Inside OpenAI’s Struggles: What You Need to Know About the Current Turmoil and Controversies
In Brief
OpenAI recently fired CEO Sam Altman, citing allegations of him “not consistently candid in his communications with the board”.
Last weekend, the board of directors at OpenAI fired the company’s CEO Sam Altman, citing allegations of him “not consistently candid in his communications with the board” – an announcement that came as a shocker for the tech industry, and this is where the story begins.
Recently, the board appointed former Twitch head Emmett Shear, as its new Chief Executive Officer, resisting investor pressure to reinstate the ousted Sam Altman. He previously worked as CEO of Amazon.com and game-streaming platform Twitch, resigning from his position earlier this year.
But, what happened to Sam and the team?
Sam Altman along with his former friend and OpenAI’s president Greg Brockman is now the part of Microsoft team. The tech giant announced that both Sam and Greg will join the company to lead the software developer’s new in-house advanced artificial intelligence (AI) team.
OpenAI’s Loss is Microsoft’s Gain
It would not be an exaggeration to say that Microsoft’s chairman and CEO, Satya Nadella’s move is a win-win game for both.
Altman at Microsoft will have access to a substantial amount of funding and resources, potentially tapping into the expertise of hundreds of his former employees. Meanwhile, Microsoft gains the ability to directly control what could ultimately become the most powerful computing technology globally.
“If Sam Altman is setting up a team at Microsoft (who knows, the news is changing every hour, maybe he’ll quit tech altogether and run a petting zoo), he is absolutely going to push for preferred hardware access over OpenAI and to be outside the “big tech” rules. He will be a non-traditional employee with a non-traditional team,” wrote Allie K Miller, a well-known AI scientist in her LinkedIn post.
She added, “If that happens and hardware is still constrained, OpenAI suffers. And more researchers will join Sam and Greg. And if that happens, Satya Nadella just orchestrated one of the best pseudo-acquisition moves of the decade. And we’re only three years in.”
As per Business Insider, Microsoft’s stock price hit an all-time high Monday, as investors reacted to former OpenAI CEO Sam Altman joining the Big Tech giant, which led to the addition of $54 billion of market value to the tech giant.
Difference of Opinions Over AI’s Safety at OpenAI
A Reuters report indicates a fundamental difference of opinion over safety, broadly, between two camps currently shaping the world-altering software and contemplating its societal impact.
On one side are proponents, including Altman — who see rapid development, and particularly public deployment of AI as crucial for stress-testing and perfecting the technology. On the opposing side are advocates who argue that the safest approach is to fully develop and test AI in a controlled laboratory environment first to ensure it is, metaphorically speaking, safe for human consumption.
Altman during an AI event hosted by the charitable foundation of Terry Gou, founder of Foxconn, acknowledged the global efforts to introduce AI regulations.
Expressing his perspective on AI regulation, Altman had previously cautioned against the industry’s tendency to criticize regulation. “People in our industry bash regulation a lot. We’ve been calling for regulation, but only of the most powerful systems,” he said.
However, providing AI tools directly into the hands of the people may sound amazing, but it can lead to enormous threats which remain non-visible in the short run. For example, cybercriminals are leveraging the tool to help write business email compromise (BEC) attacks and systematically launch highly targeted phishing attacks.
Since the introduction of OpenAI’s ChatGPT in late 2022, a significant surge in malicious phishing emails has been observed, with a staggering 1,265% increase.
The phenomenal rise of ChatGPT has led to enormous funding in AI firms, including StabilityAI, Anthropic, and more, which again has led to an explosion of AI products in the market.
OpenAI Lacks Clarity Since Beginning
More than 700 employees at OpenAI threatened to resign unless the company replaced the board.
Microsoft currently holds a 49% stake, other investors and employees hold 49%, while the nonprofit parent of OpenAI retains a 2% stake, as reported by Semafor.
It is reportedly being said that investors are collaborating with legal advisers to assess their options, indicating a possibility of pursuing legal action against OpenAI.
Concerns are rising among investors about the potential loss of hundreds of millions of dollars they have invested in OpenAI, as the organization is considered a crown jewel in some of their portfolios.
In 2015, when OpenAI launched, the founders decided to move with the non-profit model, believing it would be the most effective means to guide the development of safe and beneficial artificial general intelligence (AGI) without being encumbered by profit incentives.
It started with $1 billion in funding, including $100 million from Elon Musk.
In 2019, the company found this funding insufficient to train large language models. To sustain its development efforts, the company turned towards private investors and established a for-profit entity beneath the nonprofit.
Now in 2023, the current tussle between board members, OpenAI employees, Sam, Greg and others has once again brought the issue to light. What’s next in the line, only time will tell.
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About The Author
Kumar is an experienced Tech Journalist with a specialization in the dynamic intersections of AI/ML, marketing technology, and emerging fields such as crypto, blockchain, and NFTs. With over 3 years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and delivering comprehensive insights. Kumar's expertise lies in producing high-impact content, including articles, reports, and research publications for prominent industry platforms. With a unique skill set that combines technical knowledge and storytelling, Kumar excels at communicating complex technological concepts to diverse audiences in a clear and engaging manner.
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Kumar is an experienced Tech Journalist with a specialization in the dynamic intersections of AI/ML, marketing technology, and emerging fields such as crypto, blockchain, and NFTs. With over 3 years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and delivering comprehensive insights. Kumar's expertise lies in producing high-impact content, including articles, reports, and research publications for prominent industry platforms. With a unique skill set that combines technical knowledge and storytelling, Kumar excels at communicating complex technological concepts to diverse audiences in a clear and engaging manner.
