First question was if Sam was going to end up at Microsoft and Satya gave a complete non-answer to that. Gives credit that there was nothing substantive behind the Twitter announcement that Sam was going to CEO a Microsoft business; it was just to bolster investor confidence..
Incredible. Anyone with FTC knowledge know if making those sorts of announcements can run afoul of regulations?
Honestly I think there was an offer and Sam verbally accepted.. maybe even signed. That doesn't mean it will happen and if all this is the case.. then it should be fine by SEC because there wasn't technically a lie.
Unless you state publicly that there was no reason to believe their statement was true and they said it only for the purpose of juicing the stock price.
Is Sam going to MS actually useful for MS in the long run? MS has a CEO. What they want is mostly-exclusive access to the best LLM.
They had that last week. If Sam returns to OpenAI, they will continue to have it. If Sam brings most of the OpenAI team to MS, there will be an awkward recreation of IP and MS will likely get it again [0]. But other than being the one to bring the team along, I’m not sure what Sam, personally, would bring.
(Sam at OpenAI is a different story obviously.)
[0] OpenAI has some maybe-dubious IP in the form of a massive dataset. MS may prefer not to possess such a thing. And I don’t know whether MS is permitted under its contract to create derivative works of whatever it licensed from OpenAI.
Microsoft has 340x the number of employees as OpenAI.
Sam Altman was never a consideration as CEO of the whole company.
But instead CEO or VP of a seperate entity similar to how Github operates for which Sam would be more than suitable. And once again Sam just built a $100b business. That requires a bit more skill than people give him credit for.
Microsoft already has several employees whose position is titled as "CEO" -- the heads of GitHub and LinkedIn at least -- other than head of the whole firm.
I think you mean SEC, the people who bought stock on the basis of Nadella's "announcement" will probably be thinking they can sue.
But beyond that did Nadella think there was insufficient chaos around OpenAI and felt he needed to add his own?
Everyone is issuing claims, counterclaims and threats. Has no one thought it might be a good idea to just step back and think for a day or two, let things cool down before issuing more of the same?
> there was nothing substantive behind the Twitter announcement that Sam was going to CEO a Microsoft business; it was just to bolster investor confidence
That would be a public admission of securities fraud, with an admission that they did so intenteding to commit securities fraud.
Don't know why it would be a problem for investors if Sam went back to openai? Either way Microsoft gets what they want and given the scale of the walkout msft might get what they originally were pushing for anyway instead of the backup option with hiring them to msft.
The 9 minutes interview with Satya is worth a watch. Good avoidance of some key questions, but still worth it. If not for anything else, to understand what the official position of MS is: we want Sam, from OAI or as a part of MS matters not much.
Interesting. So you are saying that this power might come from contracts that were biased in favor to Microsoft by someone that might be or might be not hired by Microsoft? People should have learned more carefully from the Nokia case if this is true.
Don't like the WSJ? The blog post only indicates some kind of exclusive license to GPT-3, not the all-encompassing claim to OpenAI IP you suggest. Microsoft has never indicated such to my knowledge.
Okay let’s take your argument at face value. What do you think a trillion dollar market cap company can do with a license and by extending offers to all of OpenAI’s disaffected employees?
Think of what Apple can do with a license to ARM and now compare that to what MS could do with a license to GPT 3?
Do you really think any company would depend on another companies technology the way that MS is dependent on OpenAI without having a favorable license?
I’ve dealt with something similar on a very minute scale on both sides - being a dev lead at a startup where our largest customer accounted for 70% of our revenue and being the dev lead where the company I was working for accounted for 70% of a vendors revenue.
Each time, I saw how much power the customer yielded. It involves lawyers, licensing, contingencies, etc. and in both of the cases above - escrowing of code where the customer got the rights in certain conditions.
I’m 100% sure that MS has better lawyers than I encountered.
Let's assume Microsoft can freely use present-day ChatGPT in its products. If Microsoft wanted to further develop ChatGPT in-house, I imagine the effort would resemble Apple's in-house modem struggles due to tiptoeing around Qualcomm's patents.
