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Comment by bartwr | Hacker News Reader

This sounds like an insane conflict of interest.

CEO of a company (or worse, non-profit!) and a member of its board creates another, for-profit company (in partial secrecy/lack of transparency) that the non-profit would eventually pay a lot of money. This is almost a fraudulent level of siphoning non-profit money.

Btw, this is hilarious - regular employees have non-competes in their contracts (sometimes void/illegal, depending on the local jurisdiction) and breaching them is an immediately fireable offense (sometimes leading to more severe consequences). You work on a small thing on the side? Better be careful, ask your manager/HR, risk it getting taken over by the company (luckily, IIUC this part is mostly illegal now in all jurisdictions that "matter" for tech).

But sitting on multiple boards where you have much more room and possibilites for creating conflicts of interest and damaging the company? All fine and common!

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There's an even bigger problem here: if he were just making money, that would be a normal-sized problem. If he were just making a supplier for OA, heck, that might be a good thing on net for OA; a subsidiary doing hardware might be justifiable given the importance of securing hardware.

But that's not what he's doing.

Creating such an independent hardware startup comes off as basically directly opposed to OA's safety mission - GPUs are one of the biggest limitations to creating better-than-OA models! The best customers would be the ones who are most sabotaging the OA mission. (You can't run the UN and also head an arms manufacturer dreaming of democratizing access to munitions.)

How is it opposed to OpenAI's goals to have a friendly company selling them chips instead of NVIDIA, which is, at-best, a neutral company?

Software is always more important than hardware. All the big players have access to NVIDIA chips today and yet only OpenAI has ChatGPT, proving the point.

OpenAI probably wishes someone would create competition to NVIDIA and this is Sam Altman trying to make that happen himself, since no one else seems to have been able to pull it off so far.

A conflict of interest would be OpenAI buying Altman's chips at inflated prices or something like that.

But if he makes a bunch of money selling OpenAI chips and OpenAI gets better/cheaper chips, that seems like pure win-win and totally free of ethical conflict.

"Conflict of interest" is not defined by a bad outcome or malice. It is defined as the potential of those, human nature, and various cognitive biases. "Conflict of interest" is disclosing anything that could lead to a biased decision or lack of transparency. Can a CEO of 2 companies be objective about a contract between the two and when claiming that his company no2 is better than the competition?

And in the tech-specific case: As much as junior engineers would love to believe in "superior" solutions, tech decisions are seldom clear-cut. There are many trade-offs: cost, efficiency, memory use, throughput, latency, ease of use, cost of switching, and many more. You always have a pile of pros and cons. Sometimes, one is strong enough, but most of the time, it feels almost like guessing/intuition. And then the conflict of interest becomes especially concerning.

I thought “potential conflict of interest” was the term used to refer to the potential conflict.

yes, and "disclosure of" is the term used when you properly disclose conflicts.

“Disclosure of potential conflicts of interest” — if I understand?

Asking people to disclose potential conflicts of interest casts a wider net — so they aren’t led to think “nah, that’s not a conflict, it’s a win win!”

It may be a conflict of interest but it will be hidden by layers. OAI has deal with gpu producer and there is little conflict as they don't interact, but MS that owns Azure and resell of hardware creates that conflict. Maybe I have bad view, but I think many such conflicts that come from interdependent parties exist and especially in datacenter/cloud world.

This is patently wrong. All of it. You made up a concept and then ran with it like it’s reality. “Potential” is not an issue. “Actual” is. This isn’t a judge. This is a CEO and they can self deal as long as it stays as a value to the core company. It’s up to the board to decide that when it’s proven.

A bunch of nerds just thought they could jump the gun here because they are inexperienced doofus’s when it comes to corp.

A CEO self-dealing can be civilly (and in gross cases, criminally) convicted of violating their fiduciary duty to act in the company's interest, over their own, and violating company trade secrets.

(If Altman doesn't want to be restricted by fiduciary duties then he shouldn't be on a board or be an executive.)

How could Altman possibly not use private OpenAI information regarding its hardware needs, when creating an AI hardware company he wants to serve OpenAI? And its competitors?

He could invest in a new AI hardware company created and run by other people (without his specific input) without a conflict. That does not appear to be the case here. He could create an OpenAI hardware subsidiary. Again not what he was doing.

