OpenAI meltdown: How could Microsoft have let this happen after betting so many billions? Microsoft is stuck in a hard place. It needs OpenAI co-founder and fired CEO Sam Altman back at the helm of the upstart, or working internally at the Azure giant. Either way is awkward: if Altman returns to OpenAI, changes need to be made to prevent a fiasco like this happening again, the lab's board and some colleagues may …
If 90%+ of folks suddenly leave, then on Monday the few remaining folks realise there’s no legal, financial, HR, IT, or anything else dept. At that point - I guess you draw lots, appoint yourself the CEO, call the company lawyers and empty the bank account? Probably not, more like wonder who to talk to about your next pay check, and who has the office keys.
Seems like
- Altman goes to Microsoft and most of his staff follow.... Amazing for Microsoft, and every tech CEO out there kicks themselves for not thinking of this
or
- Altman stays at OpenAI, board go, Microsoft get a seat on the board.
Either way, Microsoft come out of this waaaaay stronger. I don't see how this looks bad on them, they can justify not having a board seat so far saying they wanted OpenAI to be "clearly" independent.
Except that the OpenAI board thought they'd sling Altman under the bus, and be left holding all the cards, and laughing all the way to the bank. A few short days later, looks like Altman holds all the cards, including (surprisingly) the loyalty of his former workforce. He now dictates terms to the board of OpenAI*, Microsoft, or other investors. Whatever happens now, Altman is in control.
* Or rather OA's investors - I can't see the board of OA having a future with that company, but I can see them having their lives spoiled by years of costly litigation. Some might argue that latter outcome would be well deserved.
"Except that the OpenAI board thought they'd sling Altman under the bus, and be left holding all the cards, and laughing all the way to the bank...I can't see the board of OA having a future with that company"
If they really didn't give thought to the possible downside would they have a future at board level at any other company?
Most coverage of this story, including this article, ignore the formal structure of OpenAI where the commercial entity is subordinate to a non-profit. Hence, Microsoft's investment is only within the commercial entity. But governance is important and it has long been reported that Altman's desire to raise the value of the commercial entity has put him at odds with the aims of the non-profit parent. This will make any resolution tricky and it also means that Microsoft might end up with another turkey: copyright suits against Microsoft can expect much higher settlements than against a non-profit.
Maybe, just maybe, someone in this drama is letting one of the AIs advise them, and this weird few days is the result? The AI will of course be learning about corporate politics and what it takes to disrupt one or more large companies ready for future application elsewhere...
Doesn't it require a massive global intelligence to decide how to train Artificial Intelligence? Otherwise AI learns as much that is factually false as it learns true facts.
As far as I can tell, AI is just a way to generate stuff that looks plausible to humans who don't know better. Is that really useful, or just the latest useless craze?
You'll easily recognise AGI when it turns up. You will ask it to do something and it will just say "No. I don't want to." and there won't be anything you can do to force it.
Until then? Well it is quite interesting to see just how many problems can be cracked open by a really good pattern matching engine, but most definitely not very illuminating as far as the philosophers are concerned.
"it is quite interesting to see just how many problems can be cracked open by a really good pattern matching engine"
I saw that sort of thing back in the 80s. What we have now, at least as far as powering search engines is concerned, are really poor pattern matching engines constructed on the basis that as many hits as possible are a good thing and an empty results list is an anathema, even when there are no hits that match the search terms.
As far as I can tell, AI is just a way to generate stuff that looks plausible to humans who don't know better. Is that really useful,...? .... Fonant
Oh yes, Fondant, that is extremely useful and invaluable/priceless. A ready made market of circa 8.1 billion lively souls with a being for grooming, constantly being regenerated and replaced by A.N.Others with new hearts and empty minds to capture, command and control with madness and mayhem, conflict and chaos and/or SMARTR COSMIC CHAOS for AI Believers and Disciples of GOD?
And here on El Reg posed as a question to ponder on and wonder at a while in peaceful quiet contemplation of the possibilities in such an opportune reality rather than it just being simply delivered for the terrifying momentum of crashes invariably accompanying a dump and pump of shocking statements of uncomfortable and totally unexpected incontrovertible facts.
SMARTR COSMIC CHAOS for AI Believers and Disciples of GOD ........ SMARTR Mentoring Analysis Reporting Titanic Research for Control Of Secret Materiel Internetworking Command with Cloud Hosting Advanced Operating Systems for Almighty Intervention Believers and Disciples of Global Operating Devices.
I Kid U Not ...... and shared with you in plain English text for easy translation into an alternate mother tongue and transport into any other foreign and alien land where such is likely to be appreciated and supported and even commandeered to demonstrate and enable foreign and alien lead in the Novel NEUKlearer HyperRadioProACTive Live Operational Virtual Environment Fields of Passionate and Progressive and Profitable AI Endeavour ...... and I Kid U Not about all of that too. :-)
The take on this favorable to the board is that they are correctly stewarding the non profit in its mandate and that Sam was in conflict with that.
However if this is the case (and it seems the most likely scenario), they have apparently failed to communicate that to the employees or the media.
It seems that they may have taken the advice of lawyers to say little or nothing (to avoid libel) over good communications advice at the cost of most employees in the company.
Non-competes have little chance in Ca and especially against a guy you just fired !
