In a dramatic turn of events, the video details the unexpected ousting of Sam Altman from OpenAI, a company he co-founded. This decision by the board, seen as a "coup," stemmed from an ideological conflict within the organization about the balance of AI development's pace and safety. The board accused Altman of prioritizing financial gains over the company's core mission of ensuring safe AI that benefits humanity.

The video's narrative explores the intricate world of AI and the reshaped governance of OpenAI. Initially set up as a nonprofit with heavyweights like Elon Musk backing it, changes over the years saw it adopt a capped-profit structure, attracting major investments from corporations like Microsoft. The video highlights the resultant power and influence struggles, particularly Microsoft's significant stake, which, although not granting it ownership, underscores its sway over OpenAI's direction.

Main takeaways from the video:

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Key Vocabularies and Common Phrases:

1. ideological [ˌaɪ.di.əˈlɒdʒ.ɪ.kəl] - (adjective) - Related to or concerned with ideas, especially those forming the basis of economic or political theory and policy. - Synonyms: (philosophical, theoretical, conceptual)

What emerges is kind of an ideological dispute between these two factions.

2. coup [kuː] - (noun) - A sudden, violent, and illegal seizure of power from a government. - Synonyms: (overthrow, revolt, rebellion)

Essentially a coup of sorts, a huge backlash, and now we're talking about a possible return.

3. altruism [ˈæl.tru.ɪ.zəm] - (noun) - Unselfish regard for or devotion to the welfare of others. - Synonyms: (selflessness, philanthropy, benevolence)

And some of the leadership adheres to a belief system called "effective altruism".

4. blindsided [ˈblaɪnd.saɪdɪd] - (verb) - To attack or approach someone from the blind side; to surprise or shock someone by doing something they were not expecting. - Synonyms: (ambush, surprise, stun)

Microsoft, as we understand it, was completely blindsided.

5. dominant [ˈdɒm.ɪ.nənt] - (adjective) - Most important, powerful, or influential. - Synonyms: (supreme, prevailing, controlling)

That's why alliances are formed around a few dominant firms.

6. catalyzed [ˈkæt.ə.laɪzd] - (verb) - To cause or accelerate a change or reaction. - Synonyms: (stimulated, triggered, activated)

That really catalyzed a big shift in the industry.

7. malfeasance [ˌmælˈfiː.zəns] - (noun) - Wrongdoing, especially by a public official. - Synonyms: (misconduct, impropriety, corruption)

The story that emerges is not one of malfeasance or misbehavior.

8. deluge [ˈdel.juːdʒ] - (noun) - A great flood of water; a drenching rain; a flood. - Synonyms: (torrent, flood, avalanche)

Particularly when it comes to taking people's jobs or creating a deluge of misinformation.

9. reign [reɪn] - (verb) - To hold royal office; rule as king or queen. - Synonyms: (rule, govern, dominate)

The move from OpenAI to rein in its thrusting CEO had failed.

10. pseudo-philosophical [ˌsuː.doʊ-ˌfɪl.əˌsɒf.ɪ.kəl] - (adjective) - Seeming or pretending to be philosophical but not really so. - Synonyms: (specious, pretentious, superficial)

It's a pseudo-philosophical movement that has gained real traction in Silicon Valley.

The Chaotic Saga of Sam Altman's Departure and Return to OpenAI

Why should we trust you? You shouldn't. No one person should be trusted here, the board can fire me. I think that's important. Those words would come back to haunt Sam Altman, the CEO of the hottest startup in tech. Sam Altman, the co-founder of OpenAI being forced out by the board. This is, of course, the company at the center of the artificial intelligence boom. Essentially a coup of sorts, a huge backlash, and now we're talking about a possible return.

OpenAI was founded with one stated mission: to build a superintelligence that is safe and benefits all humanity. It also appeared to be the reason why Sam Altman was fired: for chasing the money at the expense of the mission. My initial reaction was, wait, what? But ironically, that failed palace coup may have had exactly the opposite effect. We saw basically the forces of capitalism assert themselves in a way that was kind of breathtaking.

OpenAI was set up in 2015, essentially by Sam Altman and Elon Musk, and the thinking was Google is growing very fast. Google has lots of AI investment. There should be a competitor. Crucially, it was a nonprofit: the idea being that its AI wasn't developed with monetary incentives in mind. And some of the leadership adheres to a belief system called "effective altruism".

It's a pseudo-philosophical movement that has gained real traction in Silicon Valley. Effective altruists aim to save the most lives or reduce the most suffering, often by making vast amounts of money that they then donate. A few years in, Musk leaves and around the same time, OpenAI's approach changes.