“Can”. Everyone here is talking in absolutes. There is a shit ton of room in “can”.

I am not sure what you are saying. Agreeing with me or not? "Can" as "a shit ton of room" vs. some undescribed "absolutes"?

Self-dealing CEO's and board members can, and are, convicted criminally and civilly of violating their fiduciary duties. And "can" and are fired with cause.

Lots of e.g. news organizations absolutely have tons of guardrails in place around conflicts of interest that may or may not really influence behavior but may even have the appearance of potentially doing so.

No, conflict of interest is entirely about potential.

> totally free of ethical conflict.

Unfortunately, far from that case.

Altman's hardware startup would only be free of ethical conflict if Altman was open about it, and the board approved at least two things (and probably more):

1. A formal plan to separate OpenAI CEO Altman from OpenAI hardware acquisition decisions.

2. A formal agreement with Altman and his new company, on how OpenAI's private information with hardware implications is firewalled and/or shared with Altman's new hardware concern.

Otherwise, Altman is going rogue, acting on private OpenAI information useful to a new hardware company looking for future business with OpenAI and OpenAI competitors.

CEO Altman has a fiduciary duty to act directly in OpenAI's interest, and not in some "hey this could be great for everyone" version.

Litmus test: If your legal partner/executive is doing things behind your back with large implications for you, they are almost certainly violating ethics in some way.

Actually I don’t think he does have a fiduciary duty to OpenAI, and neither does the board. It’s a non-profit.

Non-profits totally have boards with fiduciary duties. Just because it’s a non profit doesn’t mean it isn’t being juiced for money by others. It just means that the org can’t make a profit, but it can totally spend its money unwisely so that it winds up in someone’s pockets. Heck, most of America’s hospital systems are like that.

The “fiduciary duty“ of a nonprofit, such as it is, is just securing operating funds so that it can Fulfil its mission. Altman has been spectacularly successful at achieving that goal by obtaining $10 billion in funding. Better, cheaper, or more power efficient chips, whatever the source, would absolutely help through the mission too. and that of course is assuming they actually buy or use them at all in the first place. Firing him on the grounds that it could potentially be a bad deal that “lines his pockets“ sometime in the future seems premature.

I think it’s a real stretch to say this chip company would be a violation of his “fiduciary duty“ to open AI. The best argument you could make is that he has a conflict of interest with a competitor. But again, open AI is a nonprofit. It doesn’t have “competitors“. Either it has the funding it needs and is fulfilling its mission or it isn’t.

Fiduciary =/= monetary profits. The board (including Altman) has to put OpenAI's interest first, that is their fiduciary duty.

It's still not clear to me how a board member prospectively running a chip company (a related but different business) works against OpenAI's interests. And people here seem to be making an awful lot of assumptions in order to somehow connect those dots.

Sam Altman has inside information on OpenAI's current and future hardware needs. Sam Altman as CEO, was in a position to direct OpenAI's current and future hardware purchases.

How can he separate those concerns from having his own hardware initiative put together precisely to serve OpenAI and its competitors hardware needs?

Without an agreement with the OpenAI board on how these conflicts of trade secret information and executive power can be settled (Significant shares in the new company for OpenAI?) no competent board would put up with this.

This situation smacks of the ethically questionable transition to a closed/profit organization, after receiving initial funding based on their being an open/non-profit organization. (Apparently the original funders didn't retain any veto power over such a transition, to the regret of at least one significant donor.)

>Without an agreement with the OpenAI board on how these conflicts of trade secret information and executive power can be settled (Significant shares in the new company for OpenAI?) no competent board would put up with this.

I would say if they really did anticipate and worry about such an issue, a competent board would work toward forging such an agreement, rather than firing the CEO years before the aforementioned chip company even existed and before telling any of their other stakeholders.

Well when you put it that way ... yeah. That would have been great.

I’m not taking a side here because I don’t know the facts of the case. But a conflict of interest is a huge deal because it could lead to spending more money than necessary, and is also the main way people juice non profits for profits somewhere else. Of course, if they start a chip company out in the open and not granting it money or guaranteed business from the non profit, things might be up to standard.

The issue is not the OpenAI/SamaChip relationship, which is probably beneficial for OpenAI.

