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  • Sunday Reads and Listens - The 26 Women And Children Israeli Hostages Returned ...and What Open AI Drama Told Us About The Future...Planets Versus Planets and Secular AI Momentum

Sunday Reads and Listens - The 26 Women And Children Israeli Hostages Returned ...and What Open AI Drama Told Us About The Future...Planets Versus Planets and Secular AI Momentum

Good morning…

The secular momentum in AI (artificial intelligence)is the topic of today, but before I get started I want to point out the miracle of Israel getting 26 hostages returned from Hamas. Of course this came with sickening tradeoffs and more insights into the bought and paid for Western media, UN, Red Cross and WHO agencies…

Here is Reuters last night calling the hostages (2 and 8 year old civilians) soldiers:

Here is ‘The Red Cross’ is relieved that what they call Palestinian ’detainees’,not the convicted criminals/prisoners they are, can now hug their families…

The New York Times ran the freed hostage headline with a picture of a Palestinian prisoner draped in a Hamas flag…

This should have been the picture in all Western democratic newspapers…

And of course the UN…a waste of taxpayer money coming out after 50 days with a twisted, contorted tweet, almost admitting what everyone knows about the mass rape. They would like an investigation 50 days after one was already completed.…

Onward…

The technology planetary war, paranoia and greed was on full display as Open AI had a ‘Game Of Thrones’ moment the last week. Trillions are at stake and CEO’s fro Sam Altman, Satya Nadella, Elon Musk and Marc Benioff tipped their hands to the panic they feel on Twitter,

The planets (Google, Apple, Microsoft, FaceMetaBook, Amazon, Tesla) are chasing anything that moves. Elon rushing out Grok with Twitter, Benioff using Twitter late night to recruit Open AI engineers (to no avail) and Satya hiring Sam Altman and 700 of Open AI’s engineers on Twitter just to make sure his billions in Open AI investment were protected.

I have nothing against Open AI, AI in general or Chat GPT but I’m happy with Google Search. Google search is all I need right now as a ‘user.’

BUT, as my friend Michael points out post $NVDA earnings yesterday afternoon…AI has secular momentum. That ‘secular momentum’ has my attention as an investor, not just the CEO’s of the Magnificent 7.

My favorite site for TechNews was dominated by Open AI drama and it has not buzzed that long around one subject in years. In times like this the Techmeme sentiment speaks for itself. We can argue about Open AI’s usefulness, effectiveness and dangers, but it is obvious that AI is here with us to stay.

I must chime in with a concern few in media or the industry care to mention yet alone cover…why was Sam actually fired? and what ‘Casey Armstrong at ‘Every’ covers in an essay titled ‘The Case Against Sam Altman’. The gist…

When Sam Altman lost his job running OpenAI, the startup valued at over $50 billion, there were many sins that struck me as particularly grievous. The first was that he was looking to raise billions to start his own chip company that could sell to OpenAI (e.g., profiting from the supply), and the second was that he was separately raising billions to build a hardware device that OpenAI models would be housed on (e.g., profiting off the platform). To further muddy the waters, OpenAI’s main partner, Microsoft, buys power from a company in which Altman is a major shareholder. OpenAI’s in-house VC fund has led a Series A round in a company in which Altman is also a major shareholder. Altman owns shares in some of the buzziest tech companies in the world, including Stripe, Instacart, and Humane. Many, if not all, of those companies are using the tech that OpenAI is selling. 

This is enough conflicts of interest to make a corporate lawyer's brain smush in on itself like a dying sun. It is a ludicrous amount of mis-aligned incentives. 

Now, the Neumann-Altman comparison isn’t exactly a fair one. WeWork is worth a grand total of zilch, while OpenAI was about to close a $86 billion tender offer before this weekend’s debacle. A bankrupt real estate company can’t really be compared to a company that regularly releases products that are straight out of science fiction. But the fact that my conflict-of-interest parallel is so easy to make should cause everyone to pause in their full-throated defense of Altman. 

Any board, non-profit or not, could consider all this equity mish-mash a fireable offense. At the risk of being heavy-handed with this analogy, before this weekend’s events, Altman was looking to both make the uranium and build the power plant for his nuclear reactor company. It is a level of profiteering that I find disquieting. You can make an argument that Altman is uniquely qualified to lead all these companies, but he should be doing so in a way where he isn’t the one primarily benefiting. A clearer structure would be setting up an AI holding company for the chips, models, and hardware so that all the investors in OpenAI could benefit. As it is, I feel uncomfortable that the company’s employees and investors have helped jump-start an industry that Altman is attempting to corner. 

Actually, maybe the nuclear analogy is right. When Altman helped found OpenAI, the team was explicitly worried about what would happen if a non-moralistic organization were to discover artificial general intelligence. After all, an AGI would be a technology as powerful and impactful as nuclear weapons are today. 

To combat this, they explicitly made unusual corporate governance choices. From the founding blog post: “OpenAI is a non-profit artificial intelligence research company. Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return. Since our research is free from financial obligations, we can better focus on a positive human impact.”

So they set up a board with the power to fire the CEO if he went off-mission. In June of this year, Altman himself called that a positive quality of the organization! That Altman got canned is a feature, not a bug, of the organization he designed.

So, here we are. Sam is back at OpenAI/Microsoft and in more control than ever.

You and I are the ‘product’(users).

Expect the rate of deployment of AI to accelerate.

Expect the big 7 (magnificent 7) to enjoy massive regulatory capture as our AI overlords and I guess we prey for the best.

Have a great Sunday.

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