Morning Brew Daily - OpenAI Chaos Continues as Most of Staff Threatens to Quit

Episode Date: November 21, 2023

Episode 196: Neal and Toby discuss the latest drama surrounding Sam Altman's departure from OpenAI and why employees are threatening to leave the AI giant if he isn't reinstated as CEO. Plus why the Cruise CEO stepped down and what are the benefits of Argentina adopting the dollar? Toby shares his favorite trends and a clay shortage may be impacting movie productions. And finally, where the Turkeys that are pardoned end up. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning brew daily show. I'm Neil Fryman. And I'm Toby Hell. On today's pod, why the Sam Altman drama is just the tip of the iceberg for the war over AI. Then it's a tough time to be a visionary CEO these days. The chief exec of Autonomous Driving Company, Cruise, is also heading for the door. It's Tuesday, November 21st. Let's ride.

Toby, tough news for everyone listening in London. It looks like you won't be getting a sphere anytime soon. Your mayor, Sadiq Khan, rejected a proposal by Madison Square Garden to create. a Vegas-style sphere in East London, saying the light pollution from all those LEDs would be harmful to local residents. Guess when your city already has a globe, a sphere is kind of redundant.

Of course, the Brits couldn't handle it. That sphere is the embodiment of American access. I vote we erect one in every major U.S. city. New York, put it right in Central Park. St. Louis, right under the arch. Maybe one inside the Grand Canyon just for good measure. Let's just rub it in England's face. Okay, before I incur the wrath of King Charles, I want to give a quick shout out to our sponsor, Brex.

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We begin where else with OpenAI, and I'm sorry to break it to you, listeners. The drama just keeps on escalating. Even though ex-CEO, Sam Altman, and President Greg Brockman were hired by Microsoft to lead a new AI division yesterday morning, open AI employees think they can ultimately get them back. So they've staged a mutiny. virtually all of the 770 employees at the company signed a letter calling on the board to resign and for Sam and Greg to be reinstated. They threatened to leave Open AI should this not happen and potentially join Sam and Greg at Microsoft, which said it would be happy to hire them.

Meanwhile, it doesn't seem like Sam and Greg to Microsoft is a totally done deal. These two would reportedly be more than happy to go back to OpenAI if the board that booted them meets employee demands and resigns. The Microsoft move seems like a way to buy time to see if these board members would succumb to the immense pressure. So the state of play as of 6 a.m. this morning, employee revolt at OpenAI and the Sam and Greg to Microsoft deal looks a lot thinner than it did yesterday. The big question, will the board capitulate? And I hope it's okay that we're on a first name basis with Sam and Greg at this point. Absolutely. Yeah, essentially what we're seeing play out in real time is this battle between maybe the DOOMers and the Tech Optimus.

The Dumers include some of AI's board members, which run that nonprofit whose stated goal is developing AI for the benefit of humanity. And then you have the tech optimists on one side who think the only way forward is forward. You should keep developing, keep innovating, rather than rein anything back in. And we are literally seeing this play out in this kind of board struggle between employees and the board members. So right now it's resoundingly clear that if they continue on this current path, Open AI will have no more employees because nearly all of those.

them sign this letter. Right. So the Dumers on the board of Open AI that pushed out Sam and Greg, they want to slow down AI in the name of safety. But honestly, it looks like with the fact that they sparked this AI mutiny and the fact that Sam and Greg are now at Microsoft, which is a $2.7 trillion corporation that has no nonprofit board governing it, they may have kind of backfired their cause and cause these accelerationsists of AI to only gain more power. I would say just scanning the AI Twitter verse and just kind of keeping your eye to the ground of what's going on in the tech conversation that they are in the severe minority now. But we talked before the show, you're kind of more sympathetic to what they're talking about.

Yeah. Remember, the board's picked to replace Altman is ex-Twitch CEO Emmett Shear. He is a no-in AI skeptic. He recently said on a podcast that the risk of Doom from AI is so scary that you should S your pants. And so a recent clip has been going around and going Vyla right now. And basically what he's saying is that AI can begin to start solving problems like programming, chip design, material science, power production, all the things you need to actually design artificial intelligence. And so at that point, you can kind of point AI back on itself and it can begin replicating itself without humans within that loop.