You can't compare a hostile OpenAI with a cooperative ARM. Even with a cooperative OpenAI, Microsoft restricts internal researcher access to the source code, so the license appears less favorable than you think.
Now let’s assume that Apple could hire 90% of Qualcomm’s engineers and not have to worry about patent lawsuits…
Again I’m 100% sure that Microsoft wouldn’t base its entire technology line on another company’s IP without having very favorable licenses. That’s just not how these things work.
They've hired a bunch. Tech giants pass everything through legal—too big not to. IP & patents remain a PITA regardless of market cap.
Licensing ChatGPT versions developed by OpenAI seems favorable enough to me. The question boils down to what happens if OpenAI stops development. I highly doubt the bright minds at OpenAI gave away their IP for widely available compute credits.
No matter how bright they are, I am sure I read somewhere that the employees had all succumb to an addiction to food and shelter early in life and haven’t overcome that addiction.
Unless they are a gang of thieves, they are all exchanging labor for money to support their addiction. Who do you really think has the negotiating power in this relationship?
There are only two other companies with the amount of compute available that OpenAI needs - AWS and GCP. And GCP is a non starter and a distant third in cloud.
And if you think a migration at that scale is “easy” you haven’t been involved with mass migrations. Besides, Microsoft’s enterprise customers aren’t going to jump ship to another cloud provider and follow OpenAI.
Before I was giving anecdotes from n-6 job working at a startup and my n-3 job when I was on the other side of the table as a vendor’s largest customer.
This part of knowing how the cloud industry and migrations work comes from my n-1 job working in the Professional Services Department at AWS when I was involved with large migrations and saw how sticky enterprises were when it came to dealing with Microsoft.
And what does OpenAI have to offer another company with Microsoft already having 49% equity?
First, I meant people would've already jumped ship to Microsoft en masse without bothering with the OpenAI board fiasco if Microsoft truly held all the cards. I suspect they do not.
Second, I meant the OpenAI that signed the initial agreement with Microsoft years ago already had ample resources and funding. In those negotiations, OpenAI would have had little incentive to hand over all their IP regardless of the offer on hand.
We are witnessing right now that most of OpenAIs employees are ready to jump ship now that Altman is leaving. The facts on the ground changed.
Also, it’s standard in many contracts that you can’t actively poach a partner’s employees. That doesn’t mean that if the employees actively reach out to you, you can’t hire them. I saw that at AWS.
If they had so much funding why were they willing to give up 49% of the company to Microsoft? Does that read like a company that could be picky?
The fact that Sam and the employees have waged this PR campaign suggests the board still sits on something of value. I guess we'll see who flinches first.
OpenAI gave up 49% equity because they thought Microsoft gave a fair valuation and terms, among other possible reasons. OpenAI wanted to scale up their LLM research so they signed the agreement. I don't think OpenAI negotiated from a position of weakness.
What's really interesting is that OpenAI has been maneuvered into a really bad strategic position. Theoretically, they could jump into the arms of any other FAANG and get the compute and funding they need. However, Microsoft remains a 49% equity holder so they don't have much to offer to this new corporate savior. Microsoft effectively licked the OpenAI cookie once they bought such a large stake in the company.
The only strategic play left to OpenAI is spite. They can choose to burn down Chat GPT which will lead to a scattering of their talent across competitors (although Microsoft will likely just pick up most). This will slow down Microsoft by a couple of months but will be nothing more than a bump on their way to AI dominance.
A strategic play is to release the models - the nuclear option. Go full OpenAI. Even if Microsoft has an exclusive license, leaks and breaches happen.
The board should have led with this as an implied threat behind closed doors and given both Altman and Nadella a face-saving public retreat. Altman goes off to start GPTSoft with equity, a license to GPT4 and access to Microsoft's cloud compute. Everyone gets to call this a win. Public humiliation was a mistake.
They aren't a non-profit, haven't been since 2019. They are a for-profit corporation with a 100x cap. Microsoft being their largest investor actually do have significant authority here. The board ultimately answers to their investor and employee stakeholders since they are not a non-profit.
