Morning Brew Daily - OpenAI’s Safety Team Reaches Breaking Point & UAW Takes Big Blow in the South

Episode Date: May 20, 2024

Episode 326: Neal and Toby discuss the internal shakeup (again) at OpenAI. This time, the team wanting long-term AI safety said, “We out.” Then, the UAW’s campaign to unionize the South hits a roadblock with Mercedes-Benz in Alabama voting against unionizing. Plus, Minnesota reaches a minimum driver pay with Uber and Lyft. Also, Manchester City and Blue Origin are this past weekend’s winners. Meanwhile, the popularity of THC-infused drinks is starting a turf war between the cannabis and alcohol industries. Next, sunscreens in the US are far behind the rest of the world…what’s up? Lastly, what you need to know this week before you enjoy your Memorial Day weekend.  Visit https://www.sage.com/morningbrew for more! 00:00 - Intro  02:20 - OpenAI Safety  06:30 - UAW loses vote 09:30 - Rideshare in Minneapolis  11:00 - Winners of the weekend  15:00 - Sunscreen in the US 18:00 - THC Drinks 21:25 - Week Ahead Get your Morning Brew Daily Mug HERE: https://shop.morningbrew.com/products/morning-brew-daily-mug?utm_medium=youtube&utm_source=mbd&utm_campaign=mug 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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pwc.c.com slash US slash brew AI. That's pwc.com slash us slash brew AI. Good morning brew daily show. I'm Neil Fryman. And I'm Toby Howell. Today, more leadership turmoil at OpenAI. Can Sam Altman plug his leaking ship? Then how come our sunscreen in America is so much worse than other places around the world?

It's Monday, May 20th. Let's ride. The New York City to Dublin portal is back open. The giant circular art exhibit that connects the two cities via live video. feed was shut down due to some unsavory behavior on both sides of the Atlantic, but with some new preventative measures intact organizers flip the switch back on five days after it went dark. The biggest change, instead of a 24-7 video, the portal will only be live from 6 a.m. to 4 p.m. So maybe we can have nice things after all, as long as those things are only open from 6 to 4. No happy hour at the

portal. What are some of these measures? They're going to have on-site security during those hours of operation. They're also going to put up signage and have a fence. I'm not sure that accomplishes the goal of not flashing people because you can still do that. Not that we're recommending it, but you can still do that with what these security measures. So I don't know exactly what they're trying to prevent here. But I guess it's like people get intoxicated after 4 p.m. And maybe that's when the shenanigans ensue. Yeah, I am glad that the portal is back open. But I think this has revealed a lot about the human condition, and the human condition maybe needs some restrictions from time to time. Now let's hear a word from our sponsor, Sage, not the herb, but a tool that saves

finance professionals, a lot of time, money, and headaches. We talk so much about AI on the show, but Sage is a great example of how AI can actually help in the real world. Sage uses the power of AI to review thousands of transactions in just minutes so you can get an up to the second view of your business performance and aren't bogged down by tasks that can be. handled with Sage. Sage's AI is like a really attentive worker who never misses anything and constantly keeps you up to date. Kind of like Neil now that I'm thinking about it. Close, but I need a little more sleep than Sage's AI. If you're interested in having your own time saving, reassuring, and confident kneel around, check out sage.com slash morning brew. Sage, helping businesses flow.

Well, OpenAI's leadership team of Super Nerds is beefing again, reviving conflicting visions about the future of artificial intelligence within the company that's driving the AI revolution. Last week, two long-serving execs resigned from OpenAI. First, co-founder and chief scientist Ilya Sutskever followed shortly by company vet Jan Leika. In explaining why he quit, Lika wrote that over the past years, safety and culture and processes have taken a backseat to shiny products and his disagreements with Open AI's leadership had reached a breaking point. As you might have gathered, Sutskev and Lika are deeply concerned about AI's long-term threat to humanity. They co-led the company's super alignment team, which was formed last year to study the existential