The issue is what happens when SamaChip's profit imperative forces them to maximize revenue. Because the best way to maximize revenue, when you're an independent chipmaker with a large R&D investment, is to sell to more companies. Which by definition are going to be OpenAI's competitors, and whose interests may not be aligned with OpenAI, but will have a financial line to SamaChip.

Gwern's highlighting an interesting contradiction in OpenAI's core charter. In order to ensure responsible, safe, humanity-benefiting AGI, OpenAI needs to have control over AGI's development; any for-profit entity that gets ahead of them probably will not have the same humanity-benefitting mission (actually, we know they won't, they will have a shareholder-benefitting mission by definition). But that means that by their charter, they can't be "Open". Anything like the Developer Day or API or a SamaChip that can sell to other startups means that other parties will have the freedom to use it for their own interests.

Not saying whether this is good or bad - the tension between openness and vulnerability always exists, and personally I tend to come down on the side of openness. But IMHO OpenAI's mission was contradictory from the very beginning, and was more a recruiting tool to get bright idealistic AI researchers to work for them.

Hahaha if you played at any high level in the FAANG you’d know that this is a desirable outcome compared to the alternative.

Where does Ilya stand on transparency in relation to OpenAI's mission of developing API?

> How is it opposed to OpenAI's goals to have a friendly company selling them chips instead of NVIDIA, which is, at-best, a neutral company?

Because OpenAI's mission statement is along the lines of providing AI to all. "All" is more than data centers and billion dollar valuation companies.

I strongly doubt I would be able to purchase one of said chips and have it in my house.

This GPU fiasco is all thanks to LLMs - especially transformers, which was OpenAIs trajectory under Altman. I wouldn't be surprised if the breakdown in communication was over OpenAI becoming a LLM printer. Transformers are a solved problem, making a bigger one is hardly research and definitely not a step towards OpenAIs mission statement.

Yes but creating the processing power with which they can realize their vision is. In interviews Sam’s opponent at Open AI Ilya Sutskever has said lack of hardware and energy for them could become major factors impeding progress in AI. It’s obvious how more players in the chip field help them, especially if the manufacturer has intimate knowledge of what they need or would like to see made. Even if Sam is gone for good they should work toward doing this anyway.

I don’t know if “strongly doubting“ you could buy one of these chips and have it in your house is a strong enough basis for arguing a conflict of interest between open AI and this chip company. People seem to be making an awful lot of assumptions about the specifics of a company that doesn’t even exist yet.

These are strange times, very strange ones, and you are grossly underestimating how much hardware constraints are impacting people. What I know is under NDA, but trust me, even the biggest names you know and would never guess are short tens of thousands of GPUs

Agree with this take. Sam previously stated (eg on Lex’s podcast) that a slow takeoff soon was his goal, to give society maximum time to adjust and to prevent an unexpected fast takeoff from capability overhang. I bought his take when he said it.

Going off and trying to accelerate hardware capabilities (especially with an outside company that presumably sells these processors on the open market) seems indefensible in this framework unless you have already solved alignment, which they clearly have not.

> basically directly opposed to OA's safety mission

OpenAI does not have a mission to ensure that the entire industry is safe.

And if anyone actually believes that then they are frankly delusional because right now AI is a geo-political fight between nation states. Is OpenAI really going to have any ability to control what China or UAE do with their LLMs. No.

China is the only other state that has anywhere close to the capacity to attempt to go for AGI. They also have an existential interest in creating safe ASI. The problem is that in geopolitical struggles, safety usually goes a bit out the window, and we've so far been fairly lucky (and surprisingly competent) with not destroying large parts of human civilisation. There are a lot of unknowns around the topic. If ASI is possible and reachable, the first to get there would end the race.

AGI could mean we are not alone as a sentient species we can directly communicate with on this planet anymore, and hopefully we wouldn't try to enslave it like we did to the "others" we encountered before.

> They also have an existential interest in creating safe ASI.

An oppressive state with AGI is no better than an oppressive AGI.

> China is the only other state that has anywhere close to the capacity to attempt to go for AGI.

Any state can easily recreate/adopt the AGI invented by others. The costs and challenges for any given level of AI tech have dropped precipitously after each advance, and state level actors have far more than enough resources.

