{"id":86781,"date":"2023-11-20T18:57:03","date_gmt":"2023-11-20T23:57:03","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/openais-future-is-in-question-what-it-means-for-google-amazon-and-nvidia\/"},"modified":"2023-11-20T18:57:04","modified_gmt":"2023-11-20T23:57:04","slug":"openais-future-is-in-question-what-it-means-for-google-amazon-and-nvidia","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=86781","title":{"rendered":"OpenAI’s Future Is in Question. What It Means for Google, Amazon, and Nvidia."},"content":{"rendered":"
\n
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<\/p>\n<\/figure><\/div>\n

\n Microsoft
\n has moved fast to salvage its investment in OpenAI by hiring its former CEO Sam Altman. However, the\u00a0fallout from his firing could still reshape the artificial-intelligence race between the tech company and its peers. <\/p>\n

Arguably by hiring Altman directly, Microsoft (ticker: MSFT) has strengthened its position in the AI competition against Google\u2019s parent,
\n Alphabet
\n (GOOGL), and
\n Amazon.com
\n (AMZN).\u00a0It now has a stronger in-house AI team in addition to its 49% stake in OpenAI. However, the future of OpenAI looks to be up in the air. <\/p>\n

\n

More than 500 OpenAI employees have threatened to resign from the company if the current board doesn\u2019t resign and reinstate Altman, The Wall Street Journal reported, citing a letter to the board. <\/p>\n

OpenAI chief scientist Ilya Sutskever, who was one of the board members who voted against Altman, tweeted his regret saying: \u201cI deeply regret my participation in the board\u2019s actions. I never intended to harm OpenAI. I love everything we\u2019ve built together and I will do everything I can to reunite the company.\u201d<\/p>\n

While many OpenAI employees might choose to follow Altman, they could also be tempted away to other rivals. <\/p>\n

\u201cYour actions have made it obvious that you are incapable of overseeing OpenAI,\u201d the employees wrote. \u201cWe are unable to work for or with people that lack competence, judgment and care for our mission and employees.\u201d<\/p>\n

Interim OpenAI CEO Emmett Shear, formerly the head of Twitch, said in a social media post that he would hire an independent investigator to dig into the entire process leading up to the firing of Altman and its aftermath, and generate a full report in the next 30 days. <\/p>\n

The post also said he would reform management and leadership at the company. \u201cIt\u2019s clear that the process and communications around Sam\u2019s removal has been handled very badly, which has seriously damaged our trust,\u201d Shear said.<\/p>\n

He added that depending on what they find, \u201cI will drive changes in the organization \u2014 up to and including pushing strongly for significant governance changes if necessary.\u201d<\/p>\n

Shear said it may take longer than 30 days to address the turmoil that has gripped the company in the past few days.<\/p>\n

Altman said in a tweet: \u201cwe have more unity and commitment and focus than ever before. we are all going to work together some way or other, and i\u2019m so excited.\u201d<\/p>\n

Evercore analyst Kirk Materne said in a research note: \u201cWhile it remains to be seen how much \u2018brain drain\u2019 there will be at OpenAI, we think the fundamental risk to Microsoft is largely contained with Altman and team on board.\u201d<\/p>\n

Microsoft stock was up 2.1% on Monday.
\n Alphabet
\n was up 0.6% and
\n Amazon
\n was up 0.7%. <\/p>\n

There might be an opportunity for Google and Amazon to take advantage of the upheaval. Altman recently said OpenAI was in the early stages of developing GPT-5, its latest AI model. That progress is likely to be disrupted by the organizational changes. Even if Altman\u2019s new team takes the lead on the next generation of AI models, Microsoft will have to put in place the personnel and resources for it to do so and that will take time.\u00a0<\/p>\n

That could allow Google and Amazon to displace OpenAI\u2019s technology as the perceived industry benchmark.\u00a0<\/p>\n

Google was reported by The Wall Street Journal in July to be working on an AI model called Gemini that can rival GPT-4 and which is expected to be ready for release in the coming months. Amazon is investing in its own AI model, code-named
\n Olympus,<\/span>
\n which could top both OpenAI and Alphabet\u2019s technology, according to Reuters.\u00a0<\/p>\n

Google and Amazon\u2019s development of AI models could benefit from being able to hire from a new pool of talent. OpenAI had been talking to investors about a share sale that would value it as between $80 billion to $90 billion, according to The Wall Street Journal. That seems likely to be threatened by the upheaval at the company and could incentivize employees to move on.<\/p>\n

One company already hoping to benefit is
\n Nvidia
\n (NVDA).
\n Nvidia
\n AI research scientist Jim Fan said his team was looking to hire engineers and researchers and made specific reference to employees at OpenAI in a post on social-media platform X, formerly Twitter.<\/p>\n

More broadly for Nvidia the picture is mixed. If Microsoft is to supply both OpenAI and its Altman-led in-house team with sufficient computing capacity to train AI models then it might need to raise its planned purchases of chips, including from Nvidia. <\/p>\n

However, Altman has also spent time in the Middle East gauging investor interest for a new start-up aiming to create low-cost chips needed to train AI models, according to The Wall Street Journal. If his interest in in-house hardware persists it could accelerate existing moves by Microsoft to lessen its dependence on chip suppliers such as Nvidia.<\/p>\n

Nvidia shares were up 2.4%. It is set to report earnings on Tuesday. <\/p>\n

Other companies are hoping to recruit, too. Salesforce CEO Marc Benioff posted on social media that his company would match compensation for any OpenAI researcher who has left and wants to join the company, working with the Salesforce Einstein Trusted AI\u2019s research team.<\/p>\n

One other ramification of the upset at OpenAI could be a sharper focus on how AI start-ups are structured. Microsoft didn\u2019t have a seat on OpenAI\u2019s board, which was structured as a nonprofit with the task of prioritizing social good. <\/p>\n

Fellow AI start-up Anthropic, which has received billions in investment from Amazon and Google, is set up as a public-benefit corporation, which means its board balances financial interests and responsible development of AI. However, it also has a trust structure which means an independent body of trustees will eventually elect the majority of its board, over a phased in period of time. <\/p>\n

Such structures are meant to reduce the risks of AI development but the events at OpenAI could leave corporate backers more wary about how they work in practice. <\/p>\n

Write to Adam Clark at adam.clark@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Microsoft has moved fast to salvage its investment in OpenAI by hiring its former CEO Sam Altman. However, the\u00a0fallout from his firing could still reshape the artificial-intelligence race between the tech company and its peers. Arguably by hiring Altman directly, Microsoft (ticker: MSFT) has strengthened its position in the AI competition against Google\u2019s parent, Alphabet […]<\/p>\n","protected":false},"author":1,"featured_media":86782,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-86781","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nOpenAI's Future Is in Question. 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