Microsoft own OpenAI equity. Technically he has the authority to do so. At this point he cant do Elon firing as they need to preserve the stock price. You can say in a way the existing board turn rogue and hold him hostage. Once this settle, you will see near 100% board changes. If this not happening, half the OpenAI staff will be gone before next year 4th of July. At that point, their equity will worth significantly less. The crux of OpenAI is not their chatgpt but gpu. They are like Apple and Amazon big enough to make their own gpu. Sam wants to secure gpu access by founding a 2nd NVIDIA. Even if not, they can still be kingmaker. Whoever gpu being used, you will see that stock price shoot up....yes if Intel Arc. The board members arent that smart and thought he try to circumvent them. It is basically ego power play. They never realize how powerful and influential Sam is. At this point it is too late for those board members. Expect them to get shunt by evety investors in SV. As for Quora....hahaha...pretty much another Evernote fate.
And you really think that’s going to happen? How many non profits have you seen that are just as if not more power hungry than for profits — ie every religious organization.
They aren't a non-profit, haven't been since 2019. They may market themselves as non-profit but they are in fact a for-profit corporation with a 100x return cap. Microsoft is currently their largest investor. Profit capped at 100x means microsoft expecting to get $1.3 trillion back on their $13 billion investment. The board ultimately answers to its investor and employee stakeholders since it isn't a non-profit.
He doesn't "have the authority to dictate" but he does "have an extremely influential position and his opinion is potentially very important to the non profit".
The Levine newsletter explains this very explicitly.
They have no authority on paper. They have plenty of authority in practice by virtue of exercising their power/leverage inherent in OpenAI’s dependence on them for compute resources.
The non-profit part won't ever work without Microsoft's finance/infrastructure. Satya might not have nominal power on the board, but he definitely has a power to make OpenAI miserable and proved it over the weekend.
> Why he thinks that he has any authority to say this?
Because, as Matt Levine pointed out today, there are two ways that you can view OpenAI's corporate governance.
On the one hand, you have the board, which has legal control over the entire company and all of its subsidiaries.
On the other hand, you have Microsoft, who has money.
Under the world view of contracts and corporate governance structures, OpenAI is the company of the board. The board can do whatever they want.
Under the world view of 'people like to eat sometime this month, and OpenAI needs to fundraise', OpenAI is a subservient division of Microsoft. Who can do whatever it wants, up to, and including acquiring all of its IP and staff for essentially $0, with zero regulatory oversight or anti-trust problems.
On paper, you may have property rights to your house. In practice, someone who has property rights around your house can build a wall around it, and wait for you to either sell it to him for a dollar, or starve.
This whole adventure has definitely been a novel (if expensive) take on the 3E's of Microsoft - 'Embrace, Extend, Exterminate'.
I really wish the FTC would get back to busting up this kind of bullshit behavior instead of playing catchup. The cloud giants should be split up, just like AT&T/Bell in the 80s and Standard Oil over 100 years ago. They are bad for business, bad for the free market, and bad for everyone who isn’t getting their pockets lined.
The cloud business is remarkably competitive. Prices have been dropping. Innovation and new services are happening. This is exactly the type of market you want to have.
The type of market where if you want to launch a new business the best you can hope for is to be acquired or bullied out of the market? Price is not the only indicator of a competitive market, buyers need options. Innovation is not some panacea for socioeconomic ills. It’s the kind of market that tech bros with zero empathy for anyone who isn’t like them have wet dreams about.
This problem is not the money. It is the equity. I am certain there is no shortage of investors that would dump cash into OpenAI today despite the events of the last couple of days. It's not even the compute. Amazon would happily move them to AWS tomorrow if they got the chance. The issue is Microsoft's 49% equity stake in the company. What would the new investors get in exchange for their cash/compute? 49.5%?
Pretty bad look for Satya to be honest. 12 hours ago, everyone was convinced Satya was playing 4D chess, but in reality Occam's Razor again - he was just lying.
As Matt Levine likes to say - everything is a security's fraud and in this case, it might actually be. It is now abundantly clear that those statements were merely to hold the stock price drop come Monday.
This just makes me way more curious about Sam’s behind the scenes behavior that pushed the board into firing him. Satya being an obvious liar makes me far more inclined to believe that they had very legitimate reasons for this. Wouldn’t surprise me if they’re staying vague to avoid the possibility of defamation suits if it ends up being a he said/she said situation without hard evidence. The whole OpenAI and Microsoft relationship stinks of anticompetitive behavior and a planned monopoly.
