Similarly, Peter Thiel once made a case that if Google ever paid a dividend it would be an admission that they are no longer a technology company and are instead a bet again innovation in search. [0]
The alternative is a pure NIH strategy, or build something and hope for partners, both of which are flawed.
And regarding the Thiel snippet, dividends are isomorphic to stock buybacks, which Google has been doing for a while. They seem to still be a tech company, at least as far as my Ex-Googler eyes can judge.
Also, dividends generally can't be stopped. The expectation is that you continue and eventually increase them. Share buy backs aren't.
AGI research is risky from a R&D standpoint (for obvious reasons), and also tricky from a business strategy and product development standpoint. There isn't a mature business playbook of how to monetize this technology, and although they probably have some ideas, their GPT-3 API pilots have suggested that outside entrepreneurs and programmers can come up with a larger search space of potential use cases then OpenAI can come up with themselves (in the same way that AWS users create more diverse products than Amazon can envision).
It's not an admission that they can't deploy capital - it's that they see an untapped resource of creativity that they can cheaply profit from, rather than building things in-house. The would rather grow the whole pie than try to grow their own slice. It's in a similar vein to how Taiwan Semiconductor lets other companies build on top of their platform and foster trust by never competing with them. In turn, they get to partner with more companies.
If they had pivoted entirely to a 100% investment firm, I would agree with you. But it looks to me from this announcement that they have built some fundamental technology and would like others to figure out the best way to monetize it, and they want to focus on new fundamental technology. An investment fund will align incentives with entrepreneurs building on top of GPT-3.
This is fine though if OpenAI actually has an edge. I don't think they have a meaningful tech edge, you can see folks like GPT-Neo fully reimplement the ideas in papers. I also think they see this since they're looking to make a small amount of investments, and the big benefits of things like the GPT-3 API are for low experience/funding projects.
But maybe they have an edge in evaluating AI startups, and an edge in advising them beyond the typical VC. And if they do have a good repeatable edge there, this actually seems like a pretty interesting way to fund a research lab.
It's interesting if you compare it to Bell or Xerox, right? The research lab's hackers helping make funding decisions about startups that use their secret sauce might seem funny historically, though maybe it would have been more effective.
(In practice, though, as HN is well aware, OpenAI isn't just some research lab; serial entrepreneurs who are connected with the most successful incubator ever, etc).
That seems silly to me. Google is not paying dividends right now, but they are doing stock buybacks which is basically the same. However, Google also has 100k+ employees there are only so many people who can work on innovation in search at the same time.
It's a separate fund.
> Peter Thiel once made a case that if Google ever paid a dividend it would be an admission that they are no longer a technology company
Well.. duh? They might be a tech company and pay dividends, but they aren't a growth company when that happens. This is sharemarkets 101.
Does that mean it makes this a bet against innovation in AI?
He is saying that Google not investing their capital reserves in R&D implies that they have run out of good research ideas.
If you haven’t watched the clip I recommend it.