It shifted in 2019 into what's known as a capped profit company, meaning it intends to make money. But after a certain point, overflow that additional money into its nonprofit arm. It brings a complicated new organizational structure. The governance structure of OpenAI is weird. Most startups are governed by a board that is accountable to their shareholders. OpenAI is a startup, but it sits inside of this nonprofit, and that nonprofit board of directors is not accountable to the shareholders. It's accountable to humanity.

But the new structure lets it take outside investment without, in theory at least, compromising the mission. Developing cutting edge AI is extremely expensive. The huge computing power OpenAI needed could only be provided by a few companies. Taking investment from one of them solved several problems.

Microsoft came in as an investor and it's the single largest investors. It's invested roughly $13 billion in OpenAI. A lot of that happened before most of the world had even heard of OpenAI. And then, this. This is ChatGPT. When ChatGPT was released in late November of 2022, there was an immediate shift in how people were talking about and thinking about AI.

Everyone's using it. It's all over my social feeds. That really catalyzed a big shift in the industry that has carried forward throughout all of 2023. As ChatGPT takes off, so does the profile of Sam Altman. That made his firing all the more surprising. This crazy weekend in mid-November is probably the wildest thing that's happened in tech. I don't know, in ten years or something.

A press release goes out and it says that Sam Altman, the CEO of OpenAI, has been replaced. And not only has he been replaced by the board of directors, but it includes information to suggest that he did something very wrong. The chronology of it is astonishing. Sources say Sam Altman found out he was being fired as CEO minutes before he was fired as CEO.

It's not just journalists who are surprised. Microsoft, as we understand it, was completely blindsided. We don't think that they found out much earlier than we did. Sam Altman's fired and then immediately his investors start agitating for OpenAI to bring him back. You had investors making threats, you had employees threatening to resign, and then finally you had Satya Nadella essentially hiring Sam Altman to start, you know, some sort of AI thing inside of Microsoft.

Even though at the time of Altman's initial ousting, Microsoft wasn't on its board, it became very clear very fast that the company has a huge influence over OpenAI. This all culminated late Tuesday night when OpenAI put out a post on X saying that it had reached a agreement in principle, for Altman to return.

The story that emerges is not one of malfeasance or misbehavior or anything like that. What emerges is kind of an ideological dispute between these two factions. One that essentially says that we need to have AI accelerate as quickly as possible because it's going to bring lots of benefit to humanity. And then the other faction says, no, no, these technologies are too dangerous. We have to stop them from eradicating the human race.

But at the same time, someone has to pay to develop this tech. That's why alliances are formed around a few dominant firms. What you've seen emerge is these major tech companies having either their own AI arms or they're partnering up with different companies. Microsoft's relationship with OpenAI differs from some of its competitors because it doesn't own the company outright.

There's Meta AI Research, led by the AI luminary Yann Lecun. Google has DeepMind, which it acquired a number of years ago. For a time, Amazon was somewhat out in the cold, but it has since forged a supplier relationship with Anthropic. Anthropic is essentially a bunch of OpenAI engineers who got worried that, you know, that these guys were going too far, they weren't being careful enough.

These alliances are significant because AI is for now a cloud product. These tech companies might not be making tons of money off of the AI products per se, but they will be making money from their customers who are paying for the compute services for it. And that compute power sits in the cloud, which is a big business for Microsoft, Amazon and Google. It's also extremely profitable.

Consider this. Amazon's cloud business has made a cumulative profit of $55 billion over the past three years. Everything else it does combined have made profit of just $5 billion. That's why everyone wants to get into AI. And it presents a huge risk for Microsoft. These tensions that caused Sam Altman's departure are not going away.

And this is so important for Microsoft's business. You can't have, the entire future of this multi-trillion dollar company dependent on some crazy nonprofit run by some ideologues who kind of seem to subscribe to a, you know, belief system called effective altruism. The counterpoint to this is ensuring that OpenAI's obligation to humanity doesn't just disappear, particularly when it comes to taking people's jobs or creating a deluge of misinformation.

And Microsoft, which is answerable to shareholders, looks set to wield a lot more direct influence at the startup. Sam Altman, the co-founder and ousted leader, will now return to OpenAI as CEO. It looks like the board is changing up as well. That new board composition faced immediate criticism for its lack of diversity. It could ultimately include as many as 12 new members, and negotiations from the get go have included the possibility of Microsoft having some of those seats.

Yeah, I mean, I think we definitely will want some governance changes. Surprises are bad. The move from OpenAI to rein in its thrusting CEO had failed. And rather than diluting the profit imperative, some worry that it may have diluted the safety concerns. It's kind of tempting to see this as the end of this, very simplistic maybe way of thinking about AI, which is that, if we don't control it, it could get out of control.

But those beliefs aren't going away. So this tension is going to continue no matter what happens with OpenAI. It's going to be with us as the AI industry matures. And I would predict it's going to be with us for a long time.

Sam Altman, Artificial Intelligence, Technology, Leadership, OpenAI, Microsoft