Per Satya's interview with Emily Chang, Sam & Greg never joined Microsoft. You can watch the interview to see how he avoids the question and then talk about Microsoft AI.
And remember, he did this AFTER the markets closed, so he was sitting on this information the whole day.
> I’m super excited to have you join as CEO of this new group, Sam, setting a new pace for innovation. We’ve learned a lot over the years about how to give founders and innovators space to build independent identities and cultures within Microsoft, including GitHub, Mojang Studios, and LinkedIn, and I’m looking forward to having you do the same.
They know. They're saying to read the original tweet more closely. It was very carefully phrased. Technically, it doesn't say what everyone assumes it said. He never says "Sam has accepted an offer of employment." He just says he's "excited to have [Sam] join" and he's "looking forward to" working with him. All technically unfalsafiable statements about his feelings and state of mind. They're even addressed -to Sam-. They're the kind of thing you could imagine someone saying to you at the end of a job interview that ended with an offer which you technically haven't accepted yet.
I think what's already obvious is that most people in AI research care only for solving some hard problems in computer science. Both AI safety and ethics[0] be damned. So the amount of control OpenAI had on the research arm is less than you'd think.
[0] For the record, AI safety is the branch of research worried about controlling computer God, while AI ethics is the branch of research worried about whether or not it's OK to pay Pakistani kids pennies to label training data.
Would you also include in “AI ethics” a considered rollout of automation to maximize its benefit to everyone? Because there is real benefit. The kind of work AI can automate is shit work and it would be to the theoretical benefit of society for it to be automated… unless all the benefits accrued to the owners of the tech instead of the people whose (stupid) jobs are being replaced.
Is that “AI ethics” or still a third (anti capitalist?) thing?
I'm not sure that's accurate. Most companies use "AI safety" as a shorthand for "brand safety", i.e., making sure that your LLM can't be trolled into praising Hitler or denying climate change. Basically, do what needs to be done to avoid bad press.
There is definitely that second and more abstract take - AI doomsday safety - that Altman liked to talk about to get favorable regulation passed. But it doesn't seem to be much of a real field. "Hard" AI doomers think that superhuman AI can't be reliably constrained and we should just stop. "Soft" doomers think we need to solve "alignment". But we don't really know what's going on inside an LLM, so we test for alignment by asking it what it thinks about Hitler. In other words, back to brand safety.
My company Preamble markets ourselves as an AI Safety company so I’ll opine on what I think is a reasonable middle-ground definition. We interpret near-term AI safety to mean solving the problems that already exist today but will also exist in AGI.
As a key example, we were the first team to discover Prompt Injection, which we responsibly disclosed to OpenAI leadership in early May of 2022, four months before it was independently rediscovered by Riley Goodside.
Prompt Injection is a perfect example of what we consider a near-term “AI safety” issue: it’s a real issue that affects current systems, and it will also affect any instruction-based AGI systems if a solution is not found by the time AGI is reached. There is currently no known general solution to Prompt Injection, and it’s #1 on OWASP’s recent list of the top vulns in LLMs. (See link above. This vuln is designated LLM01.)
You're not wrong. AI safety originally meant the doomsday variant and has sort of morphed into the brand safety variant. My understanding was that safety research was treating both as the same problem, or at least that they believed brand safety was a worthwhile subset of the doomsday problem to attack.
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[ 3.3 ms ] story [ 153 ms ] threadIncredible. Anyone with FTC knowledge know if making those sorts of announcements can run afoul of regulations?
Edit: Sorry, SEC.
They had that last week. If Sam returns to OpenAI, they will continue to have it. If Sam brings most of the OpenAI team to MS, there will be an awkward recreation of IP and MS will likely get it again [0]. But other than being the one to bring the team along, I’m not sure what Sam, personally, would bring.
(Sam at OpenAI is a different story obviously.)
[0] OpenAI has some maybe-dubious IP in the form of a massive dataset. MS may prefer not to possess such a thing. And I don’t know whether MS is permitted under its contract to create derivative works of whatever it licensed from OpenAI.
