Tech Brew Ride Home - Tue. 11/21 – The Sam Altman Thing Is Nowhere Near Resolved

Episode Date: November 21, 2023

The Sam Altman thing is nowhere near resolved, and what does that mean, especially for Microsoft? Elon sues Media Matters. And if your YouTube videos have been behaving strangely of late, I think I can tell you why. Sponsors: Earin App (enter code techmeme) Traceroute Podcast Links: Sam Altman is still trying to return as OpenAI CEO (The Verge) OpenAI’s Board Approached Anthropic About Merger (The Information) @eastdakota's Tweet Thread on Microsoft and OpenAI Elon Musk Sues Media Matters for ‘Knowingly and Maliciously’ Misrepresenting Amount of Antisemitic Content on X (TheWrap) YouTube is reportedly slowing down videos for Firefox users (Update: Statement) (AndroidAuthority) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Tuesday, November 21st, 2023. I'm Brian McCullough today. The Sam Altman thing is nowhere near resolved, but what does that mean especially for Microsoft? Elon Sue's Media Matters, and if your YouTube videos have been behaving strangely of late, I think I can tell you why. Here's what you missed today in the world of tech. So what if I told you that seemingly nothing has been resolved in this whole Sam Altman situation?

sources are telling the verge that Sam Altman's move to Microsoft is not a done deal. He and OpenAI co-founder Greg Brockman are apparently open to returning to OpenAI if the remaining board members who fired Altman resign. Quote, the promised mass exodus of virtually every Open AI employee, including board member and chief scientist Ilya Suskever, who led the initial move to depose Altman, means that there is more pressure on the board than ever, with only two of the three remaining members. members needing to flip. Altman posted on X that, quote, we are all going to work together some way or another, which we are told is meant to indicate that the fight continues. Altman, former President Brockman, and the company's investors are still trying to find a graceful exit for the

board, say multiple sources with direct knowledge of the situation. The sources characterize the hiring announcement by Microsoft, which needed to have a resolution to the crisis before the stock market opened on Monday as a, quote, holding pattern. After Altman was suddenly fired on Friday negotiations with the board to potentially bring him back reached a stalemate. While OpenAI's management team and investors were vetting candidates to replace the board for Altman's potential return, the board was quietly conducting its own CEO search in parallel. Late Sunday, the board announced that Emmett Shear, the co-founder of Twitch, would be CEO, seemingly putting an end to the possibility of Altman coming back.

There has been a nonstop power struggle inside OpenAI since Friday with nearly all employees against the now three-person board that opposes Altman. Employees at the company's San Francisco headquarters refused to attend an emergency all-hands scheduled on Sunday with new CEO Emmett Shear, according to a person familiar with the matter, who added that they responded to the announcement in OpenAI's Slack with an FU emoji. Later that evening, Susgever flipped on the board, even though he had played a key role in the ousting of Altman just days earlier. His name was on an open letter to the board on Monday calling for them to resign and re-earned. state Altman, which nearly the whole company has now signed. On Monday, employees started posting

on social media that they are continuing to keep the lights on and maintain service stability for OpenAI's developers, which, we're told, is being done to ensure the company doesn't fully implode while the board is pressured to resign. New CEO Emmett Shear has so far been unable to get written documentation of the board's detailed reasoning for firing Altman, which also hasn't been shared with the company's investors, according to people familiar with the situation. He said in a note to employees Sunday night that his first order of business would be to, quote, hire an independent investigator to dig into the entire process leading up to this point and generate a full report, end quote. After this story was published, Microsoft CEO Sachin Nadella appeared on CNBC and Bloomberg TV.

When asked directly by CNBC's John Fort if Sam Altman and OpenAI's staffers would join Microsoft, Nadella said, quote, that is for the Open AI board and management and employees to choose. He followed by saying that Microsoft, quote, chose to explicitly partner with OpenAI, and obviously that depends on the people at OpenAI staying there or coming to Microsoft, so I'm open to both options, end quote. On the topic of whether Microsoft needs a seat on OpenAI's board, he said that, quote, it's clear something has to change around the governance, we will have a good dialogue with their board on that and walk through that as that evolves, end quote. The remaining board holdouts who oppose Altman, are Quora CEO.

Adam DeAngelo, former Geo Sim Systems CEO Tasha McCauley, and Helen Toner, the director of strategy at Georgetown's Center for Security and Emerging Technology. They have so far not responded to the Verges' request for comment, end quote. Yeah, for me, the biggest question mark about this story at this point, aside from how it eventually resolves, is, what's up with the board? Assuming in good faith that they are taking a stand on principle, something about slowing the development of AI, perhaps, it's hard to see how blowing up OpenAI achieves their ends. It seems to be clear that if they were to stick to their guns, the majority of Open AI's talent would just reconstitute itself elsewhere, perhaps under Microsoft's auspices. Like, number one, what cards do they have left to play?