risks posed by AI that's smarter than humans. But they and CEO Sam Altman do not seem aligned on how to tackle this problem. As Altman ramps up the money-making part of the business, his critics say he's prioritizing profits over safety. Remember, that led to his firing by the board last November, which failed spectacularly, and he was reinstated within a week. Toby, what is going on at OpenAI? I think that since that board kerfuffle in November, Sam Allman has increased his grip even more so over Open AI since that went down at least five of the company's more safety conscious employees have either quit or been pushed out. Not many employees are speaking about this publicly either because there was this another controversy too because Open AI requires its workforce to

these really kind of stringent off-boarding agreements with non-disparagement clauses in them. There was also some rumors that there, if you could give up your equity in the company, if you said something about Open AI, Sam Alman came out and said like, yes, that was a ProVision. We took that out. So there's been a lot of more coming out about the level of control Sam Altman has over the board and the level of control OpenAI is exerting over its employees when they do end up leaving the company. Let's talk about the concept of alignment and super alignment.

What is that? It sounds very jargony, and it is. An AI alignment is an actual concept, and it describes whether a machine has the same goals as its human creators. And making sure the machines and humans are aligned becomes extremely important, super important, when the AI becomes super intelligent because without alignment, the downside would be human extinction, according to some safety researchers. Open AI is trying to build a superhuman intelligence. I think this is called artificial general intelligence.

It is the goal of open AI since it was created. Some people at Open AI think they're going to create artificial general intelligence within the decade by 2030. So these researchers said we have to get out ahead of this because if machines and humans don't have the same goals, then it could really realistically lead to humans getting wiped off the map. And then even though Elia has since left the company, there's been rumors that for the last six months, he hasn't even been in the office. He's been co-leading, he's been leading the team remotely, the super alignment team. So it clearly hasn't been a priority for a while now. A lot of people, the knock on Sam Altman is that they're just going ahead with commercializing the product. Full steam ahead.

They just rolled out that like Siri replacement, their voice activated assistant. And they're not really taking super alignment very seriously. Even when the team was at full capacity, they were only promised around 20% of Open AI's computing power. And computing power is gold at these companies. you need computing power in order to conduct the experiments that you want to conduct. So even though the team has been hollowed out before that, they were very hollow to begin with. Yeah. So we'll see what happens at OpenAI.

It's an $80 billion business now. And it doesn't seem... Altman did respond to Lika and Sutskevarez saying, look, we take your concerns seriously. We need to do more. But it doesn't appear like they are driving any shift change within Open AI. And it's going to be full steam ahead. What was the result of the United Auto Workers Union vote?

at a Mercedes-Benz plant in Alabama, and were Uber-Lift in the city of Minneapolis able to come to an agreement on driver pay? We're going to circle back on both those stories today to tell you how things shook out. For those of you just getting up to speed on the UAW vote, there was this important showdown between the union and workers at a Mercedes-Benz plant

near Tuscaloosa on Friday. The UAW felt good about its chances fresh off winning a union election at a Volkswagen plant in Chattanooga, Tennessee, but the auto workers decided against joining the U.A. union. The result was very close. 56% voted no, while 44% voted yes, but a loss is a loss. Neil Sean Fane, the union president, said that losses are part of the process and they'll carry on and keep fighting. But this definitely was a blow in his attempt to, quote, win the South,

especially after having success in Tennessee. Right. Well, definitely slow down the movement. They scored a huge victory in Chattanooga. I think more than 70% of workers voted to join the union there. This Mercedes plant, there were two of them. This is another, this was too big. There was over 5,000 workers at both of those plants. And I think the main difference between Volkswagen and Mercedes, Mercedes launched a big anti-union drive. They pushed back. Volkswagen did not put up much defense. So they kind of steamrolled through Chattanooga. But when they went to Alabama, there was a lot of pushback, including from the governor who warned that unionization would lead to a lot of job losses in the South, where, which has been a huge.