Sam Altman replacing Satya Nadella as CEO of Microsoft would certainly be a twist!
Sam Altman was never a consideration as CEO of the whole company.
But instead CEO or VP of a seperate entity similar to how Github operates for which Sam would be more than suitable. And once again Sam just built a $100b business. That requires a bit more skill than people give him credit for.
Building a $100bn business is one thing. Running a division of a big company is rather different.
But beyond that did Nadella think there was insufficient chaos around OpenAI and felt he needed to add his own?
Everyone is issuing claims, counterclaims and threats. Has no one thought it might be a good idea to just step back and think for a day or two, let things cool down before issuing more of the same?
That would be a public admission of securities fraud, with an admission that they did so intenteding to commit securities fraud.
Confessing securities fraud, or
Doing more securities fraud.
They are Open AIs largest investor and gives Open AI a steep discount on compute.
Microsoft already has a perpetual license to all of OpenAIs IP and could easily hire every single one of thier employees without blinking
https://www.wsj.com/articles/microsoft-and-openai-forge-awkw...
Think of what Apple can do with a license to ARM and now compare that to what MS could do with a license to GPT 3?
Do you really think any company would depend on another companies technology the way that MS is dependent on OpenAI without having a favorable license?
I’ve dealt with something similar on a very minute scale on both sides - being a dev lead at a startup where our largest customer accounted for 70% of our revenue and being the dev lead where the company I was working for accounted for 70% of a vendors revenue.
Each time, I saw how much power the customer yielded. It involves lawyers, licensing, contingencies, etc. and in both of the cases above - escrowing of code where the customer got the rights in certain conditions.
I’m 100% sure that MS has better lawyers than I encountered.
You can't compare a hostile OpenAI with a cooperative ARM. Even with a cooperative OpenAI, Microsoft restricts internal researcher access to the source code, so the license appears less favorable than you think.
Again I’m 100% sure that Microsoft wouldn’t base its entire technology line on another company’s IP without having very favorable licenses. That’s just not how these things work.
Licensing ChatGPT versions developed by OpenAI seems favorable enough to me. The question boils down to what happens if OpenAI stops development. I highly doubt the bright minds at OpenAI gave away their IP for widely available compute credits.
Unless they are a gang of thieves, they are all exchanging labor for money to support their addiction. Who do you really think has the negotiating power in this relationship?
The smaller OpenAI that signed the Microsoft agreement had plenty of sustenance. Compute remains fungible unlike LLMs.
And if you think a migration at that scale is “easy” you haven’t been involved with mass migrations. Besides, Microsoft’s enterprise customers aren’t going to jump ship to another cloud provider and follow OpenAI.
Before I was giving anecdotes from n-6 job working at a startup and my n-3 job when I was on the other side of the table as a vendor’s largest customer.
This part of knowing how the cloud industry and migrations work comes from my n-1 job working in the Professional Services Department at AWS when I was involved with large migrations and saw how sticky enterprises were when it came to dealing with Microsoft.
And what does OpenAI have to offer another company with Microsoft already having 49% equity?
Second, I meant the OpenAI that signed the initial agreement with Microsoft years ago already had ample resources and funding. In those negotiations, OpenAI would have had little incentive to hand over all their IP regardless of the offer on hand.
Also, it’s standard in many contracts that you can’t actively poach a partner’s employees. That doesn’t mean that if the employees actively reach out to you, you can’t hire them. I saw that at AWS.
If they had so much funding why were they willing to give up 49% of the company to Microsoft? Does that read like a company that could be picky?
OpenAI gave up 49% equity because they thought Microsoft gave a fair valuation and terms, among other possible reasons. OpenAI wanted to scale up their LLM research so they signed the agreement. I don't think OpenAI negotiated from a position of weakness.
The only strategic play left to OpenAI is spite. They can choose to burn down Chat GPT which will lead to a scattering of their talent across competitors (although Microsoft will likely just pick up most). This will slow down Microsoft by a couple of months but will be nothing more than a bump on their way to AI dominance.