And number two, if one of their points of principle is that they don't want a behemoth like Microsoft calling the shots on AI development, not only does that ship seem to have sailed, but the leverage that they had with OpenAI's nonprofit structure seems to have evaporated as well. This board seems to be the biggest black box here, pun intended, in terms of motivation and strategy, though they seem to be trying something, as was indicated in one of those previous quotes. Sources told the information that OpenAI's board offered the interim CEO role to former GitHub CEO Nat Friedman and Scale AI CEO Alex Wang before Emmett Shear accepted the role. but they're also reporting that the board also approached Anthropic CEO Dario Amo Dye about a potential merger as part of an effort to persuade Amo Dai to replace Sam Altman as CEO, which suggests that they

had some sort of a plan. Quote, it's not clear whether the merger proposal led to any serious discussion. Amo Di quickly turned down the CEO offered due to his position at Anthropic, the two-year-old startup, which sells Claude, a chatbot that competes with OpenAI's ChatGBTGBT, is in fierce competition with OpenAI to recruit researchers and win customers. The proposal for a merger is a major turnabout for OpenAI, which until Friday had been the clear leader in a race to develop generative AI products. Amo Dai is also a former employee of OpenAI, who with a group of others left in late 2020 to launch Anthropic over concerns the company was moving too quickly

to commercialize its technology. Amo Dai has been an outspoken advocate of the the need for caution in AI development. At a conference in September, Amadai stressed the need for increased regulation to make sure AI systems can't be used for nefarious purposes like developing biological weapons. Anthropic has a large team of staff focused on ensuring alignment or making sure the AI reflects human values. The board's decision to approach Amadai for the CEO job stands out in light of OpenAI employee disagreements that preceded Altman's ouster around whether the company was developing its AI safely enough. OpenAI co-founder and board member Ilius Saskervor, who fired Altman, after the board voted to remove him,

had been co-leading a research team working on technical solutions to prevent its AI systems from running rogue. A merger between OpenAI and Anthropic would be a messy situation for Microsoft, Amazon, and Google, who have all used their cloud computing businesses to get closer to one or other of the companies. Microsoft is an investor in OpenAI as well as its exclusive cloud provider. Anthropics signed multi-billion dollar cloud computing deals. with Amazon and Google, which both invested in the AI startup. Anthropic has told some investors it has been generating revenue at a $100 million annualized rate, the information has previously reported, implying it has generated more than $8 million

in revenue per month. Those numbers are expected to grow significantly in the coming months due to a recent deal with Amazon Web Services in which AWS will sell Anthropics AI software to cloud customers, end quote. Which, let's do some more on that Microsoft situation. I was fascinated by the this thread on Twitter from Matthew Prince, the co-founder and CEO of Cloudflare. I'm going to quote the entire thing in full, quoting now. I'm told mine is a contrarian view of the events of the last few days, so here goes. Contrary to what at Kevin Rose and others have written, Microsoft was not a winner of the events of the last few days around hashtag open AI. They were in a much better place

on Friday morning last week than they are today. Friday morning they had invested around $11 billion in open AI and captured most of its upside while still having enough insulated distance to allow at Brad SMI to claim things to regulators like, quote, chat GPT is more open than Meta's Lama, and to allow any embarrassing LLM hallucinations or other ugliness to be OpenAI's problem, not Microsoft's. Sunday morning they were at their lowest point. There was real risk. They lose all their $11 billion investment and look like absolute fools for making that size of investment without any real governance controls. Very smart people who have followed the news carefully, including some big fund managers who hold Microsoft, are still pinging me asking, how is that even possible? Today, they are

better off than Sunday morning, but far, far worse off than they were Friday morning. Sure, they will likely hire a bunch of the Open AI team, but that doesn't get them much they didn't have before, and it comes with a ton of new reputational risk. They now own responsibility for any hallucinations or other ugliness and execution risk, see deep mind within Google for how all the smartest people in AI can still get stymied by the bureaucracy of a giant company. I think the chances of the senior OpenAI folks still being at Microsoft in three years is asymptotically approaching zero, where the independence and clear mission of Open AI was exactly what could have kept that group of incredible talent motivated and aligned over the long term,

making Office 365 spreadsheets a bit more clever, isn't something. that rallies a team like theirs. Sure, they'll try and have some level of independence, but the machinery of a trillion-dollar-plus business software behemoth is hard to not get caught up in and ground out by. This was a very bad weekend for Microsoft, and for that matter, OpenAI. I don't see any winners, maybe at Elon Musk or at Beniof indirectly. It could have been worse, but it still has been a disaster for everyone directly involved. We're not at the end of this story, but I don't see a lot of ways in the short term. It gets better for Microsoft. and really hard to see how it could get better even over the long term than it looked for them

and OpenAI Friday morning last week. In other words, sometimes owning a call option on an asset is better for multiple reasons than owning the asset itself. Last week, Microsoft roughly owned a call option on OpenAI. Today, at best, they own some fraction of the asset itself, end quote. Today is a bit of a mirror image of yesterday's episode because now I need to tell you that X has followed through and filed a defamation lawsuit against media matters, claiming the outlet, quote, knowingly and maliciously misrepresented the amount of anti-Semitic content on X, quoting the rap. Elon Musk has followed through on his threat to sue Watchdog Organization Media Matters, albeit later in the day than he threatened over the weekend.

