Behind the OpenAI’s Ouster, the Real Story is Always Money

Non-Profit Tech Technology

            Marble Falls      One big difference between artificial intelligence, dominated by computers, and human intelligence, just barely handled by people, that might give AI the edge in the future would have to do with money and how much its pursuit might mitigate rational calculations.  All the headlines indicate that Silicon Valley in obsessed this minute in the usual short range of its attention span with the sudden and precipitous ouster of Sam Altman as the CEO of OpenAI, the first mover over the last year of volcanic arrival of ChatGPT and its artificial intelligence competitors as the next big thing.

No one is really talking, so speculation is rife.  The public line put out by the board only cited a lack of communication, which should read as a lack of transparency and perhaps withheld or mangled truths, from Altman.  The cover story is that some may have been worried that Altman was leaning too far forward in promotion, marketing, and wheeling and dealing, and showing too little caution in protecting all of us against the possible dangers of AI unbound.  That’s interesting and might even be true, but I don’t believe a word of it.  I know I’m way out of my lane here, but my bet is that it’s really all about the money.

I’ve raised these issues before in looking at the complex structure of OpenAI as a nonprofit with a for profit subsidiary of sorts.  Altman’s interview in Wired just didn’t add up to me and spelled trouble.  He was coy about the point at which the profits from the for-profit would inure to the nonprofit which controls the whole shebang.  Wired speculated that the number might be in the trillions.  There are only five companies in the world with that high an evaluation now and all are in the tech sphere:  Apple, Microsoft, Alphabet (meaning Google), Amazon (meaning everything), and Nvidia, the chipmaker.  The controlling board of nonprofit OpenAI had to read that with arched eyebrows, because it was birds eye view of neverland.

Add to that the reports that Altman was around the world talking to deep pocketed sovereignty funds, Softbank, and Middle Eastern sources about new investments in the for-profit side that would raise the evaluation of OpenAI over $80 billion.  Well and good, the board might have thought, but as part of that valuation, investors were also looking to get some cash back by all reports.  Meanwhile, the very small, self-perpetuating nonprofit board of six people, four other than Altman and its company employee chairman, must have wondered where that left them. If investors could collect, what was their share, Sam?

The role of the investors whispering to Altman is likely where the rubber hits the road.  Microsoft was in for $13 billion and the Times says it was getting some “capped” share of profits.  I’m not really sure how this nonprofit/for-profit hybrid was even making profits, since I’m not sure what it was selling since access to ChatGPT is still free?  Now the investors are reportedly macking on the nonprofit board members to reinstate Altman and their former chair, while he and his buddies are threatening to create a new company as a competitor.  The investors have the money, but they don’t have any power.  I would bet they are saying to the nonprofit, “you want to run this sandbox in this weird way with us on the outside pouring in cash, you better take our boy back and let us have more scratch or we’ll leave you and your worry beads high and dry.”  I’ll bet they fold like a cheap suit, because that’s usually the case with nonprofits when money collides with principals.

Am I right?  I think so, but who knows.  There’s one thing I’m certain that’s driving this mess:  it’s always about the money.