huge beneficiary of all these automakers setting up shop in this region. Right. This likely says more, too, about Mercedes-Benz and Volkswagen than the actual maybe feelings of the workers there, because you're right. Mercedes-Benz did do a lot more to prevent this union. The National Labor Relations Board said it's investigating six unfair labor practices, stuff like disciplining employees for discussing unionization during work, their surveilling employees, prohibiting the distribution of union material. So there's definitely a push against this union. The general consensus I've been seeing, though, is that this is not a horrible loss because

it gives the UAW a chance to just see where they're at in the south. They had that important victory. The Mercedes plant was a little bit bigger. And the vote was close. So even though some of that momentum, that role has been slowed a little bit, it's not the end of the world in their union push in the south. Now let's circle back on the other auto-adjacent story that we've got some closure on this weekend.

So Uber Lyft in Minneapolis, Minnesota, have been locked in a three-way challenger-esque duel. Over the details of a minimum wage law for nearly a year now, Minneapolis initially adopted a rule that mandates drivers be paid at least $1.40 per mile or $51 per minute. Uber and Lyft said it made their business untenable and threatened to pull their services from the city. But over the weekend, the two sides struck a deal that institutes a statewide minimum wage for rideshare drivers that comes out to $1.28 per mile. in 31 cents per minute. So a little less than initially proposed, but still a 20% increase in pay for drivers, according to lawmakers.

So Uber and Lyft aren't leaving after all. No, what seemed to have happened here is that Minnesota state lawmakers looked at what Minneapolis did and said, guys, come on. Like, we can't have Uber and Lyft leaving here. A lot of people rely on them. So at the state level, they worked with Uber and Lyft

to work on a compromise for a minimum wage for drivers that overrode the city's measure. So we talked about this with Uber CEO Dara Koshahi on our interview that was published on Friday. Just quick plug right there, or published on Thursday, excuse me. And he kind of called in the question both sides of the user experience when you see these things like minimum wages for drivers come up because it's a two-sided marketplace. If you jack up driver pay, that is then passed on to customers and then potentially less people start losing the service, which ends up with less business going driver's ways in general. So Uber was definitely saying, like, we have more data around this that we'd like you to consider. And it looks like they've reached kind of a middle ground here, which is kind of what you want in any scenario like this.

It's just incredible how much leverage Uber and Lyft have when going into these negotiations. Because when they threaten to pull out, it could lead to a lot of job losses for drivers. And so they can go into these negotiations with a really upper hand. And they rarely leave a city when they say they do, which critics say is you're just bluffing. but they can go into these negotiations with a lot of leverage. Okay, we are on to our winners of the weekend now. Neil and I got some golf in and watched a lot of sports, so I'm inclined to just say, it's us and move on.

But there were some important things that went down outside of me shooting 79 that deserve a mention. Neil, you want our pre-show parallel parking contest, so you're up first. Who's your winner of the weekend? That's right. Yeah, I learned in the mean streets of South Philly. My winner is Ed Dwight, who is a perfect example of why you should name.

Never give up on your dreams. Back in 1961, Dwight was selected as the first black astronaut candidate by NASA, but never made it to space. Fast forward to yesterday, and Dwight finally got his chance to see the curvature of the Earth. He was one of six private passengers to travel aboard Blue Origin's New Shepherd Rocket, which flew to space and back in a 15-minute flight. At 90 years old, Dwight became the oldest person to ever go to space, beating William

Shatner's record by just a few months. Dwight isn't the only winner from this story, though. For Jeff Bezos's Blue Origin, this was the first passenger flight in nearly two years after he took its rocket back to the garage for some work. This whole space tourism business has been slow going. But so far, Blue Origin and Richard Branson's Virgin Galactic have now flown more than 60 people to space since 2020. And yesterday's flight was a small but important step forward to regain momentum.

Yeah, I do just want to circle back to Ed Dwight real quick again because he said about the experience. I thought I didn't need in my life, but I lied. I really, really did need it because, Edwight, even though he was the nation's first black astronaut candidate, he never ended up going to space. So it was like this very good full circle moment of closer for him.