That scares me because a self-improving loop will make AI so much smarter than us, so much faster. Can you imagine it starts manufacturing the chips it requires to train itself? It becomes very scary and that's why you keep seeing these existential threats against humanity. And he put it very well for the first time. I thought about that loop developing and I said, okay, maybe it is time we rein this thing in. Just to take the other side, you know what scares me is global pandemics and extreme weather events that cause billions of damage and kills a lot of people. one way to mitigate those existential threats is to develop AI.

Last week we talked about AI weather forecasting, absolutely crushing traditional models. So the Sam Altman accelerationist view of many in the tech community is we need to develop this as fast as possible. Because as Andreessen Horowitz leader, Mark Andreessen said, and I don't know if I'd agree with him, but this is what he said, that not developing AI fast enough is akin to murder because we're not preventing deaths that we could have. So that's why I said at the top of the show that this is a battle for the soul of AI. You're seeing the split happen in real time. It's happening at OpenAI right now, but it's really happening across the tech community, and you're starting to see these tribes form. And right now it seems like the accelerationists are winning out.

Right now there's another battle going on. A driverless car company is also a leaderless car company right now. Kyle Vott has resigned as CEO of Cruise, the self-driving car. unit of GM following a tough few months for the company. The move comes after a cruise incident from October where a pedestrian was knocked in front of a cruise car by another vehicle. The video shows the Robotaxi, aggressively breaking as it should, but the DMV's order of suspension found that Cruz withheld another seven seconds of video footage that shows the Robotaxing, attempting to pull over in dragging the woman another 20 feet in the process. It's obviously a very bad look for

cruise and led to California regulators pulling the company's permits to operate in the state. Combine that with various other embarrassing traffic snarls and mishaps, it's endured, and public trust of the company has reached an all-time low. It was clear that it's time for a change deal, but where does this leave GM who sunk a lot of money into this thing? This is a huge setback for GM and the autonomous vehicle industry. In general, back in 2016, GM bought crews for $1.1 billion. And a lot of legacy automakers did get into the autonomous vehicle space then, but they've been kind of backing out Ford sold its stake in Argo, which was its autonomous vehicle unit.

And they're saying, look, this is just not worth it. Let's stick with our bread and butter. We already got enough going on with electric vehicles. There's already enough flux in this industry. We don't need to be a part of this very expensive autonomous vehicle project anymore. but in GM has only tightened its ties with Cruz and right now it's not looking like the right bet it wanted to get a billion dollars in revenue by 2025 from Cruz and right now this thing is in complete shambles yeah GM has envisioned spending around 700 million dollars a quarter

basically on regulatory legal and reputational problem so it's just this unending money pit right now it remember yeah I bought it for 1.1 billion so far the unit has cost GM for $5.7 billion, so it has not been net positive in any way. And let's talk about VOT a little bit, the CEO who actually did step down. He actually is very Uber-esque in the way he approaches things. He wanted to bring as many cars to as many markets as fast as possible. He thought it was kind of this Uber-Lift scenario. Remember, Uber just wanted to blitzkrag the market.

They wanted to jump into as many cities as they could. He wanted to do that. But obviously, whenever you have any one of these public mess-ups, it reduces trust. And right now, I think that's the biggest issue with Cruz is you see one of those cars around. No one likes it. No one wants to see it. And there's just no trust in that these can behave safely. This is the part of the Uber comparison.

He probably doesn't want us to make. But in 2018, an Uber self-driving car hit and killed a pedestrian in Arizona. And that led Uber to withdraw from the autonomous vehicle market. So, I don't know, just these past few years, self-driving cars seem to be inevitable. They were making progress. They were testing on roads in California, in Arizona, in Texas. And this is kind of the first news story where I've taken a step back, and I'm like, maybe they're not doing great.

Maybe they're not inevitable at this point. I mean, they're so expensive. You can't mess up once. I mean, we talked about Starship yesterday. You can send a bunch of rockets and blow them up all you want. If you just have one mistake on a road with a self-driving car, then you're going to lose public trust, even if ultimately it will be much safer than human drivers, which I also believe. Also, how about this?

