Winners and Losers from OpenAI’s Wild Weekend

Winners and Losers from OpenAI's Wild Weekend

For a while this weekend, it looked like Sam Altman might return as a triumphant hero to OpenAI, the company whose board ousted him as chief executive on Friday.

It would have been another shocking twist in a saga that was already full of them. And Mr. Altman had a lot of influence. OpenAI employees had come after him following his dismissal and OpenAI investors were pressuring the board to bring him back. Billions of dollars – and, potentially, the trajectory of the entire AI industry – depended on the fate of the board’s decision, and many expected them to buckle under the pressure and reverse themselves.

Instead, the board rejected Mr. Altman’s return and confirmed in a memo to staff late Sunday that removing him “will preserve the Board’s ability to execute its responsibilities and advance the mission of this organization.” Was necessary for.” It appointed former Twitch boss Emmett Shearer as interim chief.

A few hours later, Microsoft Chief Executive Satya Nadella announced that Mr. Altman and his top lieutenant, Greg Brockman, would join the tech giant to lead a new AI research division.

The OpenAI saga is far from over. Things are changing rapidly, and there is a lot we still don’t know – including the reason the Board decided to fire Mr. Altman in the first place. (In the memo Sunday, the board said there was no specific incident that led to the firing, but rather that Mr. Altman had lost his trust.)

But even without much information about the inciting incident, we can begin to assess the damage.

The most obvious loser in all this is OpenAI.

Before Friday, the company was the hottest name in tech, with a celebrity leader, a household-name product in ChatGate, and a killer line of AI talent that was the envy of Silicon Valley giants. It was in the midst of a tender offering that allowed employees to redeem their stock at amazing valuations, and its cutting-edge AI language model, GPT-4, was best-in-class. Now, the company is in disarray. Its top leaders left. Morale is broken. The tender offer may be broken. The new chief executive has said he wants to slow down ai, And the company is still highly dependent on Microsoft, which needs vast computing power to run its models — and within which as of Monday will develop a mini-OpenAI, to be led by Mr. Altman and staffed by former OpenAI employees. ,

OpenAI’s board may be satisfied with this outcome – after all, they chose it even after being given the chance to withdraw. But they seem foolish in not explaining why they fired Mr. Altman, and until they share more information, it’s hard to imagine the rank-and-file falling in line.

No one’s weekend had a bigger change than Mr Nadella.

on Friday. When Mr Altman was ousted, it looked as if Mr Nadella might lose one of his most powerful allies. Microsoft invested $13 billion in OpenAI, and under Mr. Altman’s leadership, the company became a major partner of Microsoft. Its technology is the backbone of many AI services, such as the company’s Copilot suite of AI products, on which Microsoft is betting the future of its business.

Mr Nadella clearly would have liked to see Mr Altman reinstated. But when it became clear that wasn’t happening, they did the next best thing: Mr. Altman proceeded to offer jobs to Mr. Brockman and his loyalists.

Strategically it was a masterstroke. Now, Microsoft will be able to continue using OpenAI’s models to power its products in the short term, as well as provide a new, Altman-led team with the funding and computing needed to build new Microsoft-owned models in the longer term. Will also give strength. They’ll get a group of talented AI researchers from OpenAI, and Microsoft now effectively owns 100 percent of a new AI lab that any Silicon Valley venture capitalist would be willing to fund.

For years, a community of AI researchers and activists – many of whom are associated with the effective altruism movement, whose followers think logic and data should determine how to do the most good – have warned that AI systems are too powerful. are becoming so, and that out-of-control AI could pose an existential threat to humanity.

These feared people – sometimes mocked as “doomers” or “decels” by their critics – were once considered marginalized. But over the past several years, they’ve been moving toward the mainstream, collecting signatures on open letters and warnings to regulators to take AI safety seriously. And on Friday, he ousted the chief executive of the world’s leading AI company.

OpenAI chief scientist Ilya Sutskever, who led the coup against Mr. Altman, is not an effective philanthropist, but he appears to be motivated by similar fears. And two of the board members who supported the coup, Tasha McCauley and Helen Toner, have ties to Effective Altruist groups.

If Mr. Altman’s firing causes irreparable damage to OpenAI, people will blame the board for breaking up one of Silicon Valley’s most promising young start-ups and destroying billions of dollars in shareholder value.

But the board has clearly succeeded on its own terms. They were concerned that Mr. Altman was moving too fast to create powerful, potentially harmful AI systems, and they stopped him. It’s a victory for the cause, even if it comes at the company’s expense.

No one was pushing for Mr. Altman’s return to OpenAI more than the investors and venture capitalists who had backed him, and who stood to lose their money if he left.

Many of these investors are techno-optimists who believe AI will be good for society as a whole, and they liked Mr. Altman’s essentially optimistic outlook on the future of AI. (They also liked that it made them a lot of money.)

These investors now have a stake in a company with an interim chief executive, a rebellious workforce and an unclear path forward. What’s worse, the only way they can invest in Mr. Altman’s new company is by buying shares of Microsoft.

It is not yet clear whether Mr Altman’s departure will benefit rival AI companies.

On the one hand, companies like Google, Anthropic and Meta could benefit from a weakened OpenAI if it allows them to capture the company’s AI progress, or poach key employees. (recruiter wasted no time An attempt is being made to woo unhappy OpenAI workers on Friday.)

But this also means that they will face competition from the stronger Microsoft. And that means Mr. Altman’s new AI efforts won’t be hindered by a complex nonprofit governance structure like OpenAI’s, meaning he may be able to move forward even faster.

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