In a suit filed on Monday, Musk claims that the group, quote, knowingly and maliciously misrepresented the amount of anti-Semitic content on the social media platform formerly known as Twitter. Watchdog organization Media Matters released a report on Thursday that accused X of placing ads for brands next to pro-Hitler and white nationalist accounts. Musk announced on Saturday that he would be filing a, quote, thermonuclear lawsuit against Media Matters, quote, the split second the court opens on Monday. Not a single authentic user on X saw IBM's Comcasts or Oracle's ads next to the content in Media Matter's article, Linda Yacorino asserted in a post on X. Only two users saw Apple's ad next to the content, at least one of which was media matters, end quote. While not naming a specific dollar amount, the suit seeks, quote, actual and consequential damages caused by defendant's misconduct, end quote, along with an injunction to take down its article from both its site and social media that alleged X was placing ads for major brands next to anti-Semitic content, end quote. Finally today, YouTube has confirmed that, quote,

users who have ad blockers installed may experience suboptimal viewing, after users reported five-second delays on non-chrome web browsers, quoting Android Authority. YouTube has been on a monetization push recently as it began blocking ad blockers and pushing users to buy YouTube premium. The move makes sense in many ways, as the platform needs to make money to survive and compensate creators who depend on the platform for their living. But some other actions by YouTube make less sense. Users are now reporting that YouTube has begun slowing down its desktop website for some Firefox and Edge users, and we are perplexed. Redditor VK6 underscore has shared a

video showing a five-second delay when loading into a YouTube video on Mozilla Firefox. Upon manually changing the user agent on the browser to Chrome, the five-second delay no longer appears. Redditor vK6 underscore notes that this isn't a bug on Firefox. The JavaScript code for the YouTube client on the desktop reportedly contains code that adds the artificial five-second delay. Others have chimed in pointing out the exact place to find this piece of code. We can confirm that the above-mentioned snippet of code exists. However, we cannot confirm if the code does indeed add a five-second delay after checking for the user's browser of choice. However, multiple users have reported the same across Firefox and Edge. The users claim to have experienced the delay without

any extensions enabled, indicating that the delay could be on a per-account basis. The delay also does not trigger just once. It is reportedly triggered every time YouTube links are opened in a new tab. YouTube has provided a statement on the issue, clarifying that the issue is related to ad blockers and not with browsers. Quote, to support a diverse ecosystem of creators globally and allow billions to access their favorite content on YouTube. We've launched an effort to urge viewers with ad blockers enabled to allow ads on YouTube or try YouTube premium for an ad-free experience. Users who have ad blockers installed may experience suboptimal viewing regardless of the browser they are using, end quote. This does not completely explain how the five-second delay goes away when using Google Chrome,

though, but it gives us good clarity on the behavior. Users who experience the delay are advised to either allow ads for YouTube or subscribe to YouTube premium. end quote. All right, very important housekeeping notes for you. It is Thanksgiving week here in the U.S., so as I do every year, I'm only doing two shows this week. This is the last live show of the week. But since every time I've taken time off this year, we've lost listeners. I've grown paranoid. So I'm going to make sure you all have something every single day that I'm gone. First up, tomorrow at the usual time, a portfolio profile episode. If you're one, working in AI at all, and you need to get your hands on some Nvidia GPUs. You're going to want

to hear about SF Compute, a company in the Ride Home AI Fund. Not only do they have chips for you to use, but also, if you listen to the episode, there's an exclusive email address for our listeners that will help you jump the line. Come for that, but stay to hear a really interesting take on the whole AI ecosystem from folks who are integral to the cerebral valley scene. Then the rest of the week, a bunch of Internet History podcast episodes. Thursday, Thanksgiving Day, my chapter episode on how the dot-com bubble happened. Friday and Saturday, I'm going to replay parts one and two of the Gary Killed-all legend, because it's fascinating, the man who could have been Bill Gates. I've reposted this before, I think four years ago, but I'm doing it again because it's the most produced

podcast I've ever done, one that I'm probably the most proud of. And then on Sunday, the story of the first blogger, in quotes, at first in quotes, I should say, Justin Hall. Because I think his story is one of the most fascinating interviews I've ever done, even from a philosophical level, the arc of Hall's life from being an extremely online person long before that was ever a thing, to rejecting social media and online life completely, to eventually coming back to it, hopefully, in a more mature way. I think it has some profound things to say about how our society in general has evolved with social media and living our lives online generally. Enjoy all that. Enjoy Turkey Day if you observe it and talk to you on Monday the 27th.