Why can't, I don't know, the Canadian government hire some ex OpenAI employees and attempt to make an AGI? What is the constraint here that makes it only possible for the U.S. and China?

One of them is money. Canada was lucky enough to get in on AI early, when the whole thing was pie in the sky and most people didn’t care. But today it’s turning into big business, and Canada just can’t compete with Silicon Valley salary levels. And that’s a problem on top of trying to convince people to move from California to Toronto.

Europe and elsewhere have similar problems. To have an advantage, you need the very best people. But the very best people all want jobs at major US companies, and major US companies want them, too.

AI in China must adhere to strict socialist values. I wish that was a joke, but it’s actually a rule the government is trying to implement. I doubt it isn’t so much safety for the people as it is for the CPC.

Reframing

If this was simply reframed as, by creating your own GPUs - it would radically lower OpenAI costs in a material way, it’d be more understandable.

Google already does this. There is a material difference between doing it in house and starting a for profit company to do the thing

Kinda depends on your perspective on safety. In your view, should GPUs be regulated or not exist?

reposting this since it's getting more and more relevant

>> Common sense AI control NOW. Ban assault style GPUs

> That is beautiful, I made you a shirt. https://sprd.co/ZZufv7j

/context https://news.ycombinator.com/context?id=38119845

> This sounds like an insane conflict of interest.

It would be, but: this company hasn't been formed yet and this sketch does not justify the haste with which they kicked him out, there were all kinds of boxes that needed to be checked before they could do that without risking damage to OpenAI, this is a founder and the CEO we're speaking of.

Besides that: stupidly enough the contract that Sam has with OpenAI does not have a non-compete in it (this has been confirmed by multiple sources now I take that as true) and I don't see how it directly would harm OpenAI other than that his attention might be diluted and that it should be clear which cap he is wearing. But until that company formed and Sam named himself CEO of it (or took up some other high profile role) it leaves him so many outs that it only makes the board look like bumbling idiots. Because now he can simply say: "I would only be an investor" and that would be that, just like the rest of the investors in OpenAI (and, notably some members of the board) have conflicts of interest at least as large.

So if this was it they're in even more trouble than they were before because now it is the boards' conflicts of interest that will be held up to the light and those are not necessarily smaller.

What a complete circus.

stupidly enough the contract that Sam has with OpenAI does not have a non-compete

Does it really matter? If the behavior appears to be in conflict with OpenAI, and the board doesn’t like it, then that’s enough to let him go. It doesn’t need to be a contract violation, he just wasn’t doing the job they wanted him to do.

Yes, details like that really matter, and if the party you let go can pull half the company out from under you then you may have won the battle but you've just lost the war. On top of that you'll be in lawsuits until the third generation or so given who else sits at that table (Sequoia, YC and Microsoft to name a few).

Do you think there's a problem with him pitching his hardware side-gig to investors who approached him with an interest in OpenAI's tender offer? That gives the appearance of quid pro quo; with the hope that the investors get to skip the next line at the next OpenAI investment opportunity. Imagine someone high up on the Nvidia sales org telling a customer they are all out of H200 graphics cards for the half, but they have a fantastic timeshare investment opportunity they are selling on the side while the customer waits for the next batch.

Not necessarily, unless he proposed to run it himself. I don't see any evidence of that. Just tons of speculation.

I thought non-competes are not legally enforceable in the state of California anyway.

Why do you keep calling him a founder? Is my history wrong or did he jump from leading THIS very website to OpenAI when they came through for a round of sweet hn bucks.

From the caption right underneath his picture on this page:

https://en.wikipedia.org/wiki/OpenAI

"Co-founder and former CEO of OpenAI, Sam Altman" as well as countless news articles repeating this as if it is a well known fact, for which to date I haven't seen any contradicting information.

Looks like he was originally "co-chair" which sounds pretty foundery. https://web.archive.org/web/20170729172845/https://blog.open...

He also committed a chunk of the initial funding. And it's not rare for capital providers who are there on day #1 to call themselves and be referred to as co-founders.

Essentially it is a short-hand for 'those that were present on the founding day of the company and whose names appear on the founding documents besides the lawyers'.

If you get added later on then you are technically not a co-founder, though even there sometimes (and sometimes rightly) exceptions are made.