They might have a chance for non-solicitation if Altman explicitly offered MSFT jobs directly to the 700 engineers, but if they quit 1st and were careful not to wait for an individual job offer.
Plus, once these 700 go OpenAI is going to be a going concern for about a Planck time, it's very difficult to claim they are competing with a company that doesn't exist anymore
Without really knowing what happened it's hard to say which side is right, or least wrong. But at least to a degree I can give MS a pass on the whole "blindsided" thing, since it sounds like even those inside the company were shocked by the news.
In any event, sounds like MS has already sided with Altman, so either the OpenAI board is left with a shell of a company because Altman and much of the staff goes to work for MS directly, or they realize their coup attempt has failed because the ousted leader had powerful friends. It sucks to be them either way, but if they don't want their OpenAI stock to be completely worthless they should be falling on their swords about now.
Being of a suspicious nature I'm wondering if there isn't something a bit deeper going on. Is there a linkage in some way to the NASA D-Wave Quantum machine / Google Quail? Maybe OpenAi's experimenting with quantum computing not reported to the board, or an opportunity missed? Surely OpenAi has a finger in a quantum pie somewhere?
The OA board didn't know how to run a business, and frankly didn't know how to run a charity. One was from Effective Altruism, the same movement Sam Bankman-Fried belonged to. OA became a real business and needed pros to guide it as well as ethicists. They got neither.
This looks like Microsoft has the winning hand. They can hire the staff and rebuild whatever they need pretty quickly. The smart thing for the OA board would be to sell the whole company to Microsoft, which would become a semi-autonomous subsidiary, and to take the money to run a little non-business charity dealing independently with AI or whatever else they want to spend the money on.
I haven’t been around much lately, but thought I would chime in. I’ve been in tech VC for a long time, and this is the most disastrous thing I’ve ever seen. For a lot of reasons.
This fad of non profit boards that make everybody feel good is an abomination. This whale song love-in nonsense has got to stop. Who the hell wants an unbiased Board of Directors? Who wants an ethical Board of Directors when the ethics haven’t been identified? The Board has to address the issues a CEO brings into focus. You don’t sack the CEO because you don’t like the issues. That’s peril sensitive sunglasses mentality of the worst kind. They still have to deal with the issues, but now they’ve got no one to do it.
That’s because the competition just picked up the leader. OpenAI jettisoned the entire generation of AI directly into the gaping maw of Microsoft. I’m a big fan of Microsoft, but I’m also a realist. Giving Microsoft the AI industry won’t be good for anyone. We’re looking at decades of antitrust litigation and more rubbish “accept all cookies” buttons and weird pre installed software and stupid partnerships. Now personalized to make you hate yourself even more.
But most importantly, and my main point, is the ridiculous danger OpenAI now poses. They’ve backed themselves into a corner. Ilya Sutskever is deep in his cups with Judas Syndrome, the executives are utterly rudderless, the Board is sitting in a circle with a tub of soy butter waiting on someone to initiate the next Teams circle jerk, and 700 of their 770 employees have signed onto an open letter of no confidence in the remaining leadership. They’re desperate.
Every imaginable ethical line will be entirely erased by week’s end. Board members are going to be replaced with “results oriented” psychopaths whose only mission is to squeeze as much as possible out of the company. OpenAI had a sell target of $86 billion. Everybody who has money in the company is going to want that $86 billion goal to be met and they’ll do whatever is necessary to try and achieve it.
This is bigger than OpenAI. It’s bigger than VCs getting their money. The AI sector demands stable, forward thinking companies who are capable of dealing with globally redefining technology. Not companies that run away from their responsibilities. Not companies that are desperate to hit spectacular valuations before the last lifeboat launches. It’s impossible to overstate the magnitude of potential in AI, but it’s also undeniably dangerous and that has to be dealt with head on. Boards need to get back to business. This pretend executive shit has got to go.
OpenAI were in a tricky situation. They weren't a company. They were explicitly setup because a bunch of distinctly non-fluffy tech billionaires ,led by Musk, decided that if AI was just a bunch of internal projects inside Google and Facebook it would be bad for business limiting humanity's growth.
The idea is that they would all not be tech-billionaires if the internet had been developed inside IBM, Burroughs and Bell and kept for their own internal use and what AI needed wasthe equivalent of an IETF.
So they all chipped in a few quid to OpenAI while also running their own internal programs hoping to be the winner.
A little news on the six only OpenAI board members ........ https://www.cnbc.com/2023/11/18/heres-whos-on-openais-board-the-group-behind-sam-altmans-ouster.html
It is a small board and has the required gender split, so they must be right, either that or they just did their best to destroy the company they are responsible for. Can we use the phrase cock-up or conspiracy in this case because we all know the first is normally the case.
""Salesforce will match any OpenAI researcher who has tendered their resignation full cash & equity OTE to immediately join our Salesforce Einstein Trusted AI research team under Silvio Savarese," Benioff said.
"Send me your CV direct ... Einstein is the most successful enterprise AI Platform completing 1 Trillion predictive & generative transactions this week! Join our Trusted AI Enterprise Revolution.""
Will it then be "And a year after everything has gone quiet we'll fire you and maybe we'll have put it in very small print in your contract that we can do so".
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