Microsoft is eating the world
aisupremacy.substack.com
aisupremacy.substack.com
Maybe the board thought they could get some concessions from Altman/MS by playing hardball, and it just backfired on them. Or maybe they already knew that it was too late, and that by antagonizing MS and imploding OpenAI they might shake "something" unexpected loose to their own benefit.
Studied by who? It is the board of a non-profit company that doesn't have "maximize shareholders profits" as reason to exist. This will be studied as one more capitalist takeover. I hope it somehow goes bad for Microsoft.
But until we have evidence for any of these remote theories, I’d argue they’re all equally uninteresting.
Ex-Nokian here.
It's hard to search foreign press.
https://www.forbes.com/sites/terokuittinen/2013/09/24/nokia-...
"According to changes implemented in 2010, Elop was entitled to immediate share price performance bonus in case of a "change of control" situation"
And then a couple of related articles,
https://www.forbes.com/sites/joanlappin/2013/09/25/anger-at-...
"Nokia chief executive Stephen Elop is catching heat today in Finland after the country’s biggest newspaper, Helsingin Sanomat, reported that Elop was guaranteed a $25 million payment if he was able to sell Nokia’s cellphone business."
https://venturebeat.com/mobile/finns-are-in-an-uproar-over-e...
- Nokia's share price drops steeply as the company drifts close to cash flow crisis under Elop.
- Elop sells the company's handset unit to Microsoft under pressure to raise cash
- The share price rebounds sharply, though remains far below where it was when Elop joined the company.
Sorry but that sounds more like clever negotation from Elops's side and like a naive blindsided board.
They've always been mediocre and probably always will, I can't see any particular purchase, or poach, changing that.
But they do have heaps of money. It's not clear that will be enough.
Worse, they're increasingly user-hostile. Any tech in their hands can't be trusted to respect users.
Google seems ambivalent in this respect, but there is no question where MS's heart lies.
The fact that Microsoft might not have directly recruited Sam and his team is less significant in light of their promise of substantial growth, which ultimately swayed Sam's decision, whether he consciously realizes this or not. This now leads to him misrepresenting information to the board, leading to his removal. This scenario humorously mirrors a common personal dilemma: choosing between financial gain and leading a meaningful, sustainable life. Sam's choice is hyperbolically likened to 'selling one's soul to the devil', reflecting this paradox.
Based on what?
While undermining its safety argument. Better: open it to partners, subject to vetting and contractual terms regarding its use, in exchange for cash and/or compute.
For someone not knowledgeable in this, why is this the case?
So you open this to the world - what's the stop the Chinese government from weaponizing it to both suppress their own citizens and attack foreign adversaries?
Except... it does and the net effect was seen just this week as Xi started softening his tone realizing that his economy cannot keep up without access to advanced technology.
In other words, for many people in the world that wouldn't be an issue, it's already in the hands of a country that had invaded or intervened far more countries than China in the past few decades
I would care what China would do if China was going around the world killing millions of people in the name of "national security".
Alas, so far that privilege went to Great Britain, France (Napoleon), Germany, US and recently Russia and Isreal.
Still no China on that radar.
That belief underlies the OpenAI's prevailing nonprofit mission and is the reason for its existence.
Prematurely loosing AI amongst the lay people is their nightmare scenario. Only the technocrat elect can perform the ritual safely and only then if they work together and avoid earthly temptation for power and money.
Currently the for-profit models are Nerfed to not allow bigoted or sexist (against women) text to be generated but that seems to be it. What kind of text are we being protected from?
Sexist etc content is a footnote compared to the potential for an automated, proven, and tuneable technology of mass persuasion and impersonation.
So - massively addictive adtech. Reliable and effective political and ideological propaganda. Bot farms and "credible" fake media content produced at scale.
Imagine those being used against a relatively defenceless population to creative division, undermine personal and collective confidence, and encourage stochastic terrorism and other kinds of violence.
The risk with AI is monopolization by humans using it for nefarious purposes. This risk is reduced through openness and transparency.
Which is just political marketing for regulatory barriers to entry lobbying.
But neither seem likely to want to open anything meaningful that is is AGI related-- locking the public out of powerful AI is a point in which all the major 'safety' factions are aligned. (well not the monopolization concern faction, but they're not a player here and usually don't hide behind the safety banner)
But seeing the shenanigans of the past few days and how MSFT failed to secure a board seat for their $$, it would not surprise me.
A man can dream...