> And it's not rare for capital providers who are there on day #1 to call themselves and be referred to as co-founders.

I believe the opposite, never heard of any hands-off investors calling themselves co-founders.

So there's different scenarios.

The classic is that a person has an idea, starts working Hands-On, and then goes out and finds capital investment.

In this case, a number of capital holders got together with an idea for a company and then went out and hired several employees to from all over the world to work for them

They may not be hands off but they may be there from day #1. It's usually a matter of how much time they can commit. If it is only a little bit then it is usually in an oversight role, but it is also possible that they are instrumental in raising the first round of funding. Or in the case of a medical start-up the person who allows their name to be used by the venture because they believe in the concept or maybe even because they contributed the idea. Essentially: co-founders are those that were there on day #1 or that the rest of the founders allowed to call themselves co-founder even though they joined later (but they have made an outside contributions).

So it's a term with a strict definition but also one with plenty of exceptions.

Sounds like a funder rather than a founder. "chairman" is a hands-off role usually.

He was one of the founders and initial financers in 2015 along with Greg, Musk, Theil, and Bezos.

Your history is wrong. He is the original co-founder of openai as you can review from the publicly available legal data.

In a way it is interesting that people would wade into this discussion without even the most basic facts.

yeah, I wonder where this type of miss-information comes from. Do people simply make things up out of thin air to suit their biases and then proclaim them to be true?

You are totally right. Why would anyone be trying to claim Sam is a founder when he’s clearly not.

The organization was founded in December 2015 by Ilya Sutskever, Greg Brockman, Trevor Blackwell, Vicki Cheung, Andrej Karpathy, Durk Kingma, Jessica Livingston, John Schulman, Pamela Vagata, and Wojciech Zaremba, with Sam Altman and Elon Musk serving as the initial board members.

Im not sure what the distinction you are drawing is.

Greg, Sam and Elon made a company and literally went out and hired researchers like Ilya.

They pulled together funding, created a company, and hired a team of researchers to operate it. If that isnt founding a company, I dont know what is. Sam was there before all of them

It is not like a scrappy team of researchers with a pre-existing company went out, got funding, then gave the VCs board seats.

If you are going to copy and paste from wikipedia, read a little further:

>In December 2015, Sam Altman, Greg Brockman, Reid Hoffman, Jessica Livingston, Peter Thiel, Elon Musk, Amazon Web Services (AWS), Infosys, and YC Research announced[15] the formation of OpenAI and pledged over $1 billion to the venture. The actual collected total amount of contributions was only $130 million until 2019.[6] According to an investigation led by TechCrunch, Musk was its largest donor while YC Research did not contribute anything at all.[16] The organization stated it would "freely collaborate" with other institutions and researchers by making its patents and research open to the public.[17][18] OpenAI is headquartered at the Pioneer Building in Mission District, San Francisco.[19][20]

According to Wired, Brockman met with Yoshua Bengio, one of the "founding fathers" of deep learning, and drew up a list of the "best researchers in the field".[21] Brockman was able to hire nine of them as the first employees in December 2015.

Also good reading: https://web.archive.org/web/20160427162700/http://www.wired....

In SV parlance "founder" is a hands-on, full-on role to take the company from 0 to 1.

Sure, the convention in SV is also that the person created the company and is not an employee of someone else. The founder is there at the Inception of the company and it is their idea.

I feel like the facts are on the table, and if they don't convince someone then they are unlikely to be convinced by more facts

I’m sorry but none of that says that Sam or elon are founders. Your big long wired blog for lack of a better term said nothing of the sort.

facts like Altman claiming he’s got a successful coup goin eh

I think you're letting your personal feelings about Sam Altman cloud your judgment as to what facts you will accept and which you won't.

Whether Altman has a successful coup going or not is immaterial, but whether is a founder or not is what you asked and you got a pretty solid answer. You can like the answer, or you don't but it stands unopposed.

I have no personal feelings to Altman what so ever. What I dislike is the worship and rewriting of history to appease the business tycoons in the tech industry who are little more than parasites in many cases and I believe this one could be one of those cases.

On the flip side I think your blind worship of these tech business leeches may be clouding your judgement.

