Microsoft Benefits As OpenAI Implodes

Communication issues, possibly involving tensions between the non-profit and for-profit arms of OpenAI, may be at the heart of the board's disastrous decision.

Altman shows no intention of returning to OpenAI, if the company even has a future.

Microsoft has been praised for playing (and winning) a game of 5-D Chess as internal tensions cause OpenAI to implode, with the loss of potentially almost all of the organization's staff.

Too Little, Too Late

Last week, OpenAI's board fired Altman in a surprise move, which they stated was due to the technology entrepreneur not being "consistently candid in his communications with the board, hindering its ability to exercise its responsibilities".

Since then, over 700 of OpenAI's employees have signed a letter demanding that the board resign, and that Altman is reinstated. The letter questions the competence of the board, and accuses it of undermining the company's work. The group of employees, which account for around over 90% of OpenAI's total staff, have said they will resign and follow Altman to a new company if their demands are not met.

Over the weekend, Altman was offered, and accepted, a job at Microsoft: A stunning coup for the tech giant, which is an investor in OpenAI and has been rolling out its own AI products in recent months.

Altman appears to want to stay at Microsoft, and it's clear that Nadella, the tech giant's CEO, is rolling out the red carpet—while playing a diplomatic game and ensuring the door is not shut on OpenAI.

Microsoft has already reassured those 700+ OpenAI employees that they will have jobs, if they want them, at the company. Altman will be leading a new, advanced AI team.

Unknown Catalyst

The nature of the communication issues that prompted the board to fire Altman are unknown. What is clear is that there is no hint of impropriety or financial wrongdoing.

The vacuum of information has been partially filled by speculation, including the idea that OpenAI has discovered Artificial General Intelligence (AGI) far sooner than expected. This game-changing and potentially dangerous development would need to be carefully managed due to the significant uncertainties and risks involved in deploying it.

Perhaps more realistic explanations involve the tensions inherent between the original non-profit aim of OpenAI, and its new for-profit arm. There's the possibility that the for-profit arm was pushing too hard and fast for development, and that this did not sit well with the more cautious, risk-averse non-profit part of the company. For example, the OpenAI Store was a major development, and one that was not strictly necessary for the non-profit part of the firm.

The New York Times’ Kevin Roose describes how OpenAI had an unusual structure for a tech company. This did not provide any protections for Altman, and gave the board a very different mission to the normal one of maximizing shareholder value.

It’s small (six members before Friday, and four without Mr. Altman and Mr. Brockman) and includes several A.I. experts who hold no shares in the company. Its directors do not have the responsibility of maximizing value for shareholders, as most corporate boards do, but are instead bound to a fiduciary duty to create "safe A.G.I." — artificial general intelligence — "that is broadly beneficial." At least two of the board members, Tasha McCauley and Helen Toner, have ties to the Effective Altruism movement, a utilitarian-inspired group that has pushed for A.I. safety research and raised alarms that a powerful A.I. system could one day lead to human extinction. 

It looks like the board has convincingly lost, with OpenAI now barely functioning as a company. Microsoft, meanwhile, comes out of the episode with hundreds of highly-trained staff, and Altman himself: The world's best-known name in the industry. Game, Set, Match Microsoft.

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