Volkswacht Bodensee - AI doomsayers blamed in OpenAI's undoing

The exit of Sam Altman set in motion a series of events that saw the upstart company's biggest investor, Microsoft, swoop in to hire the toppled CEO and begin a process of building an OpenAI clone in the Redmond, Washington-based tech giant.

In some ways the looming result to the weekend saga is hardly a surprise, with many wondering how the board members could be naive enough to think they could win the duel with the Microsoft-backed Altman.

Microsoft pumped over $10 billion into OpenAI earlier this year to the point that critics, including ultra-wealthy entrepreneur Elon Musk, said the hot startup was owned by the Windows software maker in all but name.

"Microsoft is providing vast amounts of money and computational power and some of that of course ends up having some influence," said Brendan Dolan-Gavitt, an associate professor at New York University.

Silicon Valley was left aghast by the Friday firing of tech celebrity Altman, with the investor community, and entirety of OpenAI's own staff, furious that the four-person board got in the way of building the AI age.

"We are not happy about it. We want stability here," said Ryan Steelberg, CEO of Veritone, a company that helps firms develop artificial intelligence.

Instead of OpenAI becoming the new Apple or Google, the harsh critics see a deeply troubled startup that fell victim to the pearl-clutching of an incompetent board that was divorced from reality.

"We reached this point because minuscule risks have been hysterically amplified by the exotic thinking of sci-fi mindsets, and clickbait journalism from the press," said veteran venture capitalist Vinod Khosla, an early investor in OpenAI.

- 'Fallible people' -

But other observers less concerned with turning AI into big bucks warned that the drama in San Francisco meant that something so vital shouldn't be left in the hands of the inexperienced or the profit driven.

"This is an important reminder that as brilliant as the designers of tech like AI -- scientists or engineers -- are, they are still just fallible people," said Paul Barrett, deputy director of the NYU Stern Center for Business and Human Rights.

"That is why it is important not to just defer to them on a technology that everyone agrees has significant risks even as it promises tremendous benefits," he added.

Gary Marcus, a respected AI expert, said OpenAI's civil war "highlights the fact that we can't really trust the companies to self-regulate AI where even their own internal governance can be deeply conflicted."

Government regulation, notably by the tougher-minded European Union, was needed more than ever, he added.

OpenAI was actually created in 2015 with the goal of being a counterweight to Google, which was by far the leader in developing AI technologies that mimic the operations of the human brain.

Though nothing is known for sure, assumptions are rife that Altman's increased efforts to monetize the company's leading GPT-4 model, all while keeping its inner functioning a secret, was becoming problematic for the company's board.

Already, several senior staff at OpenAI deserted the enterprise to build Anthropic.AI over concerns that Altman was moving ahead too recklessly.

- 'OpenAI is done' -

Many are shocked that the board had the power it did, or were naive enough to think they could actually use it.

Three of those board members are thought to have connections to the effective altruism movement, which frets over the risks of AI, but that critics say is cut from reality.

Whatever their beliefs, by Monday the board were overseeing a company in name only, with virtually the whole staff committed to a pledge of seeing them go or quitting the firm for Altman's project at Microsoft.

"Unless OpenAI can block those departures, OpenAI is pretty much done at this point," analyst Rob Enderle told AFP.

This could mean a history-making victory for Microsoft, which has already seen its share price reach record levels over its ties to OpenAI.

"This is like the best possible scenario for them, and the OpenAI board I am sure is kicking itself. They were clearly detached from reality," said Carolina Milanesi, analyst at Creative Strategies.

S.Leonhard--VB