As far as I'm concerned literally everyone else is "one of the good guys" when the other side we're talking about is M$ and the psychopaths that are involved with it, regardless of their actions.
You mean destroy the rubble that's currently left in the offices of the company formerly known as OpenAI? If 500-750 key employees have departed to a competitor, what's left to protect?
Yeah, it would 80% be a "fuck you" move, but the other 20% would represent a pivot to an "open source" model like the name once implied
Or they would be triggering a billion-dollar lawsuit that would surely bankrupt the company.
https://news.ycombinator.com/item?id=38349969
Even if there isn't anything explicit, there may be an implicit promise that a strategic partner won't share all the company secrets with the partner's competitors.
See also https://twitter.com/karaswisher/status/1726598360277356775 which was merged into that discussion above
OpenAI's best asset isn't GPT-4. GPT-4 is just an interim step to GPT-5 and 6 and 7 and so on.
Imagine we had this conversation when GPT-3 was out. Just open-source it and disband the team! And what? Nothing.
The people are always the greatest asset of a software company. Always. That's even the case with AI. At least... until I guess we get an AGI which is so powerful that it can self-improve, then I guess screw the people. But then that applies not just to the OpenAI team, but the world as a whole.
For the HN readers commenting on this.
People think you open-source something and it starts improving rapidly. But that's not exactly how it works. The first push is almost always commercial. And only when the product is mature, well understood in and out, and people get bored of paying for it, then open-source initiatives start showing up to democratize this product type for everyone without dependency on a single vendor.
Think like Unix -> Linux. Linux is largely stagnant, but that's also because it's "done". Sure tons of patches flow in, but if you need a major architectural change, with breaking changes, FOSS can't deliver that most of the time, if ever.
Are we done developing AI? Nothing major to add, that's it? Hell, no. We're merely starting. And so... we need to see what commercial companies (even under the guide of not-for-profit ones) can do, before we start demanding open-source versions.
You're saying that would be the best outcome, but... why?
- The OpenAI staff stays and the current board is replaced by Microsoft
- The OpenAI staff leaves and goes work for Microsoft.
Either way Microsoft has 100% control over this technology, thus the best possible outcome is OpenAI releasing it.
> and its training data
I'm not sure you can opensource something you don't actually hold any copyright to..
I'm deeply concerned about it falling into the arms of private actors, specially the worst of them, M$.
They have their own kind of AI technology which serves different purposes and we probably know nothing or very little about it. It's not like they will be sharing their tech with the World, much less open sourcing it.
Besides, state actors probably already have tech that far surpasses GPT and they're probably using it for a lot more than making people feel clever for copy/pasting a CRUD app together for their useless startup.
What do you mean by "moral"? State actors have interests, major corporations also have their interests. Very few of them can be called moral.
Big tech was always about power and money. No morals there.
the new CEO wanted to focus on something else than LLMs, because it's believed to be a dead end, and allocate more time and resources into grounding AI.
they don't want AI to slow down, they want to try out something else and not put all their eggs in one basket. extremely big difference
https://x.com/eshear/status/1703178063306203397?s=46&t=yWOhq...
I see nothing in that thread that says what you’re talking about.
Yes, something big and weird is happening in the corporate structure of some of the largest companies in the world.
No, it actually probably doesn't matter much to most of us. If you were using Microsoft's OpenAI-powered services, they will continue to work. If you were signed up for one of OpenAI's products, you may need to re-signup with a Microsoft one, or maybe not. If you're concerned that AI development will slow down, it probably won't, since the engineers and capital will end up at one company or the other at the end of the day. If you're concerned about AI-safety, well, honestly, you probably don't have much more reason to be concerned.
Yes, it is gripping and entertaining to watch. No, it is not some Assassin's Creed shadow war being waged by philosopher-kings playing 12D chess with the fate of humanity in the balance. In all likelihood it's a couple people making a big mistake, and the scope of their mistake will be limited by the combined interests of many powerful people who just want things to go back to the way they were last week.
They could turn WSL into the return of Xenix, and their market position would hardly change.
Satya really did it, cloud and services.
Now they have too much power. They are practically running a part of the government.
Am I missing something here? Altman was fired by the board, without a warning to MSFT. Antagonizing your biggest investor is likely a much, much worse idea - and see the result.
I'd bet Microsoft created a plan-B in case OpenAI went rogue like this, big companies just don't react this fast otherwise. Things didn't go this fast even when Elon Musk took over twitter, and things happened really fast then.