And he was hyped about it. I mean, of course you would be hyped going to space, but especially him, it felt like it was something that his life needed and he was really pumped about it. Yeah, he was so pumped and he wants to go back. And he's like, I'm not just satisfied doing this 15-minute flight to about 317,000 miles. I want to go into full orbit and see the full curvature of the earth.

My winner of the weekend is the English Premier League's Manchester City for winning the record-breaking fourth league title in a row. Another team in history, not Sir Alec Ferguson's Manchester United or the Chelsea teams of the early 2000s, have accomplished this feat. So as much as it pains me to say this as a Manchester United fan, Manchester City is truly in a league of their own. This run of unprecedented informed comes after Sheikh Mansour bought City in 2008, bringing with him immense financial resources as a member of Abu Dhabi's royal family. All that money has come with incredible success, but also controversy.

There's a cloud looming over city in the form of 115 alleged breaches of its financial fair play regulations over periods spanning nine seasons. You know, Manchester City's reign of terror has continued for this sixth time in seven seasons, but we might have to apply some asterisks once these cases make their own. way through the courts. We'll see. This just goes to show how Gulf money is transforming sports, soccer, golf, boxing. I mean, the, the boxing, big boxing match this weekend was in Riyadh, Saudi Arabia. And I think it really came to the four in 2008 in soccer, in global soccer, when the Emirati money came to Manchester City. You have to give a lot of credit to the coach,

Pep Guardiola, who brought a new style of play to the Premier League as well. But you can't, you can't mess with all these billions that this, uh, this sheik. started pouring into Man City and it might have been improper. They're investigating whether this guy sort of improperly inflated the financials, the bottom line of Man City by saying that by inking sponsorships with Abu Dhabi firms like Etihad, 67.5 million pounds per year when actually Etiad only poured $8 million in and the rest was kind of topped off by this guy. So that's what they're looking into with these 115 alleged breaches. Yeah, inflating some sponsorship deals, maybe hiding some player and manager salaries.

These are stuff that you can't do at the highest levels of European soccer and are in violation, but they're going to make their way through courts. There's a lot to be mad at as fans of not Manchester City in the league, but you can't fault the players or the coach for just winning when they go out there. Up next, some stories about sunscreen and weed drinks. Not loving your AT&T or T Mobile Bill.

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Memorial Day is just around the corner and many of you are about to head to the store to load up on sunscreen for your beach weekend. but as you scan the shelves, you might be wondering, why is American sunscreen so awful? Why isn't there sunscreen that effectively blocks UV rays and doesn't make you look like Casper the Friendly Ghost at the same time? Well, there is an explanation for this. In the U.S., sunscreen is regulated as an over-the-counter drug, which means the FDA has to evaluate and approve all ingredients individually

before they can be marketed. And that's not the case in Europe or Asia, where sunscreen is considered a cosmetic, and formulators there have far more ingredients available to mix and match. And that is why sunscreen found in foreign markets is considered far better than the sunscreen we have here in the States. Congress tried to fix the problem in 2014 when it passed the sunscreen Innovation Act, that's a real thing, to speed up FDA approval of sunscreen.

But that hasn't really worked and we're still stuck with sunscreen from the Stone Age. Toby, having sunscreen that people will actually use is a big issue for public health. it prevents skin cancer, which is the leading type of cancer in the U.S. Yeah, and the disease costs of healthcare system around $8.9 billion a year, according to CDC researchers. And that's the most frustrating part. Unlike most forms of cancer, skin cancer can largely be prevented by using sunscreen, and yet we are caught in like the stone age of sunscreen research

because the FDA is just moving at a glacially slow pace, even though Congress, even though a lot of these manufacturers are pleased saying, just free us up. We want to use ingredients that are used all around the world. Just give us the chance to do that. People aren't dying from using sunscreen. They're dying from melanoma in skin cancer. So it is just this weird wrinkle, pun, not intended there, of the U.S. healthcare system and the FDA that we cannot get good sunscreens out there.

