shipping chokepoint.


India can’t ignore it | India is an interested party as ensuring safe navigation through Red Sea is of direct economic interest. Also, Indian sailors are employed on commercial vessels flying other flags. So far, India has avoided direct involvement. But in its own interest, India may soon have to support the US-led coalition seeking to enforce freedom of navigation.





January 13, 2024

Clean Up Your Act

Swachh index has the dirt on our municipalities


Swachh survey of city cleanliness merits close reading. It isn’t so much about rankings, though competition may spur action, but about the big-picture review it provides of urban local body (ULB) performance.


Measures | Cleanliness, city report card, was measured on 8 major indicators: waste collection door-to-door, segregation at source and processing, dumpsite management, and cleanliness of residential areas, markets, public toilets and water bodies.


Growing up dirty | Our cities are expanding rapidly. Further you move away from city centre and government areas, uglier the growth – haphazard, uncaring, dirty, congested. The rankings bear this out.


Money & people | Of urban areas surveyed, 466 cities had over 1 lakh populations. How ULBs operate is a function of resources – people and funds – vis à vis the population they cater to. In Delhi, NDMC that caters to a population of 2.6 lakh (Census 2011) has an all-India rank of 7, while MCD for rest of Delhi, a population of 1.3 crore, ranks 90. No surprises that where MCD tanked was in cleanliness of residential and market areas, and dumpsites “remediation”.


Read the layers | Bengal results are worrying. Thirteen cities have fared badly. Its best performer Baidyabati, ranked 426, does well on some parameters but is yet to process its waste. Similarly, Arunachal’s Itanagar, 431 of 466, is yet to start working its waste, segregation to processing, but its residential areas and marketplaces are ranked clean. Indore, with 19.9 lakh population, has held its own. Cleanliness is institutionalised. Those blanching at their rankings should see how Indore did so, instead of raising a stink.




January 13, 2024

TikTok’s Techtonic Shift Attempt in US

Will America push the buy button in micro-videos?


Social media platform TikTok — banned here in India since 2020 along with more than 100 other Chinese apps — is making its most ambitious effort to move US consumers over to social commerce. If the endeavour succeeds, it could aid the creation of super-apps that US tech majors have been wary of. TikTok is seeking new revenue by merging the product discovery capacity of social media with ecommerce capability. This has been wildly successful in Asian markets, but has found few takers in Europe and the US because of the cultural differences in consumer behaviour. Selling products through live streaming is a more collective experience and draws its power from affirmation by co-buyers and the individual salesman’s ability to influence buying decisions. Digital consumers in Western markets behave differently, preferring Amazon’s marketplace, where they can make quicker choices from among a greater variety.


This difference is fed by the way technology evolved in the US and China. American investors frown on over-diversification, its antitrust regulators occupy themselves with data collection, and its consumers are sceptical about large corporations. This has kept Big Tech in silos such as search and instant messaging. Denied access to US technology, most Chinese consumers beginning their digital journey on mobile phones gravitated towards super-apps that offered everything from credit to video sharing. Chinese tech companies used the rich data haul to scale up.


The situation is changing in both markets. Chinese rules on using data have toughened, and Elon Musk has talked of making microblogging site X an everything app. Newer generations of US customers are mobile-first and concerned about app bloat from stores run by Apple and Google. Mobile browsing allows a more seamless experience that aids social commerce. Brands are incorporating influencer-driven channels into their marketing strategies. Adding a buy button to a video, the most powerful medium for marketers, is a logical conclusion. TikTok just might get Amazon and Instagram to revive plans to integrate social media with ecommerce.





January 13, 2024

Mental Health Gains Material Wealth


Earlier this week, Amaha, a mental health startup, announced that it has secured ₹50 crore in an extended Series A funding round led by Fireside Ventures, with other angel investors contributing ₹15.6 crore. The Mumbai-based company plans to use this funding to expand its treatment and care plans for anxiety, depression, bipolar disorder, ADHD, OCD, schizophrenia and addictions.


India’s mental health landscape is worrying. According to WHO, 10.6% of the population suffers from mental health issues. The prevalence is higher in men than women, and urban residents are more prone to such ailments than their rural counterparts. The treatment gap — the difference in the proportion of people who have a disorder and those individuals who receive care — for mental ailments ranges from 28% to 83%, and a government facility, which is mostly underequipped, is the commonest source of care. While the National Mental Health Policy 2014 and the Mental Healthcare Act 2017 call for universal access to quality services and protection of the rights of affected people, there is serious shortfall of doctors, counsellors and facilities. Startups such as Amaha, Wysa, Evolve, Kaha Mind, Manah and Trijog are trying to fill this gap, and using innovative tech-led solutions.