Neil Vott was also a he was a co-founder of Twitch alongside new open AI boss Emmett Shear. So definitely a crazy, crazy small world in Silicon Valley where everyone knows everyone. But obviously none of those two are in a great place to succeed right now. No, let's go to Argentina. That has no relation to Twitch. But everyone is wondering, what radical plans proposed by president-elect Javier Milay? Is he actually going to follow through with? Remember, the self-described anarcho-capitalists won the election on Sunday,

and he's promised to shake up the country with his anarcho-capitalist ideas. One of those ideas is dollarization, which is a big deal and complicated. And Toby and I want to break it down for you so you can break it down for your family over Thanksgiving dinner. At a high level, dollarization means exactly what it sounds like, switching out your country's local currency and adopting the U.S. dollar instead. The goal is to stop inflation. Argentina is experiencing hyperinflation, with prices jumping 140% annually. Miele thinks that switching over to the dollar will drastically reduce inflation in Argentina

because it strips away the power of the central bank to print money. You basically say, here, U.S. Fed and Jerome Powell, make all of our monetary policy decisions because we are not capable. And Millet would be more than happy to get rid of the peso. As the peso has plunged in value, he's called the currency worth excrement, and it melts like ice in the Sahara Desert, vivid. So, Toby, you're a noted economist. Do you think this dollarization plan could work?

I am a noted economist. Thank you, Neil. This is notable because even though a handful of other smaller nations like Ecuador, like El Salvador, like Panama, have done this. No one truly on the side. or scale of Argentina. And this is going to be very difficult to pull off. It's a huge financial challenge because the central bank would need enough dollar reserves to not only purchase all the currency currently in circulation, but also to provide a cushion to the banks in case

maybe a bank run happens where people start trying to withdraw all their money. Also, Argentina is kind of broke. Economists say the country doesn't have the funds to carry this out at all. In recent years, the country has kind of lost access to global. debt markets as well, which is one way you could fund this. So even though Miele is coming with, like, I'm going to pull this off and going to dollarize the economy, tons and tons of financial challenges standing in his way. Yeah. Another reason that people say this is a bad idea is, you lose, like I mentioned at the beginning, you lose your monetary sovereignty, you lose your power to do anything with your money. So right now, so they would rely on the Fed for all of this monetary

policy, basically. And so right now, we have very high interest rates. in the United States. Well, what if Argentina does not need high interest rates right now? They need low interest rates to spur to the economy. That mismatch creates a lot of problems. So experts say this is really kind of the option of last resort. This is the nuclear option when everything else doesn't work. And it's a true capitulation and admission of the fact that you can't get your own stuff in order, so you have to dollarize. And it is really the last resort that you should take because you lose all of the power to make your own decisions that would benefit your country? It's an option of last resort, but it's not a silver bullet. It's not

going to fix any of the structural issues of your economy. The one thing it does do is it provides stability, which is what Argentina wants at this point, because right now, I mean, the peso, you have to take little duffel bags full just to do anything. And so a lot of people are saying that Argentina had already lost its monetary sovereignty, its authority to do what you want with your money, because if the money's not worth anything, then it's, it is literally worthless. That's the definition of it. We should say in Panama, Ecuador, and El Salvador, where dollarization has happened, it's been generally pretty decent. Inflation has come down from soaring levels there to more

manageable levels there. But those countries' economy haven't grown that much. So you can say, okay, but they brought down inflation, but it wasn't, like you said, this silver bullet that fixes all of their problems. All right, Neil, before we make the decision to dollarize this podcast, let's take a quick break. Study and play. Come down. together on a Windows 11 PC. And for a limited time, college students get the best of both worlds.