Yeah, let's give the FDA's argument here because we should give them some real estate. They say that, you know, people are using sunscreen now daily. They're not just using it to go to the beach. and at times when there's peak sun, it's part of people's skincare routine, and therefore it should be regulated. There should be a safety review of these ingredients that go in, just like anything you would use a daily from your medicine cabinet. So that's what they're saying.

I think the majority of people that you read say that this is a bit of an antiquated system, and we only have, you know, eight, they only, sunscreen makers in the United States only use eight active ingredients compared to dozens around the world. We also look to the EU as pretty intense regulators in pretty much every sector. They've approved a ton of stuff. And so the FDA does feel like it's falling behind the rest of the world here. And Americans are suffering from it. There's also another angle here.

There's a campaign from sort of that raw milk influencer crowd where a lot of these wellness influencers are actually touting the sun's natural processes in saying that it's sunscreen that's making us sick instead and sunscreen that's giving us cancer. Even Tom Brady in this 2017 book says, all he does is drink water to help prevent sunburns. That's not actually true. So there is this wrinkle, this health influencer wrinkle as well that is kind of promoting people not using sunscreen. Instead just saying like the sun is the best thing in the world for you. So there is a lot of discourse around sunscreen.

You're right. As we're ramping up for Memorial weekend, it's important we talk and tell the people why our sunscreen isn't as good in the U.S. as it could be. Okay, now I want to talk about weed drinks. No, not CBD drinks, which include the non-psychalactive ingredient of cannabis plants, but THC-infused drinks, which is the ingredient that gives you the giggles watching planet Earth at night. Alcohol distributors and marijuana companies are both competing for a stake in this new money-making product category. Internet searches for THC lace drinks have reached an all-time high in 2024 per Bloomberg, and even mainstream

magazines like Bon Appetitin and Esquire have recommendation lists for Happy Hour highs. Now, if it feels like weed drinks probably shouldn't be, you know, legal, you're kind of on the right track. According to Bloomberg, they were only inadvertently legalized as part of the 2018 Farm Bill, which allowed hemp to be grown for manufacture. Hemp is a weaker form of the cannabis plant that contains a smaller amount of THC. So drinkmakers have exploited this loophole tossing distilled hemp in their product like they are wine, turning grapes into wine. Neil, weed drinks.

You've said your friends have started talking about this more. And using it. Yeah. I mean, maybe other people have had the same experience as maybe. You go to a weekend away with the boys. And instead of bringing, you know, beer or booze and, you know, other marijuana products, you get, like, weed drinks. And people are just drinking these weed drinks because you can walk into a total wine

and just buy them because somehow they're legal because of this loophole in the 2018 farm bill, even though cannabis at a federal level is not legalized, but you can make drinks from them. So it is this weird, strange, liminal space that these weed drinks are occupying where they're completely legal. A lot of states are pushing back against that. But for the beer industry, which is suffering mightily beer sales have stagnated or even declining. They're losing a lot of market share to cannabis during dry January. You know, like marijuana sales absolutely surge.

So young people are using cannabis way more than they're drinking. So for beer companies, this is a huge lifeline because their market share is imploding. And they're like, please, let us get into this space because this is an actually growing part of our industry. One party that is not so happy about this, though, is traditional kind of marijuana companies that sell like the budded plant or like rolled joints or something like that because they are subject to a ton of regulation. They can't ship interstate. They can't work with large national banks or accept credit cards. They can't take tax deductions. and yet here comes these hemp-infused drinks, these THC-infused drinks, that can circumvent all those because of this weird wrinkle in the farm bill.

