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Elon Musk reneging on promised funding for OpenAI might've pushed them to Microsoft
First I've heard of this.
From the Verge:
https://www.theverge.com/2023/3/24/23654701/openai-elon-musk-failed-takeover-report-closed-open-source
-snip-
Musk was part of a small group that founded the AI lab in 2015 as a nonprofit, intending the firm to share research for the wider benefit of society. But by early 2018, says Semafor, Musk was worried the company was falling behind Google. He reportedly offered to take direct control of OpenAI and run it himself but was rejected by other OpenAI founders including Sam Altman, now the firm’s CEO, and Greg Brockman, now its president.
Crucially, when Musk walked away from the company — he resigned from its board in 2018 citing a conflict of interest with his work at Tesla — Semafor says he also reneged on a promise to supply $1 billion in funding, contributing only $100 million before he walked. This left OpenAI with a problem, as its work developing large-scale AI models like image generator DALL-E and the text-generating GPT series was racking up huge bills. So by 2019, OpenAI announced it was creating a new for-profit entity to fund its research and quickly became closely entangled with Microsoft, which supplied billions in funding and resources while securing exclusive licenses to use OpenAI’s tech in its products.
Semafor does not state outright that Musk’s lost funding was what pushed OpenAI into bed with Microsoft, but it’s a plausible interpretation. (We’ve reached out to OpenAI for comment on the story and will update if we hear back.) This is what makes the report so significant, as many in the AI community see OpenAI’s turn toward corporate interests as a huge moment for AI and the world — not just as a betrayal of OpenAI’s founding principles but as a spur for the company to launch new AI products as quickly as possible, an attitude many think could have dangerous consequences.
OpenAI’s turn toward Microsoft has certainly changed how the company shares its research. When OpenAI announced its latest AI language model, GPT-4, earlier this month, many experts were dismayed that it did not share details about how it was created or its training data. In an interview with The Verge, Ilya Sutskever, OpenAI’s chief scientist, explained that this was to keep the company’s competitive advantage over rivals (and, as a future consideration, to stop misuse of its technology). But many AI experts say shutting down access to OpenAI’s models makes it harder for the community to understand potential threats posed by these systems and concentrates power in corporate hands.
-snip-
Musk was part of a small group that founded the AI lab in 2015 as a nonprofit, intending the firm to share research for the wider benefit of society. But by early 2018, says Semafor, Musk was worried the company was falling behind Google. He reportedly offered to take direct control of OpenAI and run it himself but was rejected by other OpenAI founders including Sam Altman, now the firm’s CEO, and Greg Brockman, now its president.
Crucially, when Musk walked away from the company — he resigned from its board in 2018 citing a conflict of interest with his work at Tesla — Semafor says he also reneged on a promise to supply $1 billion in funding, contributing only $100 million before he walked. This left OpenAI with a problem, as its work developing large-scale AI models like image generator DALL-E and the text-generating GPT series was racking up huge bills. So by 2019, OpenAI announced it was creating a new for-profit entity to fund its research and quickly became closely entangled with Microsoft, which supplied billions in funding and resources while securing exclusive licenses to use OpenAI’s tech in its products.
Semafor does not state outright that Musk’s lost funding was what pushed OpenAI into bed with Microsoft, but it’s a plausible interpretation. (We’ve reached out to OpenAI for comment on the story and will update if we hear back.) This is what makes the report so significant, as many in the AI community see OpenAI’s turn toward corporate interests as a huge moment for AI and the world — not just as a betrayal of OpenAI’s founding principles but as a spur for the company to launch new AI products as quickly as possible, an attitude many think could have dangerous consequences.
OpenAI’s turn toward Microsoft has certainly changed how the company shares its research. When OpenAI announced its latest AI language model, GPT-4, earlier this month, many experts were dismayed that it did not share details about how it was created or its training data. In an interview with The Verge, Ilya Sutskever, OpenAI’s chief scientist, explained that this was to keep the company’s competitive advantage over rivals (and, as a future consideration, to stop misuse of its technology). But many AI experts say shutting down access to OpenAI’s models makes it harder for the community to understand potential threats posed by these systems and concentrates power in corporate hands.
-snip-
Semafor article - "The secret history of Elon Musk, Sam Altman, and OpenAI" - here:
https://www.semafor.com/article/03/24/2023/the-secret-history-of-elon-musk-sam-altman-and-openai
Archive page at https://archive.ph/WyJAL
-snip-
An OpenAI announcement said Musk would continue to fund the organization, but Musk did not, according to people familiar with the matter. He had promised to donate roughly $1 billion over a period of years (he had already contributed $100 million), but his payments stopped after his departure, people familiar with the matter said. That left the nonprofit with no ability to pay the astronomical fees associated with training AI models on supercomputers.
That fall, it became even more apparent to some people at OpenAI that the costs of becoming a cutting edge AI company were going to go up. Google Brain’s “transformer” had blown open a new frontier, where AI could improve endlessly. But that meant feeding it endless data to train it — a costly endeavor.
-snip-
On March 11, 2019, OpenAI announced it was creating a for profit entity so that it could raise enough money to pay for the compute power necessary to pursue the most ambitious AI models. “We want to increase our ability to raise capital while still serving our mission, and no pre-existing legal structure we know of strikes the right balance,” the company wrote at the time. OpenAI said it was capping profits for investors, with any excess going to the original nonprofit.
-snip-
Less than six months later, OpenAI took $1 billion from Microsoft, which could provide not just funding but infrastructure know-how. Together they built a supercomputer to train massive models that eventually created ChatGPT and the image generator DALL-E. The latest language model, GPT-4, has 1 trillion parameters.
-snip-
An OpenAI announcement said Musk would continue to fund the organization, but Musk did not, according to people familiar with the matter. He had promised to donate roughly $1 billion over a period of years (he had already contributed $100 million), but his payments stopped after his departure, people familiar with the matter said. That left the nonprofit with no ability to pay the astronomical fees associated with training AI models on supercomputers.
That fall, it became even more apparent to some people at OpenAI that the costs of becoming a cutting edge AI company were going to go up. Google Brain’s “transformer” had blown open a new frontier, where AI could improve endlessly. But that meant feeding it endless data to train it — a costly endeavor.
-snip-
On March 11, 2019, OpenAI announced it was creating a for profit entity so that it could raise enough money to pay for the compute power necessary to pursue the most ambitious AI models. “We want to increase our ability to raise capital while still serving our mission, and no pre-existing legal structure we know of strikes the right balance,” the company wrote at the time. OpenAI said it was capping profits for investors, with any excess going to the original nonprofit.
-snip-
Less than six months later, OpenAI took $1 billion from Microsoft, which could provide not just funding but infrastructure know-how. Together they built a supercomputer to train massive models that eventually created ChatGPT and the image generator DALL-E. The latest language model, GPT-4, has 1 trillion parameters.
-snip-
According to Semafor, Musk was furious when the launch of ChatGPT last November made OpenAI the hottest tech startup. He ended Twitter's previous deal with OpenAI giving them Twitter data.
Semafor says the dispute between Musk and Altman doesn't seem to be about money. With Musk it seems to be about ego, power, and possibly believing he's the only person who can safely develop AI.
And Altman did not take any equity when OpenAI became partially a for-profit company, which was very unusual (and something I hadn't known). He was very wealthy anyway. But OpenAI's success is not about gaining more personal wealth for him.
3 replies
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How effing typical is that?