The board should have led with this as an implied threat behind closed doors and given both Altman and Nadella a face-saving public retreat. Altman goes off to start GPTSoft with equity, a license to GPT4 and access to Microsoft's cloud compute. Everyone gets to call this a win. Public humiliation was a mistake.
That's not a problem for the non-profit board. If the mission is best served by the non-profit ceasing to exist, they should make it cease to exist.
Why he thinks that he has authority to dictate how the non profit should be structured? I don't think he has.
https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ixMQ90DVObm...
Why he thinks that he has authority to dictate how the non profit should be structured? I don't think he has.
They have no authority on paper. They have plenty of authority in practice by virtue of exercising their power/leverage inherent in OpenAI’s dependence on them for compute resources.
Because, as Matt Levine pointed out today, there are two ways that you can view OpenAI's corporate governance.
On the one hand, you have the board, which has legal control over the entire company and all of its subsidiaries.
On the other hand, you have Microsoft, who has money.
Under the world view of contracts and corporate governance structures, OpenAI is the company of the board. The board can do whatever they want.
Under the world view of 'people like to eat sometime this month, and OpenAI needs to fundraise', OpenAI is a subservient division of Microsoft. Who can do whatever it wants, up to, and including acquiring all of its IP and staff for essentially $0, with zero regulatory oversight or anti-trust problems.
On paper, you may have property rights to your house. In practice, someone who has property rights around your house can build a wall around it, and wait for you to either sell it to him for a dollar, or starve.
This whole adventure has definitely been a novel (if expensive) take on the 3E's of Microsoft - 'Embrace, Extend, Exterminate'.
As Matt Levine likes to say - everything is a security's fraud and in this case, it might actually be. It is now abundantly clear that those statements were merely to hold the stock price drop come Monday.
Lying about what specifically?
And remember, he did this AFTER the markets closed, so he was sitting on this information the whole day.
This was the tweet. Read it carefully.
Here's a bit more context -
https://www.threads.net/@reckless1280/post/Cz4ulUmLh2_
You think that Satya would say “Sam is joining” if Sam didn’t at least verbally accept an offer?
You win for stupidest comment on the internet.
https://www.threads.net/@reckless1280/post/Cz4ulUmLh2_
[0] For the record, AI safety is the branch of research worried about controlling computer God, while AI ethics is the branch of research worried about whether or not it's OK to pay Pakistani kids pennies to label training data.
Would you also include in “AI ethics” a considered rollout of automation to maximize its benefit to everyone? Because there is real benefit. The kind of work AI can automate is shit work and it would be to the theoretical benefit of society for it to be automated… unless all the benefits accrued to the owners of the tech instead of the people whose (stupid) jobs are being replaced.
Is that “AI ethics” or still a third (anti capitalist?) thing?
The workers doing the jobs will never benefit. They'll be shown the door and the owners will reap all the profits.
There is definitely that second and more abstract take - AI doomsday safety - that Altman liked to talk about to get favorable regulation passed. But it doesn't seem to be much of a real field. "Hard" AI doomers think that superhuman AI can't be reliably constrained and we should just stop. "Soft" doomers think we need to solve "alignment". But we don't really know what's going on inside an LLM, so we test for alignment by asking it what it thinks about Hitler. In other words, back to brand safety.
As a key example, we were the first team to discover Prompt Injection, which we responsibly disclosed to OpenAI leadership in early May of 2022, four months before it was independently rediscovered by Riley Goodside.
(See the citation at the bottom of this page https://github.com/OWASP/www-project-top-10-for-large-langua... )
Prompt Injection is a perfect example of what we consider a near-term “AI safety” issue: it’s a real issue that affects current systems, and it will also affect any instruction-based AGI systems if a solution is not found by the time AGI is reached. There is currently no known general solution to Prompt Injection, and it’s #1 on OWASP’s recent list of the top vulns in LLMs. (See link above. This vuln is designated LLM01.)
Also, the two are tied: those underpaid, overworked Filipinas? Surprisingly reactionaries.
Still no Form RRF-1 filed today.
https://www.plainsite.org/posts/aaron/r8huu7s/
“Wolf thinks sheep shouldn’t be cooped up in secure pen”.