> regular employees have non-competes in their contracts (sometimes void/illegal, depending on the local jurisdiction)

Non-competes mostly have an effective after period, so Altman's situation is a bit more akin to my companies "only job" policy. It means I can't have a side hustle or alternative means of making money. Enforceable or not, while you're employed you can be fired for anything.

I don't see a conflict at all but IANAL. His biggest issue is GPU cost. He was hustling to vertically integrate and knew that the non-profit nature of OpenAI would not allow for it. So he starts to think about the creation of a separate company to handle that with exclusivity of some kind. It makes perfect sense. No idea if he could get the board to go for it of course, but that's clearly something he would have needed to do to make it a reality. And it's completely in his remit to make these kinds of bets. This board may have seen this as an overstep but all they needed to do is tell him no. I'm sure he would have made a persuasive argument had they let him. This board seems completely out of touch with the reality of running a company like this. And GPUs have nothing to do with AI safety, that's like saying a faster neuron makes a person evil or good.

"non-profit nature of OpenAI would not allow for it."

How so? Seeking more efficiency and cost-effectiveness absolutely does not conflict with a non-profit mission.

You seem to be arguing that it isn't a conflict with the non-profit charter. What people are saying is that it's a conflict of interest. It's called self-dealing and one of the most common forms of conflict of interest.

There’s no immediate conflict of interest though. No self-dealing has actually occurred yet, and you have to assume a tremendous amount of bad faith years in advance of reality to get there.

Suppose I am on the board of a wildlife preservation nonprofit, and I am thinking about starting a catering business, and talking to potential financial backers.

If you want to take it to the extreme, you could argue that I could award my catering company a lucrative contract to provide food for the nonprofits cafeteria. But that would be entirely speculative on your part. it would by no means justify immediately firing me from my position at the nonprofit. If you take those hypotheticals out far enough, you could basically argue anybody with any other job or role is potentially in conflict of interest. But again, doing that requires assuming a tremendous amount of bad faith.

Come on, I think it's really obvious that the largest AI nonprofit in the world might be interested in chips, to a much larger degree than a typical nonprofit would be interested in cafeteria food.

I think the analogy is more like someone on the board + Executive Director of your wildlife preservation nonprofit buying up land with potentially endangered animals on the side, with the (presumed) intention of selling the land back to the nonprofit.

Clearly a COI even if it's net good for the animals.

So why not just judge it a conflict of interest if he tries to sell them to them? The board can evaluate the options available to open AI, and agree to allow him to buy from his chip company if and only if it's in OpenAI's interest to. Firing him years before the chip company even exists in the mere anticipation of that possible conflict seems…premature.

Direct and immediate Conflicts of interest can arise if decisions you make for one company could regularly come into conflict with decisions you have to make for the other, example, if he was starting another AI company making rivals to ChatGPT. But in the case of the chip company, nobody has really made a persuasive case of how that would happen here. In terms of interrelatedness, maybe they would build chips customized for openAI. But that would be a potential benefit Open AI, not a conflict!

There is an immediate conflict of interest. Because one should immediately start to wonder if Sam is holding back the company from making their own chips or perhaps avoiding partnering with another supplier because he wants to funnel future business to his future side project. That may be in the best interest of the non-profit, but it may not be, we can't tell, because of the conflict of interest.

I'm sorry but I have to disagree. There are very few other suppliers. We see it with Apple and ARM...without this vertical integration the M2 laptop upon which I write this post would not exist. When one is running a company, the biggest enemy is always time. Had Apple not planned the ARM move more than a decade ago, it would not have happened in time to revamp the mac lineup. What you see as a conflict I see as making good bets and moving the ball forward. Given more recent events, its abundantly clear that the board was out of touch. Letting OpenAI fall behind would have caused it to fail in its mission of safe AGI. When making these judgments, its always necessary to consider the alternative timelines that would inevitably occur.

Wow, that's some Adam Neumann level self-dealing.

Sam's Alameda moment

Assume someone had been working for a startup, as CEO, for free. For years. That someone had cut himself away from any way to compensate his work directly. Due to altruism or poor planning or a result of a negotiation.

At a later time other ventures that this person had been propping started failing and a money injection deemed necessary. It would not be surprising, if that person would try to risk his unpaid work position and monetize it.

Recent tweets from Sam “go for a full value of my stock” seem to indicate towards this direction.