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book it with Price Line download the Priceline app or visitpriceline.com actual prices may vary limited time offer. Neil, CEOs are obsessed with using the word choiceful in earnings calls, and I want to talk about it in today's edition of Toby's Trends, where I, a strapping Gen Zier who loves Hunger Games, educate you a millennial who loves Harry Potter,

about a new trend I have my eye on. We've all gone through the phase of learning a new word and using it constantly. Sam, our associate producer of this podcast, taught us Slay, for example, and now we use it all the time. So far in earnings calls, choiceful is that word for CEOs. It has appeared in 15-quarterly earnings calls for S&P 500 companies this year, up from just two in 2021. It's their favorite word to describe things like consumer spending behavior or their own company strategies. Walmart CEO, Doug McMillan, used it to describe the average consumer who is trying to cut back on spending but is willing to splurge on stuff that's worth it.

McDonald's CEO, Chris Kepensky, used a word to characterize the company's strategy on price. increases, and I might use it to describe hair and makeup's decisions to come into work or not. But, Neil, I think what's drawn CEOs too choiceful is that it's reassuring to investors that they are making deliberate and particular moves to navigate through this year's unusual economy. It imbues trust without being overly committal. I like it, Neil. Choiceful. I hate it. It means nothing. It means multiple different things. It's the beauty of it. This is, classic corporate gobbledygook. My question is, where did they find this word? because it is rare.

The Oxford English Dictionary says it appears 0.002 times per million words in modern written English, making it a part of a group of words that are not a part of normal discourse and would be unknown to most people, which makes it perfect for CEOs because they can say it and no one knows what they mean. That's what I'm saying. That's why I like it is because they found this meaningless word that you can imbue with whatever you want it to mean. It is both saying that we are making decisions without being too committal at the same time and it always implies a bit of a chance that you can change your mind so that's why i think it's perfect and we're only going to see it being i'm just very i'm curious about where they heard it

yeah i know because it was interesting because i wrote it in my my google doc to prepare for the show and it didn't give me the squiggly red underline but then i went i actually went and right clicked it and said define it nothing came up it's not a word right you have to go the only one that says it is the oxford english dictionary it doesn't appear in dictionary dot com or anything like you that. I just went through some of their quotes and replaced some replace choiceful with better words that people would understand. So the McDonald's CEO said, certainly given the inflation that we've experienced over the last year, we've tried to be very choiceful and disciplined on how we've executed those price increases. I mean, just say thoughtful. To be very thoughtful and disciplined on how we've

executed those price increases or discerning. Like, choiceful means nothing. I love it. Okay, the world was informed of a potential catastrophe this week when the telegraph reported that Ardman animations, the famed stop motion studio behind Wallace and Gromit in Chicken Run, was running out of clay. The report said that new clay products, which makes the specialized clay used by Ardman, shut down earlier this year when the directors retired and they couldn't find anyone to take it over. And that could put future productions from Ardman in jeopardy. This was devastating news for all of us who dressed up as Wallace for Halloween as a kid,

but perhaps a ray of hope. Ardman assured the public that had had enough clay on hand for upcoming production, but only because a new its supplier was shutting down and hoarded the rest of its clay stock almost 900 pounds worth. That should be enough for two years. Toby, I am calling on NATO to deploy forces around the warehouse that's currently holding the remaining clay. This could be the most precious resource we have on Earth right now.

Absolutely. And this clay is amazing. Apparently, it's, quote, an animator's dream because it has the right pliability and ability to keep its shape, especially under hot lights of kind of this stop motion animation movie set. And I went down a deep rabbit hole, obviously, watched some videos about one of the big challenges when making stop motion films is keeping a consistent color of the clay itself. Because remember, you're filming this thing over one and a half years. So you can't just mix one batch and use that for the rest of time.

And the way that they pull it off is literally there's a color expert who just does it by feel, does it by eye, because he says the samples they receive from the factory vary in the amount of pigmentation they have. So he's sometimes adding some, sometimes taking some away. Can you imagine just eyeballing it? And you have to match it perfectly because you need continuity through the movie. Incredible process. This is not the most efficient way to make movies. You said it takes a year and a half. And that's because each worker can produce a second of footage per day.

