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Comment by goldinfra | Hacker News Reader

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.

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"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

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