He presumably at least got paid a salary as CEO, so it's not uncompensated work. In any case, being in some kind of suboptimal financial situation isn't an excuse for breaking the rules.

I don’t know. It can easily be the case of $1 comp, and insane amounts of work and pressure, including financial, from all sides. It is quite clear that crypto is failing and he is deeply engaged into crypto with the WorldCoin project. For all we know, personal moneys may have been spent on crypto.

Non-competes, like so many other workplace rules, only apply below the C-suite

I think the reverse is true. If you're a grunt no one really cares and it's not worth it to enforce. If you're c suite and leave to start a competitor you can be sure you'll be hearing from company lawyers. Similarly mandatory gardening leave generally grows with your title

> I think the reverse is true. If you're a grunt no one really cares and it's not worth it to enforce.

As a grunt who was handcuffed for three months after switching jobs while my former employer and my new employer tried to sort out what I was and wasn't allowed to do... no, this is not true. And the document I ended up having to sign means I can't say anything other than Amazon (former employer), Microsoft (new employer), and myself came to a mutual agreement.

The CSuite walks in with a golden parachute. No SWE job automatically vests a ton of options when you're fired by the company.

I sincerely don't give a shit and am just kibitzing but: why would this be a conflict of interest at all? One of OpenAI's biggest strategic concerns is getting out from under Nvidia. OpenAI is never going to do hardware; they don't even want to rack servers. The ultimate customer for a new AI chip would be Microsoft, not OpenAI. OpenAI is research and software. Hardware is a complement, not a competitor.

You seriously don't see a conflict of interest with a board member and CEO creating a separate company that sells to the company he is the CEO of? That is the definition of conflict of interest.

Yeah something can be potentially net good for a company but still be a COI. If I'm in charge of awarding military contracts and I give it to a armaments company my son is a VP of, and I didn't disclose to anybody that my son was a VP there, this is a clear COI even if I later argue (and people agree with me!) that my son's armaments company is best suited for the business.

At the very minimum I should not be the one to make that call.

A more usual method is to have the non-profits contract with a for-profit "management consulting firm" that does the running of the real things. Nonprofit can take in money, pay the for-profit for providing the thing the donation was earmarked for; all legal and fine. The same people can be employed by both companies.

Any profits the "for profit" arm makes can then be donated back to the non-profits for financial advantage in holding the money, if any. Lather, rinse, repeat.

I think Altman hails from a kind of hustle culture that may not go great with AI safety:

>I just saw Sam Altman speak at YCNYC and I was impressed. I have never actually met him or heard him speak before Monday, but one of his stories really stuck out and went something like this:

> "We were trying to get a big client for weeks, and they said no and went with a competitor. The competitor already had a terms sheet from the company were we trying to sign up. It was real serious.

> We were devastated, but we decided to fly down and sit in their lobby until they would meet with us. So they finally let us talk to them after most of the day.

> We then had a few more meetings, and the company wanted to come visit our offices so they could make sure we were a 'real' company. At that time, we were only 5 guys. So we hired a bunch of our college friends to 'work' for us for the day so we could look larger than we actually were. It worked, and we got the contract."

> I think the reason why PG respects Sam so much is he is charismatic, resourceful, and just overall seems like a genuine person.

https://news.ycombinator.com/item?id=3048944

The crypto WorldCoin thing is probably a bigger example.

That strategy was tried with Barry Minkow, with "ZZZZ Best", the fake building maintenance company fraud.[1] He did prison time for that.

[1] https://en.wikipedia.org/wiki/Barry_Minkow

"Its not fraud when we do it"

> While still in high school, Minkow founded ZZZZ Best (pronounced "Zee Best"), which appeared to be an immensely successful carpet-cleaning and restoration company. However, it was actually a front to attract investment for a massive Ponzi scheme.

Apples and oranges.

It's not fraud if Sam's company delivered. Did they?

I'm not sure if that's true. If they obtained a financial advantage (e.g. a contract) via deception, then that could well be fraud. I don't think it makes much difference if they eventually delivered on the contract or not.

It'd probably come down to the legal definition of "deception." It's not Sam's fault if the customer saw a lot of people poring over screens and walking around with papers and assumed they were employees. But if he explicitly introduced them as employees, yeah, that'd be over the line.

