Emergency podcast: chaos at OpenAI
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No, i'm welcome to an emergency cross over episode of the vercheres and decoder. I A, I A, I host both shows of about David pears with me. Hello, i'll see this year. Hello, we are surely off on both shows this week.

But given what happened with OpenAI over the weekend, which is a story about word charts, in many ways, we had no choice but to do an emergency episode, our podcasts, especially because alex and I spend our weekends on the phone breaking a bunch of news about the discussions that LED to. What, at this moment is sam alten, microsoft employee, which I can confidently say is an outcome. No one thought what happened in the third.

This is so bananas IT is, the whole thing is insane. I'm very much in the weeds on the whole thing. So David, can you help us get through what happened this weekend? Because this is crazy?

yes. okay. So what we're going to do the following in three parts because I think this is the only way to do IT in a way that makes sense. The first thing we're going to do is just basically tell the stories of the last ninety six hours, starting from sort of midday friday until where we are right now, things are still changing.

There is a non zero chance that real news will break while we're recording this, but we're going to get as close to the moment as we can as we do IT. And I just want to tell the story, although there then I want to talk about the orchards peace they are talking about. We're going to talk about OpenAI as a company and how this happened.

And I know that's a thing youtube have spent a lot of time trying to sort through and others have done really good reporting on over the course. You can try to talk about that. And then at the very end, I wrote this down as just winners and losers.

But I think it's useful to talk about kind of what this landscape looks like going forward. So all of that, that should start at the beginning and and the beginning is friday afternoon, at least as far I can tell out of absolutely nowhere. OpenAI publishes the blog post saying in basically as many words, we have fired same altman as our C.

E. O. That's where all of this begins. So the board fires him. They kick greg brock man off of the board. He then, a few hours later, immediately quit. And as far as we understand and youtube to correct me them wrong because they think they're like minutes leading up to this are very important. No one, including most people at OpenAI, had any idea this was coming, correct?

It's not only that they didn't know is coming. They were actually on a company holiday, so they were taking a like day of arrest because of all the crayons of the previous week where they were announcing all these products that sam was the face of. So not only where they were prepared, but that was actually when they were all actively not looking at what was going out of the company.

And an externally, the company was totally business as usual, right? And had just been on the hartford podcast he had taped in a new interview with casey in Kevin is an interview which they had to can because he got fired two days later. He had been doing other appearance like from all external al appearances.

This was totally businesses usual for this company. And sam was completely shot when the board called him into a google meat, which is also very funny, and fired him. And for everything we understand about that google meat is they basically read him the statement, which is you have not been consistently canted with your communications to the board, and we don't think that we can trust you on the company. And that's all he got. That's all anyone has gotten.

So alex, one of the things we all immediately started talking about was the like ruthlessness of this statement. Yeah Normally when when you're getting rid of your CEO, even if you're essentially firing your CEO, you find a way to do this sort of slowly and nicely so that they get to like step away to spend more time with their family or you know takes some time off whatever. And everybody pretends this is nice even when it's not. This was the opposite of that. Like I I don't know that I can remember a thing that felt as much just like a knife of a blog post as this one.

Ah, yeah, this is ice cold. I mean, this is a saying that you are firing someone in a fairly direct way for a situation like this. Usually, when IT is a cofounder, IT is someone as high profile as sam altman.

Like me, I was saying this, what would be very managed? IT will phase out. You know, he'll phase out of the company. H IT looks like, you know, he's wanting to pursue his passions, those kinds of words. And this was like, no, we have knife uh, sam alt men in the back in the night and I mean, just like when I was saying about this being businesses usual, he was literally at a conference the day before and the night before even and I told was like i've gotten go, i've got a meeting and I think that was right when all this was starting. So he was literally on stage representing OpenAI with a bunch of artists in oakland, uh, right before all this happened.