That's crazy to me. So when you look at what's happening in animation and I just assumed everything was happened on computers. And then you read about Ardman and they're like, we don't have enough clay to make our movies. It's a real moment of reflection where you're like, these people are doing something that is absolutely fascinating. Yeah. And one of the, they were reminiscing on that Telegraph article, some of the animators said that it took them four and a half months to produce a single 30 second scene. Can you imagine working on anything for four and a half months and

just seeing it for 30 seconds out there? But it makes the magic of the movie even greater. Now that I know about this, I'm going to watch Watson Gromit. And the big news here is that there's a chicken run sequel coming out in December, which I need to absolutely go to now. Now that I know that it's made from this particular clay, and that this might be the last movie ever produced out of clay because they're running out. They did say, though, that they have been innovating, and they think that they found a replacement material for it. But, yeah, that would be a good financial play, by the way, as you buy up the last

remaining stock and say, hey. I'm saying, this is valuable. We've talked about how olive oil is being stolen because it's so expensive. clay. This clay is gray gold, I guess, not even black gold at this point. Grey gold. All right, Neil, if you thought you had a good day yesterday, I bet you Liberty and Bell have you won up. Those are the names of the two turkeys President Joe Biden spared yesterday, continuing the White House tradition of pardoning some foul before Thanksgiving dinner. Neil, this whole spectacle requires some digging into. First of all, these birds are huge,

42 pounds each. They came from Minnesota in a black Cadillac escalade. They listened to music and other sounds as they traveled to prepare for the hoopla on the White House lawn. Steve Lichen, chairman of the National Turkey Federation, said that he, quote, can confirm they are in FACS with these, and they do enjoy some prints. But the National Turkey Federation, who is in charge of supplying the birds for the pardoning, doesn't just pop into Washington for a fun photo op. It's actually also a lobbying group. It's not a crazy big spender, but consistently drops around $150,000 a year, lobbying for things like animal. drug regulations and food labeling. So of course, the most American of holidays has their tradition put on by a lobbying group at the White House. Of course. There's a huge mystery around how this

tradition started. There's a lot of lore. This is what DC people love to talk about. It goes back to even Abraham Lincoln, who allegedly pardoned a turkey around Thanksgiving after his son asked. The modern history of the turkey pardoning appears to have started in 1947 with Harry Truman when he was gifted a turkey in the post-war years. But over the subsequent decades, it didn't seem like these presidents actually pardoned the turkeys. They were photographed with them, but they ultimately ate them afterwards. And the pardoning didn't really get started until 1987 when Ronald Reagan.

And what's interesting about the Reagan thing is that he kind of said it in an offhand remark because he wanted to distract from reporters' questions around the Iran-Contra affair. Somehow the turkeys got looped into a massive global. events. But yeah, H.W. Bush was the first to offer a official turkey pardon, and presidents have been doing it ever since. Also, it was Joe Biden's birthday yesterday, and he made some joke kind of about his age. He says, I just want you to know it's difficult turning 60. And he also said that this is the 76th anniversary of the event. So who knows when he thought it actually started? And he said, I want you to know I wasn't there for the first one.

So he was, yeah, ha, ha, ha, exactly. But I also want to talk about pardon turkeys, where they actually go after they've been parted? Obama sent his to Mount Verdon. H.W. Bush sent his to frying pan park in Virginia, and Liberty and Bell are going to the University of Minnesota. And oftentimes you see the president say things like they're going to live out the rest of their years in like quiet sanctuary. They're going to have great lives. But their lives definitely don't last years because these turkeys have been bred in order to be eaten. And so they are much, much bigger than natural wild turkeys. And the problem is, is that their bodies are so big that their organs, which are meant for much smaller birds,

can't support the weight. So it's kind of a very sad thing. Even these turkeys that are supposed to live in luxury for the rest of their days, don't have that many days left. On that note, that is our show for this Tuesday. A reminder, if you're brining your turkey, you're going to want to start getting that ready, T-minus two days. Want to get a hold of us for any reason?

Email Morningbrewdaily at morningbrew. dot com and we'll do our best to respond. Let's roll the credits. Emily Miliron is our editor and producer. Samantha Velas is our associate producer. Euchenawa Ogu is our technical director. Billy Menino is on audio, hair and makeup, we pardon you.

Live and let live, right? Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Pay off your home, travel for life. Drive a Ferrari. In celebration of the world premiere of the Monopoly Big Board Buckslot machine by Aristocrat Gaming, Yamava Resort

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