While social stigma remains a challenge, awareness is rising. People are seeking professional help. According to the UnivDatos market research report, the Indian mental health market is expected to grow at a substantial CAGR of 15% between 2022 and 2028. Currently, around 280 mental health startups operate in India. The emergence of this support framework is a positive development. However, in the competition to attract subscribers, quality of services should not suffer.




January 13, 2024

Disinvestment dividend

Centre should capitalise on PSU turnaround


Central Public Sector Undertakings (PSUs) have been delivering an unexpected bounty to the exchequer in recent times. Their dividend payouts have been overshooting targets, even as the Centre’s disinvestment proceeds have been stalling. This newspaper recently reported that dividend receipts from central PSUs topped ₹59,000 crore both in FY22 and FY23 against budget estimates of ₹43,000 to ₹46,000 crore. Disinvestment proceeds for the same years, at about ₹13,500 crore and ₹35,200 crore, respectively, were way below targets.


Trends in FY24 are similar, with disinvestment receipts barely topping ₹10,100 crore so far, even as dividends at ₹43,843 crore are already ahead of the target. Rising dividend payouts are the direct result of a material improvement in the profitability of PSUs, with the BSE PSU index constituents seeing their profits expand over 150 per cent between FY18 and FY23. While the economic rebound post-Covid provided tailwinds to cyclical businesses, deleveraging, planned capex and order flow from the Centre’s infrastructure and Make in India initiatives have added to this. The stock markets have taken note, with the BSE PSU index returning 37 per cent annualised in the last three years compared to the Sensex’s 14 per cent. While the Centre may be tempted to put disinvestment on the back-burner to enjoy this dividend bounty, this is actually an opportune time to give the programme a fresh lease of life.


The Centre should consider two interventions to ensure that the recent shift in investor perception of PSUs sustains. A key reason why stock market investors have traditionally shied away from PSUs is the lack of visibility on their long-term business plans. Of late, government announcements of investment and renewal plans for defence and the railway PSUs have offered such visibility and driven a sharp re-rating of these stocks. To retain these gains, the Centre needs to follow through on its announcements. PSUs in sectors such as oil and gas and banking would also benefit from similar long-term roadmaps. While PSUs have been anointed Maharatnas and Navaratnas on paper, their actions suggest that they are still attached to the apron strings of their promoter. To change this, PSU Boards need to be granted true operational and strategic autonomy. The latest Excellence Enablers report noted that large PSUs had demonstrated improved governance in terms of larger and more diverse Boards and more independent directors in 2023. But PSU appointment policies need to be tweaked to ensure more skin in the game for top managers.


Governments at the Centre have looked at PSU disinvestment as a last resort to raise revenues for the Budget. Private sector promoters have perfected the art of timing their public offers and Offers for Sale to fetch the best possible valuation for the seller. None of them divest stakes in a sector downturn just to meet a deadline. The government needs to be market-savvy and keep disinvestment out of the annual Budget exercise.





January 13, 2024

Vying for investments

Investor summits signify competitive federalism, but the Centre must ensure no state loses out


THE 10TH VIBRANT Gujarat Summit concluded on Friday with investment pledges of f 26.3 trillion, a little more than the gross domestic product (GDP) of the coastal state. Earlier in the month, Tamil Nadu’s Global Investor Meet (GIM) yielded commitments of Rs. 6 trillion. Last February, Uttar Pradesh flaunted investment promises to the tune of Rs. 33.5 trillion, or 1.6 times the size of its economy, after a similar meet. States organising such summits to lure domestic and foreign investors has been the norm for the last two decades, though the origin of these now-regular events is traceable to the economic liberalisation of the 1990s.These summits are exemplars of competitive federalism in a diverse country. Though only a fraction of the promised investments eventually materialise, beckoning investors in this manner has acknowledged utility in a world where supply chains are being overhauled. Moreover, the recent summits are marked for investments in frontier areas—solar modules, wind turbines, hydrogen electrolysers, lithium ion storage, semiconductor wafers, etc. This is unlike the past, when assimilation of new technologies in the country was inordinately delayed.


As centralised planning is replaced by a largely market-driven development model, states and city governments have to compete to spur economic growth and development. States like Maharashtra, Karnataka and Gujarat lead in investments, but Telangana and tiny Chandigarh too punch above their weight, while more populated ones like Bihar lag. In these times, therefore, states have a compelling reason to guard against scarce allocation of (national) resources, given that non-government actors have a rapidly increasing role not only in the markets of manufactured products and services, but also in the deployment of finance capital, creation of fixed assets, and even in appropriation and utilisation of natural resources. This inevitably means each state or urban body is free to offer fiscal and other incentives to attract investors, including easier approvals and a cordial front-line bureaucracy. However, the spirit of competitive federalism would have the desired wholesome outcome only if the state governments are duly empowered.


