'Squawk on the Street' crew react to the shake-up at OpenAINov 21, 2023
Let's start with the restructuring at Open AI. Open AI co-founders Sam Altman and Greg Brockman have been hired by Microsoft to lead that company's new AI research team, just days after CEO Chad GPT OU adultman failed in his bid to reinstate him. . A post on X Nadela says that Microsoft will act quickly to provide the new team with the resources necessary for its success and adds that the company remains committed to its partnership with open AI by working with interim CEO EMT Shear, who previously led Twitch Jim, the challenge here is to explain to the viewers how much this matters some of these names our viewers may not know well.
I think it was a real company. I mean, it was valued at a price that I thought could be the number one IPO when it came out. It had a lot of firepower, obviously, the AI is what will drive the next level of, say, The Magnificent Seven, and I feel David is the open rebellion and the idea that this company could disintegrate because of the card that I'm seeing of the employees, yes. It basically indicates that the company was dissolved. I mean, this is a shocking and fascinating story in many ways. Obviously, you're talking about potential intellectual property, at some point you have to remember that it was the unique structure of the company in and of itself that allowed this board to take the actions that it did for reasons that have yet to be determined.
Unfortunately, I cannot tell you, based on what I have heard, with confidence, what it is really about that we can refer to. Published reports from many journalists who followed him said that perhaps he was moving too quickly in marketing, that being Mr. Alman and many other concerns perhaps, but the fact is that, to your point, Jim, $86 thousand million was the most recent value of a tender. that they were going to allow employees to potentially sell some shares and now it's unclear how much they might be worth, especially given this letter that you just referenced in which hundreds of company employees basically tell this board that you It's the worst thing that can happen.
You've jeopardized all the work and undermined our mission. Your conduct has made it clear that you do not have the competence to oversee open AI. I find it quite laughable. In fact, this letter is also signed by this guy, Ilia Suts, who seems to be the reason Alman and Brockman left in the first place look, I don't think it's very funny because we're talking about the Argentine elections. I mean, I don't want to draw too many parallels, but I mean, Carl, it sounds like it's anarchy. Anarchy is the word that comes to mind, because I have never seen a major company get rid of the boss who, by the way, is not Adam Newman.
Okay, this is a real company with a guy who is obviously very important. Microsoft drops eight when he leaves, uh, when the company blows up and now it's going back up and it shouldn't be worth that much because suddenly you don't have a stake in a company that's worth a lot, so I mean, I don't think I've ever seen something like this apart from the fact that it just tells you the mess that can happen. Look, Microsoft isn't even around right now. The mess that can happen is extraordinary. AR now that says you have some private investors.
Thrive. capital, for example, and others who invest significant amounts of money, don't forget the 13 billion doll figure we heard with Microsoft, much of which is actually essentially made up of cloud credits in Azure, which means that it takes a huge amount of uh Power computing to run their big language models and so they use Azure, they don't have to pay for it, so they're money credits essentially, so they're included in there, but Jim, on the other hand, Microsoft now gets Alman, they get Brockman, they get. I know how. many employees still own 49% of open AI, they still have the right to use their weights, in other words, the way they train these large language models in perpetuity, potentially, and you can argue that they say they really get out of this thing looking a lot better than it did on Friday, well that's what I felt, besides the fact that maybe people felt like they had a stake that would be worth a lot, but I mean the stock went down eight and then went down again today, they They are the winners.
It is not clear which actions you already know. I've talked to a couple of people who now own Microsoft and they'll tell you that I think they're ultimately the winners here. I think so, because again they control a lot of the intellectual property. It's not clear that you know that Alman himself is now there because of the way he probably had a difficult non-compete that basically meant he could only go to Microsoft, but I don't know, that's a guess because I came and he had no stock, does he? TRUE? it had no stock, but it also had this weird nonprofit aspect to it, remember open AI was a nonprofit, that's why, uh, Elon Musk was so upset with it because he changed it from not being a nonprofit. of profit and then you took this part that became the GPT chat and turned it into the profitable part, but ultimately even as an investor, you had a limit of what was originally 100 times your investment, but there is a waterfall that in actually reduced that multiple over time.
Have you ever seen a company go over 80 billion? No, I mean, what? was what it was 40 for I don't know what it's worth we don't know Carl but the fact is this is fascinating and especially this last letter which basically seems to indicate to your point either the company implodes or they reverse everything correctly or somehow Microsoft will take the full control, but I don't think they can do it because of the regulatory concerns there and that may be one of the reasons why Microsoft didn't even have a board seat, and you can still ask why despite all that. money, they didn't have at least a seat on the board to prevent this from happening and who is issued here.
Don't tell me, oh I know, but that's what K vote did and K vote is out GM, this is some of this is what you win a twitch and lose a twitch you've been on the whole cruise thing, which we'll get to real quick I just want to say it's funny that the cide notes are already out of date because a lot of them were written over the weekend, but Steel says that for the first time in two decades this is a case where Microsoft doesn't is playing from behind in an emerging technology uh and they reiterate in 390 you've seen a lot of that, right?
I think I think I think Microsoft is doing incredibly well without this, so I don't know why you already know that since Nadell came in. I think it's been Total Home Run and I think this is going to be it, but I've got the one. What I think people are judging right now at home is that AI is a joke, no, I know, I mean me, I mean, but people are saying, listen, this company was cheap, now it's worth zero, No, we can all speculate, in fact, over and over again. This is pure speculation on the part of people trying to understand what really separated Alman from his board, but perhaps the next version of the GPT chat is so powerful that they are afraid to allow it to reach their site. period, this is far from correct, nothing, this is, in fact, I mean, I don't know, we've had someone we've talked to about their opinion, we'd like to hear you say more than this, it's the most important emerging technology that we've seen in the last 30 years, it's funny, I want to combine this with Mike Wilson, now he had a note that came out last Thursday, but he's talking about whether the Magnificent Seven can basically follow the Magnificent Seven if they don't have artificial intelligence if Amazon doesn't produce if uh if Nvidia obviously doesn't produce, which I think they will tomorrow night.
I come back and say you know AI is the way you're going to take these companies to the next level and if whoever doesn't have AI or uses AI isn't going to go higher, the only one I would exempt is Apple, uh, because they don't have it, they have a new cycle, maybe they can transcend it, but the AI is ruined for next year, but if they produce AI, you have another one. year for the M 7
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