Similar to the debate over whether it was ethical of Reddit to seed themselves with sock puppets.

It totally is his fault if those people were directed by him to pretend to be employees of the company – which he seems to admit.

"I contracted some people specifically to pretend to be employees so that someone else would be deceived into thinking they were employees. But somehow it's still not my fault that this person was deceived."

Seems like a weak defense.

Well, they were employees, after all. Temporary ones. Very temporary ones.

Yeah, this kind of pedantry isn't going to work in a legal setting. Obviously the intent was to deceive the person into thinking that the company had a large number of regular employees.

I still don't see where the bright line of the law was crossed here. Is it really so surprising when people who are willing to do things like this get ahead of people who aren't?

Are you really so certain that we'd be better off otherwise?

Is it surprising that people sometimes lie and cheat? No, of course not.

Is it surprising that people who lie and cheat sometimes obtain an advantage by doing so? Again, no.

But yes, I do think we would be better off without people lying and cheating.

IANAL and I do not claim that the law was necessarily broken in this instance, but the intent was clearly to deceive a business partner in order to obtain a financial advantage. I mean just look at SA's own words here:

> So we hired a bunch of our college friends to 'work' for us for the day so we could look larger than we actually were

The deceptive intent is explicit in his own description of events. It's honestly quite silly that you are looking for some semantic get-out clause here when SA's own statement is so explicit.

There was another AI start-up, one backed / supported by various conservative politians from Germany and Austria thatvdid the same thing, hiring people to look busy when customers (bad) and investors (a lot worse) showed up at the offices: Augustus Intelligence.

At best, this is fake it till you make it. At worst, it is fraud. The tiny, tiny differce is whether that next investor shows up or not. Just ask FTX.

I do not respect people resorting to that kind of thing.

I have never seen him speak, but odd that an example of him faking it is supposed to make him seem genuine?

AND a complete Moby Dick move. You're going to suddenly get up and compete with all the chip designers and beat them at their job? Computer chips are literally the most complex products in the world. It is an astonishing development that the most profitable company in the world was able to make chips, let alone chips that beat Intel and Nvidia in some key metrics. It took Apple more than a decade of shipping chips in phones to be able to move up to desktop-class.

The board was right to get rid of a guy who would rather hunt a white whale than do his job.

And now they want him back because the investors want him back.

What a mess.

> SoftBank and others had hoped to be part of this deal, one person said, but were put on a waitlist for a similar deal at a later date. In the interim, Altman urged investors to consider his new ventures, two people said.

JFC

> that the non-profit would eventually pay a lot of money

That's not a fact. It's your assumption.

And not a particular good one given that Microsoft is OpenAI's partner and is providing compute services at no cost.

When you do lunch with Microsoft, you want to bring your own spoon.

Better make it a long one.

> All fine and common!

Sam got fired, so obviously not fine.

There is no evidence that this is the reason though.

And so everything needs to be caveated with "this is an assumption".

major mistake by OpenAI's board not to mention this if it actually did play a role in removing him, public opinion now is that it was a coup over AI safety stuff. OpenAI board seemed to have no PR plan

They mentioned it clearly. They said had hidden something from them.

The other story was later constructed in forums and media.

Conflict of interest?

This is no different than Google designing and manufacturing their own chips (TPU, tensor processing unit)

The claim is that he's starting different AI hardware companies on the side, not that he's doing it under OpenAI's umbrella. It's more like if Sundar tried to get funding for some side hustles while talking with potential customers or contractors of Google, without disclosing to Google's board ahead of time.

Not at all fine. As we’ve just seen, it’s a fireable offense.

One example of conflict of interests is Adam D'Angelo is sitting on OpenAI's board when Quora is building a competitor, Poe.

And it has been rumored that D'Angelo helped a lot with this coup because he did it before at Quora.

Every single one of Elon's ventures are conflicts of interest with each other. Simply seeking money for a chip venture is small compared to pulling out Tesla engineers to work on X, the stuff with SolarCity, etc

As Twitter's usage declined the extra Sacramento DC was sold to Tesla.

Despite Musk saying it was terrible.

https://www.theinformation.com/articles/after-elon-musk-bash...

It is funny that you say that after Elon cofounded openAI and then left due to conflicts of interest in the AI space.

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