Regional disparities cannot be addressed without the Centre being a neutral arbiter. To be sure, the Narendra Modi government has created a comprehensive template for gauging the states, on various parameters. But the development polices and resource allocations are yet to be fully in consonance with what these objective assessments bring to the fore. Policies and programmes must be tailored to address regional deprivations, while retaining incentives for performance, and being mindful of the differences in needs.


The scope of private investors bridging the country’s infrastructure deficit is limited. While the Rs. 111 trillion National Infra Pipeline (FY20-FY25) was envisaged with a 6:4 investment ratio between the government and the private sector, it is now clear that the target would be missed by a wide margin, mainly because private investors looked the other way. The Goods and Services Tax has created a pan-India market, and reduced the scope for tax arbitrage as a tool to promote regional investments. Natural resources—the sun, land, water, wind, coastline, soil fertility, minerals—vary across states, and so does labour productivity. So, to provide a level playing field to states for industrial investments, public funds need to be more judiciously invested to build physical infrastructure, and ensure harmonious social development.




January 13, 2024

Sam Altman’s Al juggling act looks dicey


SAM ALTMAN HAS a sensible, self-imposed tradition of writing a to-do list at the start of every year, jotting down all the things he wants to accomplish. This year’s memo will feature a not-so-smart number of items. The OpenAI chief risks spreading his talents too thinly.


In addition to running the world’s leading artificial intelligence company, Altman is committed to several mind-bendingly ambitious projects. He’s working with Jony Ive, Apple Inc.’s former lead designer, to put AI models into new hardware devices, most recently hiring another former Apple executive for the new company. He also plans to start a new AI chip firm to compete with trillion-dollar market leader Nvidia Corp. Both projects will cost billions of dollars, so Altman has sought funding from those with the deepest pockets, including Masayoshi Son and Middle Eastern sovereign wealth funds. All the while, he’s been running Worldcoin, a crypto project that aims to scan the eyeballs of billions of people.


These are exciting projects that reflect Altman’s tendency to swing for the fences. But the visionary who’s become synonymous with OpenAI risks spreading himself too thin in what could become a ferocious year for the company.


Among the urgent issues that need tackling: a string of lawsuits alleging copyright infringement, as well inquiries from both the US Federal Trade Commission and European regulators into OpenAI’s close ties with Microsoft.


Altman also has to manage the fallout of a boardroom coup that briefly ousted him late last year. He may have won back his position as chief executive officer, but he still needs to work on regaining the loyalty of his clients. Executives at Walmart Inc., for instance, were so shaken by the leadership drama that they told managers to avoid going directly to OpenAI for AI tools, according to the Wall Street Journal. Several other firms who’d signed up for the company’s services found themselves in a state of confusion after the coup, prompting some to diversify.


OpenAI’s own staff need some more attention too. While nearly all of them signed a letter supporting Altman’s reinstatement during the coup, many were financially motivated. That means they might not stay for the long haul. OpenAI’s success until now had been so remarkable because of how small its research staff were-in the low hundreds, versus the armies of thousands at Alphabet Inc. and Meta Platforms Inc. That makes their continuing dedication to OpenAI all the more crucial.


But it will be hard for Altman to demand loyalty from his staff if he isn’t being entirely faithful himself. And running multiple companies often doesn’t workout. Elon Musk currently leads six companies, including Tesla Inc., SpaceX and X (formerly Twitter), and the latter has suffered the effects of a capricious leader stretched beyond capacity, with its value having dropped by two-thirds since Musk’s 2022 purchase, according to one of his backers. Other CEOs have grappled with running just two companies, including Jack Dorsey’s simultaneous leadership of Twitter and Square (which became Block), or Carlos Ghosn’s steering of both Nissan Motor Co. and Renault SA. Dorsey’s double management stint didn’t last long, and Ghosn ended up an international fugitive.


Multi-tasking can sometimes work – as it did for Steve Jobs when he ran both Apple and Pixar. Harvard Business School Professor Andy Wu argues that Silicon Valley is fomenting a new breed of CEO who acts like a caffeine-guzzling puppet master, coordinating multiple companies and side hustles at once. “The traditional notion of a conglomerate is being transformed” to look more like a loose collection of firms surrounding a single figurehead, he says.


But making that work at a trying time for OpenAI seems risky. It’s natural that the success of ChatGPT fuelled Altman’s confidence, as did those few extraordinary weeks last year when the 3 8-year-old became a globetrotting diplomat for AI, charming government leaders around the world. Altman has a natural inclination to help start companies, having been a long-time adviser to and one-time leader of the startup accelerator Y Combinator. But as he juggles an array of new business ventures, he’d be wise to curb some of those ambitions. He’s turned OpenAI into an exceptional company – but his legacy may still be ruined.