Do we know if they acted that fast, or is it not possible that they've already been negotiating for months to hire the key staff and that Sam got fired when the board found out?
It takes some pretty good gymnastics to land that theory.
it all makes sense in hindsight that Microsoft committed a coup, and it's not from inside OpenAI
I can't wait until people realize how much of a nothingburger ChatGPT really is.
Think of the possibilities!!
Unrelated: rolepad.com looks real good, best of luck with that!
He did exactly that at Y combinator, and he was the ringmaker in turning OpenAI for profit and becoming head of the company. This seems exactly like his profile actually.
Google changed their motto from "Don't be Evil".
Companies may start with good intentions but the pressure of shareholders (and agencies) will take that away over time.
Interested to hear examples to the contrary.
Just think of the Nokia take over
Is Teams the best option? No, but it's the most used.
Is Excel the best option? Who cares in a world where Airtable, Google Sheets, Monday, Notion, is blocked by the company firewall, you take what you can get and you start to do things with Excel that are not a spreadsheet anymore, just because it's the only thing left.
Is Azure the best cloud? AWS and GCP are clearly more developer friendly, but they don't get to choose.
You want to use Jetbrains tools? Too bad, your company decided on VSCode. Because surely those are the same.
You want to use Miro? Too bad, your company decided on Microsoft Whiteboard. Was there an RFP? No it just came with Office licenses.
This is why people are sick of Microsoft, and it's happening again with OpenAI now. Most don't even have a choice to experiment with Anthropic or try out Llama. Some DPO/CTO/CDO exec love their microsoft contract and it's hindering digital innovation so much
There were some other annoyances, like pretending Documents was C:/user/Docs, but really was ONEDRIVE/Documents. Then Some F up happens for some reason, you save, and now you have 2 different documents folder...
Join me with Linux's Fedora Cinnamon, its sooo fast and feature rich compared to Windows. I'm free from M$ thumb. No dual boot, cut the cord and find new programs.
Fedora is also IMHO the most "just works" of the major distros these days, with the exception of if you need the Nvidia proprietary drivers.
Any investment you've made in Windows, including investment in learning how to use it, is a sunk loss. Move on.
As for sunk cost: if you make a living that involved installing Windows, and you make more money than a windows license costs, by definition that's return on investment, not sunk cost. Let's not pretend that "using windows" loses anyone money. And let's also not pretend that you have to choose: I use Windows, two flavours of Linux, and two versions of MacOS. I'm not walking away from any of those, they all do the things I need them to do well enough to keep using them for what I need them for, niggles and all (and both linux and MacOS are just as horrible to use as Windows. Which is "not particularly horrible at all, but plenty of things to complain about over a beer")
It is not trivial to find the commands to uninstall those programs. Many times the commands never end up working.
I'm really not sure the MS's entrenched position is all that relevant.
Yes the world is in a better place and the "Silicon Valley cronies in their Venture Capital towers" focusing on profit are causing all the AI innovation while Ilya wants to slow it down..
That they still have to pay for their student loans?
That the cost of living is too high?
AI and especially a Microsoft AI won't change that.
I'm sure you can say many positive things about Microsoft, but they really are good creating and milking monopolies, and extinguishing competition. Will they make a better copilot? I mean mayybe... More likely not I think, suffocating the new team with internal politics. And anyway surely that's a small part of Microsofts offering.
Will they reinvent themselves as an innovative company in the ilk of OpenAI? I don't see that either.
My guess would be that after months of tortured development and much bad blood, they will make a new stab at a new Clippy. And somehow it will be incredibly wonky too.
Securing most of OpenAI’s talent and ramping that up internally means Microsoft, which is one of the biggest defense contractors and one of three with an IL6 rating is now free to ramp up AI for government with little left to encumber them. Also of note here is Palantir, a silent winner that has a strong partnership with Microsoft to use its secure endpoints to add to Palantir’s own AI suite, and will see a similar path of being able to utilize AI freely in foundry with less legislative scrutiny.
TLDR - will this cement Microsoft’s growing control of AI? Sure, but will be great for USG and the defense sector’s AI prospects.
I think the original thought must have been about intelligence analysis or weapons or something like that.
That's a bold level of hypocrisy.
And if you're blaming individuals: probably a good idea to reconsider whether victim blaming is the right way to go about things, since no one, not even "the voters as a whole", have the power to make the government do things when the government is one of two parties, clearly neither of which is interested in curbing this behaviour.
