We initiated last year’s email by highlighting the success of OpenAI. Little did we know that the recent DDoS attack, data partnership revelations, GPT buzz, and ChatGPT Pro subscription pause due to overwhelming demand were just a prelude to the unfolding events.
In a shocking turn of events, Sam Altman, the co-founder and CEO of OpenAI, was promptly dismissed by the company’s board on Friday night. This decision came as a profound surprise as Altman had recently introduced ChatGPT, a consumer tech innovation experiencing unprecedented growth, steered the company towards a valuation exceeding \(85 billion, and enjoyed widespread popularity both internally and externally. Even Microsoft, a close partner with significant investments exceeding \)10 billion, was caught off guard when CEO Satya Nadella learned of Altman’s abrupt termination just before it was publicly announced in a blog post detailing the “leadership transition” without providing specific reasons.
The repercussions at OpenAI unfolded swiftly following this announcement. Greg Brockman, co-founder and chairman, resigned in solidarity after being ousted as president by the board, prompting top technical staff to follow suit. With backing from Microsoft, other investors, and tech industry leaders, numerous employees departed as a movement to reinstate Altman gained momentum. The situation escalated further when almost all 770 OpenAI staff members signed a letter on Monday threatening to migrate to Microsoft along with Altman if the board did not step down and reinstate the ousted executives. Subsequently, Nadella announced on Sunday evening that they would be joining Microsoft to lead a “new advanced AI research team.”
The future of OpenAI hangs in the balance as the board stands firm. These developments have significantly reshaped the landscape of AI, even if Altman and the departing employees choose to return to OpenAI. The implications could mark a pivotal moment for tech giants and rival AI startups, sparking intense competition for talent. While some hastily declared Microsoft the victor in this scenario, doubts linger.
Anthropic, which recently forged a partnership with Amazon for cloud services and received investments of up to $4 billion, unveiled Claude 2.1 today. Chaos ensued over the weekend as over 100 OpenAI customers reached out to Anthropic, according to reports from The Information. Some clients are exploring alternatives such as Cohere, a competitor, considering adopting Meta’s Llama 2, or contemplating a shift from Microsoft Azure to Amazon Web Services or Google Cloud for their cloud service needs.
When discussing the shift to Cloud and Anthropic, DSQ Solutions founder Charlie Dolan remarked, “We opted for OpenAI based on its perceived stability.”
As is customary in the tech industry, talent has swiftly emerged as a focal point amidst the upheaval. Google’s DeepMind has seen an influx of talent, while AI startups like Cohere and Adept are actively recruiting from OpenAI. Industry leaders such as Salesforce CEO Marc Benioff, Nvidia’s top AI researcher Jim Fan, and Inflection AI CEO Mustafa Suleyman are openly courting OpenAI experts and technicians, with many others likely doing so discreetly. Fan responded to a taunting comment by stating, “There’s no better time for it.”
In a podcast interview with journalist Kara Swisher recorded yesterday, Nadella acknowledged the fierce competition for AI talent and expressed his willingness to welcome all OpenAI employees to the new “advanced AI research team” led by Altman at Microsoft. He emphasized the importance of Microsoft being a viable option for OpenAI staff moving forward.
However, the preference for this outcome by Nadella seemed perplexing. Despite his outward composure, he appeared to be in a state of crisis communication, repeatedly warning the OpenAI board and insinuating that their actions could lead to the company’s potential collapse. Sources indicate that Altman’s employment status at Microsoft is still pending finalization, with the current arrangement described as a “holding pattern.”
As OpenAI’s “wild weekend” unfolded, some were quick to declare Microsoft the ultimate beneficiary. The tech giant now wields considerable influence in the AI realm, with access to OpenAI’s technology, a substantial stake in the company, and its cloud infrastructure.
In a piece for Stratechery, Ben Thompson posited, “One could argue that Microsoft effectively acquired OpenAI for $0 and zero risk of an antitrust lawsuit.”
Nonetheless, increased power also brings heightened responsibility. Microsoft finds itself absorbing the mantle of the global AI leader amidst a tumultuous transition, rather than reaping the anticipated high-reward, low-risk benefits of the partnership. This saga serves as a stark warning for Microsoft, exposing the precarious nature of OpenAI’s governance structure that had placed the tech giant in a high-risk position all along. Despite Nadella’s assurances to the contrary, everything has indeed changed.
Here are the remaining announcements for Artificial Intelligence this week.
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IN THE NEWS, AI
Amid concerns over potential hindrances to industry growth, the U.K. has decided not to regulate AI “in the short term.” This decision was announced last week at a Financial Times conference by Viscount Jonathan Camrose, the U.K.’s first secretary for AI and the Internet, with the government reaffirming its stance in subsequent speeches. This move aligns with similar trends in the European Union, the United States, China, and other nations moving towards regulatory oversight.
