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The pitched battle in OpenAI shakes the foundations of AI and gives power to Microsoft

Date: December 9, 2023 Time: 11:18:43

The corporate battle that has been going on since last week within OpenAI has shaken the foundations of the technology sector and threatens to change the balance of forces between the great ‘tech’ titans. In 72 heart-stopping hours, in which its CEO was suddenly fired, many placed Microsoft as a great beneficiary. Recruit several of the most relevant technological profiles in this sector at a key moment. And the incorporation of many more is also assured in case the centenarians who signed a letter addressed to the council carry out their threat and leave for the new division commanded by their former boss. In exchange, the company in which it has committed up to 10,000 million dollars in the latest financing signed – to take up to 49% of the shares – is left in an extremely weak situation.

Until last Friday, OpenAI was a kind of ‘loose verse’ in a technology sector governed by giants. Its corporate governance structure is ‘sui generis’, precisely because of Altman’s commitment to raising capital – between venture capital funds like Thrive Capital and ‘tech’ giants like Microsoft – to grow at a faster rate. But the reality is that this investment commitment by the creator of Windows or Office would allow him to reach almost 50% of the shares of that subsidiary of ‘hidden profits’ (OpenAI Global LLC) that manages the business of subscriptions and linked products. . to ChatGPT and the rest of the technologies. But the governance – and the proof of what happened last week – was centralized in an independent council so it was not under the control of any of the big ones (not even Microsoft, which found out about the sudden termination just a few minutes before your announcement)… until now.

The fight has ended with two of the main executives – and co-founders – of OpenAI outside the company’s discipline and with the announcement of their signing for Microsoft. In this way, the company led by Satya Nadella ensured that everything remained in its orbit. The turn of events experienced this Monday enlarges that orbit, since hundreds of employees – more than half a thousand, according to various American media – threatened to leave, like Sam Altman and Greg Brockman, to this new subsidiary if all the directors and directors did not resign. They made both managers return.

This mass signing practically represents the collapse of OpenAI and a victory for Microsoft. It will incorporate the talent, after having provided much of the entire IT infrastructure and the new one for the development of ChatGPT and the rest of the products and services. It must be taken into account that the recruitment of engineers, scientists and other technicians specialized in AI is one of the issues that most concerns the leaders of the giants, due to the strong competition between all the large companies.

Proof of what this mass exodus would mean for the company until now led by Altman is the twist in the script performed by the co-founder and chief scientist, Ilya Sutskever, who had been one of the critics of the former CEO and one of those who would have most pressured internally in the decision-making body for its departure due to differences in criteria regarding the development of technology, its commercial exploitation and the relationship with security. He is one of the signatories of that letter and on his Twitter profile, where a battle for the story has also been fought between the different groups and protagonists, he stated this Monday: “I deeply regret my participation in the actions taken by the council.” . He insisted that he wanted to carry out whatever measures were necessary to bring back the fired (or resigned) executives.

As a backdrop to this corporate pitched battle are the two visions that govern today the development of artificial intelligence at a global level and its influence on the daily lives of companies and citizens. On the one hand, the most specialized and conservative technicians who warn about exponential growth that could put security at risk. On the other hand, the managers – and investors – who seek to accelerate as much as possible in this race to arrive first and gain a growing business. Proof of this is the figure provided last summer by OpenAI: it was in a position to reach 1,000 million dollars annually -about 80 million per month, compared to the 28 million generated in 2022-.

Much to clarify

According to what the American news agency Bloomberg published these days, the event held on November 6, in which Altman presented news together with Nadella himself, was the last straw that broke the camel’s back with the council. The presentation of customized versions of ChatGPT, which allow anyone to create chatbots that perform specialized tasks on their own (a red flag for security advocates), would have infuriated Sutskever and the rest of the technicians at the highest decision-making body. .

Several aspects of this battle still remain to be elucidated. First, if the US regulators will intervene to investigate what happened in those 72 hours and, above all, the role of Microsoft (it has managed to make a ‘de facto acquisition’ of the largest independent AI company without making any disbursement or having to go through through no review process like other purchases such as that of Activision Blizzard). Then a relevant legal battle will begin between the parties that could disrupt things for the future. And also what the commercial partnership between Microsoft itself and OpenAI will look like if the hundreds of employees finally end up in the newly created division led by Altman.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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