If it was planned, there were simpler ways to do it. Seeing conspiracy in chaos is a warning sign.
This is what happens when free market capitalism is your economic system.
<meme with fork and electric outlet and "everybody else did it the wrong way">
Most of our problems would be fixed by liberating the regulating authorities of industry cronies. The argument over more or less regulation is red herring at this stage.
Regulating the market is a really tricky business. And once regulatory reigns are lost, it becomes almost impossible, exactly due to the cronying up. To get the reigns on again things like total economic collapses (even 2008 apparently wasn't enough, 1930's was), major wars or violent revolutions sadly seem to be needed. I think we lost the reigns already in the 1970's or so.
Good for whom?
Good for share holders, companies and investor or employees?
And here's what happens when it isn't: https://en.wikipedia.org/wiki/Great_Chinese_Famine https://www.sciencespo.fr/mass-violence-war-massacre-resista...
I know which one I prefer.
Nation states kill for the ideals. Private companies that have the power of a state kill, enslave and pillage only for more profit.
> While some will praise Satya Nadella and hero-worship Sam Altman, breaking OpenAI into two parts will slow down momentum for LLMs and research while handing even more power to the Cloud and Azure in its future
Except that Microsoft nor Sam is responsible for the breaking of OpenAI. It was the non-profit board. Instead now Sam and co will have access to the Microsoft war chest, funding for more compute, chip design, and datasets so if anything they’ll probably move even faster than before.
> Microsoft taking Sam Atman and his followers in, is like shutting down your best investment just for a short-term benefit. These stories don’t usually end well for big corporations.
Again this makes little sense and its very clearly obvious how this makes long term sense for Microsoft. Also they did not initiate this move by OAI
> It’s the job of Venture Capitalist to praise Microsoft, Satya Nadella, and Sam Altman to vilify OpenAI’s board in all of this.
No it isn’t
> Microsoft eating OpenAI and poaching their talent, is the worst possible scenario for the startup that was just beginning to get momentum.
No firing the beloved CEO of the fastest growing tech startup in a decade and ignoring warnings from 80% of employees that they would quit is the worst scenario for a startup regardless of what Microsoft does
This whole post seems like really bad pattern matching by someone who is anti capitalism and tries to frame every scenario they see in business through that lens
How do you know?
We don't know the reasons for Altman's dismissal in the first place.
Maybe MS was involved and the board acted in panic mode to prevent an hostile takeover.
>ignoring warnings from 80% of employees
The warning came after the firing.
No, this is what happens when technology progresses. Developing technology is an inherently centralizing force. What everyone calls capitalism is merely side effects of technology, it is the primary force shaping human societies.
Read some Ted Kaczynski.
I'd argue the opposite, if OpenAI was a pure for-profit company, none of this would have happened. If it was traded publicly, the board would probably be facing charges right now.
How is this the conclusion? What free market and what capitalism? Neither exists and nor have they ever. This is similar to blaming the troubles of the Soviet Union on Communism. It never existed so how would it be Communism’s fault? The issue is more that inflationary and low interest policies incentivize the highest possible return “right now,” encourage debt accumulation, and invert the time order of markets. These pressures then align to encourage the most massive orgs possible because small margins don’t work in inflationary environments. Finally, when you get to the point that you have orgs larger than some countries you have those orgs start purchasing governments and pulling up those ladders. No where in this mess is there a free market, any kind of capitalism, or even any kind of socialism or communism. This is oligarchical fascism which has been the global order since the end of mercantilism.
They have the politicians in their pockets, they have the best talents, they have the computing power, they have pretty much infinite monetary credit granted by the banking union.
There is no limit.
In 20 years, what part of it will be AI revenue? 10%? 20%? 30%?
At 20% that would be a 50 trillion dollar market.
If Microsoft manages to capture 10% of that, that is $5T in revenue per year.
Of course, Google somehow managed to capture 90% of the search market. If Microsoft manages that, it would be $45T yearly revenue.
In the US, software is 10% of GDP. And with growing usefulness, that should increase.
I did not assume that one player is going to capture all value. I stated the number for 10% and 90% market share. Today, AWS has 30% market share of cloud computing and Google has 90% market share of search. Assuming the market leader in AI will achieve between 10 and 90 percent market share seems reasonable to me.
They do not collect 30% of the profit brought in by all companies using cloud computing, but only their infrastructure bills.
You were assuming that Microsoft will pull in 100% of the profit of that 10-90% market share you hypothesize for them, which is not how selling infrastructure services works.