At the Asia-Pacific Economic Cooperation summit, President Biden and Chinese President Xi Jinping engaged in discussions on AI but made limited progress. According to The Washington Post, after extensive talks, the leaders agreed to “address the risks posed by advanced AI systems and enhance AI safety through U.S.-China bilateral discussions,” as per a White House statement. However, Biden underscored the competitive nature of the relationship between the two nations, hinting at the possibility of maintaining U.S. restrictions on AI chip exports to China. The Center for AI and Digital Policy characterized the outcome as “measured progress,” noting aspirations for more substantial agreements such as comprehensive AI arms control protocols.
A bipartisan group of U.S. lawmakers introduced the AI Research, Innovation, and Accountability Act. This legislation aims to establish standards for testing and evaluating “high-impact AI systems” deployed in areas such as criminal justice, critical infrastructure, and biometric identification, among other domains. It also includes provisions for transparency reports from companies utilizing AI in decision-making processes related to housing, employment, credit, education, healthcare, or insurance that significantly impact fundamental rights or safety.
Stability AI’s VP of Audio resigned following the company’s stance that training AI models on copyrighted material for educational purposes constitutes “fair use.” In his resignation statement shared on X, Ed Newton-Rex cited the company’s 23-page submission to the U.S. patent office, highlighting concerns about billion-dollar corporations leveraging relational AI models trained on creators’ works to generate new content that competes with the original creations. Newton-Rex questioned the acceptability of this practice in an industry where creators heavily rely on copyright protections.
After the suspension of its license and the recall of autonomous vehicles, Cruise’s co-founders have stepped down. CEO Kyle Vogt was the first to resign, followed by Chief Product Officer Dan Kan the next day. The company, founded in 2013 by the duo, has been under their leadership since its inception, including after General Motors’ $1 billion acquisition in 2016.
Meta has disbanded its Responsible AI (RAI) team, tasked with understanding and mitigating risks associated with AI technologies, according to The Data. The responsibilities of the RAI team and its AI infrastructure team will be redistributed among Meta employees. This restructuring aligns with the company’s strategic shift towards conceptual AI.
YouTube has updated its AI policies to allow deepfakes on the platform. While Google’s subsidiary announced the introduction of labels for synthetic media, it imposed no restrictions on the dissemination of AI-generated content. The proliferation of deepfakes, as reported by the technology publication Platformer, has prompted YouTube to place the responsibility for labeling and potentially removing such content on affected users.
AN AI RESEARCH EYE
A breakthrough in pharmaceutical discovery. Generate: Biomedicines, a Massachusetts-based biotechnology firm, has leveraged conceptual AI models to develop novel proteins with unique biological and therapeutic properties. In a recent publication in Nature, the company introduced Chroma, a design capable of generating proteins tailored to specific research requirements, expediting the development of much-needed medications.
The authors of the paper expressed excitement at the prospect of requesting desired protein attributes directly through natural language prompts, enabled by Chroma’s use of dispersion models akin to those employed in DALL-E 3, Midjourney, Stable Diffusion, and similar tools. Generate: Biomedicines has open-sourced the model to foster collaboration in conceptual biology, making both the script and model weights used for training the neural network publicly accessible. For a detailed analysis, refer to the papers here, or explore GEN’s comprehensive coverage for a more accessible overview.
AI WEALTH
Chloe Taylor, the newly appointed CEO of OpenAI, once characterized working for Microsoft as akin to “selling his soul.”
Lila Maclellan’s response to the OpenAI board controversy involving Microsoft CEO Satya Nadella serves as a model for swift and decisive action.
Reports suggest that venture capital investors in OpenAI are contemplating legal action if Sam Altman is not reinstated. – Jessica Mathews
AI and TikTok are disrupting the information industry, according to David Meyer.
Altimeter CEO Brad Gerstner predicts that AI will trigger “the largest displacement of labor in the history of neoliberalism,” as stated by Steve Mollman.
Airbnb’s Michael Lev-Ram views working as an AI vacation agent as the “holy grail” for the company, according to Brian Chesky.
One month after unveiling its latest AI model, Baidu CEO Paolo Confino deems the creation of AI types a “colossal waste of societal resources.”
BRAINFOOD
Get acquainted with the leading figures in artificial intelligence. Fortune has released the inaugural list of Fortune 50 AI Innovators, spotlighting the companies shaping the AI landscape and, by extension, our world, from groundbreaking startups to tech behemoths investing billions in AI advancement.
As the AI landscape undergoes significant shifts, now is the ideal time to explore the competition. Discover the Fortune 50 AI Innovators list here.