So there is, alcohol distributors are a lot, we can keep it open, maybe traditional marijuana companies are saying this isn't fair. So there's a lot of interests on both sides. Meanwhile, people are very interested in this product category. Yeah, I think people do like these drinks a lot. But another part of this story that's fascinating, it just feels like the beer alcohol industry is, just linking up with the cannabis industry in many ways. We know that beer companies are getting into cannabis, but at the same time, cannabis companies are getting into beer, Tilray, which is that big cannabis giant, bought eight different beer and beverage brands from AB InBev, including

Shocktop, Blue Point, Brecker Ridge Brewery. So Tillray, which is a cannabis company, is now the fifth largest craft brewer in the United States. So this is a two-way street where both of these industries are just getting up together like, hey, you can get people. buzzed, hey, I can get people buzzed. Let's get up together and offer a wide variety of products for anybody who just doesn't want to, you know, be sober right now. Finally, here is what you need to know about the week ahead. All eyes are on Iran's next moves after its president and foreign minister were killed in a helicopter crash yesterday. President Abrahami Raiisi was an ally of supreme leaner Khomeini and espoused hardline anti-Western views. So he will not be

mourned by the U.S. and its allies, but his death will set off a scramble for power in the Islamic Republic, which has been waging a shadow war on the U.S. and Israel through its proxies in the Middle East. Back in New York, deliberations in Donald Trump's hush money trial could begin Thursday. Well, unless the former president decides to testify, which he said he planned to do before the trial started, legal experts say Trump testifying would be really tricky for him because it could turn the attention toward his credibility and shift away the focus from any holes in the prosecution's case. Either way, the prosecution's star witness Michael Cohen is expected to wrap up his testimony this week, and then we'll see what happens. Wednesday brings perhaps

the most important earnings report of the year so far, and that, of course, is NVIDIA's. Because of NVIDIA's stranglehold on the AI data center market, it's a barometer for investors to see whether all the AI investments are translating into actual profits. The company is expected to report $24.5 billion in Q1 revenue, which would be a 240% increase over last year. Yeah, it was Jim Kramer who called it perhaps the most important earnings report in the year. And I have to say it, I agree with Jim on this one. It does feel like at this point, one Fed rate cuts determine which way the market is heading, but then 1A potentially is what Nvidia is doing and how it foresees kind of the demand for

its AI empowering chips going forwards. And then Microsoft is holding its build event on Tuesday, and it's the latest in a string of tech giants, including Open AI and Google, last week, to reveal upgrades to their AI assistance. Yeah, the company's also expected to announce how Windows will kind of integrate AI into their PCs. That is a key addition here because that's something that goes slept on a little bit, is that Microsoft just has this massive penetration into the PC market.

So what does an AI PC actually mean? Basically, you add a neural processing unit, an NPU instead of a CPU, it just is better equipped to handle AI tasks. So that's definitely something that people will be keyed in on this week. The NBA's conference finals are starting on Tuesday with the Boston Celtics hosting the hot shooting Indiana Pacers in the east. They get no respect.

On Wednesday, the Dallas Mavericks face the Minnesota Timberwolves in the West, Toby. I think it's a Celtics Wolves finals. It's just coming down to that. That's my prediction. You have it on air. And then at the movies, Furiosa, a Mad Max saga, begins its much anticipated to be in theaters on Friday.

It's the prequel to 2015's Mad Max Fury Road and stars Anya Taylor Joy and Chris Hemsworth. Supposed to be great. Some of my friends were like, I don't get Mad Max. It's just one long card chase. I'm like, that's actually you do get Mad Max. That's the whole point of it. So I'm very excited for this as well. And then finally, I know I mentioned it earlier, but Memorial Day weekend kicks off on Friday.

One of the best weekends of the year. There's a lot of sports on as well on Sunday, just a big day. The Indy 500, the Monaco Grand Prix, and also the start of the first. wrench open. I can't wait. It's going to be fun. All right, that is our show for the day. Thanks so much for listening. Have a great week. Can't wait for Friday. For any feedback on the show, send a note to our email, Morning Brew Daily at Morningbrew.com. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Olivia Graham is our associate producer. Lonnie Fiscus is our technical director. Dan Baza is on audio. Hair and makeup only wears

Korean sunscreen. Devin Emery is our chief content officer. and our show is a production of Morning Brew. Great show day, Neil. Let's run it back tomorrow. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage

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