Okay, so all this happens. Uh, ma morality, the the co of OpenAI is promoted to intern CEO, and this is where we are. So then immediately, everybody to starts, scrambled ling to figure out what the hell is going on here basically was the vibe at the time you guys are talking to people.

And this one answer about what was going on starts to trickle out. This also like thousands of years, but my my memory of this is like the the leading reason became a split between sort of two factions at OpenAI. One that said, basically, we are a research project designed to make sure that we can make A I good for the world.

And another side that said, this is a gigantic business that we're going to continue to run like gigantic business. And that search procul ate up is like first sort of uh, leading like educated guess and then we got some reporting that said that was part of the split. But how would you frame kind of what we learned in in the early hours of like what the actual fight was that LED to say i'm being fired me. What was your sense?

I still think we don't know, especially because today elias saskia is saying that he regrets his actions. But the theory on friday night, on friday night, the theory started bubbling out in the thing everyone are talking about was that the non profit of OpenAI, which owns OpenAI, the commercial entity of which sam is the CEO.

And the theory on friday night that start bubbling out is a OpenAIr i s a n onprofit t hat's t he b oard o f d irectors t hat n on p rofit c ontrols a c ommercial e ntity o f w hich s am w as t he C EO a nd o f w hich m icrosoft i s a n i nvestor. That board thought the commercial entity was moving too fast to commercialize alliance, right? But they thought that the danger of the products was too high for how fast time was moving.

And there are some religious split, ideological split like that was all very hazy between the people who believed we are on, of course, to destroy humanity and same and saying, we're going to do a store for GPT and you can make large that was out there like that was the conversation that was happening was the same, moving too fast with a dangerous technology to the board. Kane, for that is ellia, uh, religious believer in the idea that we need to be safer, which is what, you know, open. I was founded to do this safely and make agi.

And the existence of the attention is not new, by the way, like that whether or not that LED to what has happened in the last four days yeah I think you're rate, we still don't know. But the existence of that attention between those two sides is pretty real and well established at this point .

in why we have anthropic and why elon is doing another AI company right now. So OpenAI has been consistently chaotic, inconsistently split itself apart, really seems to be getting, I just think anyone expected IT to split from the top in such a dramatic way.

And I think maybe now is where it's probably good to explain who actually made this decision because really this comes down to six people, right? And so we we should go through exactly who the people were. They made this decision because increasingly, it's becoming clear that now it's three people against the rest of OpenAI, which is just in same position, which is insane.

Also, this is not a public company. So we don't have a record of these votes. The board has not said anything.

We don't know. This was a unanimous, but we don't have a majority like the reporting is that it's a majority. But because of what else is saying today, IT is actually really unclear what happened here.

Well, here's what we know. So sam and greg posted on x that millia, who is a cofounder, the chief scientist, uh, really described to me by many as, like the brains of the Operation, one of the most influential AI researchers in the world worked at deep mind before kind of the I doom person. I would say the most prominent one inside the company, he was the one who told samon gregg they were being fired by the board at that time.

The board was six people, including salmon, greg. So greg is the board chair. So the board chair found out he got fired from his own board, which is I don't know how that works.

Yes.

no clear. What's clear, because we know ellia was the one who communicated the message, is that the board needed majority. So they needed four people. The other three members of the board, besides ellia, are not open I employees, right? So they got elliot to decide with them, kick sam and greg out without any notice. And now ellia saying, after all of this and after pretty much all of the company is set to resign and go to microsoft, eh sam, I actually regret this and I also what code of microsoft was sound if we don't bring them back.

okay, we're going to get to that like a heat. unbelievable. Spoiler alert on this story. Come anybody listening .

to this as well as oil? If you are listening emergency episode of this, it's like you're in IT. That's fair. yeah.

No, I think where all this goes is very interesting. And I think the little piece of this is actually surprising. But just just to get back to friday night because I think like the timing here actually matters a lot.

So friday night we started learning the reasons that happened. I believe three high level OpenAI employees all resign right after this, all goes down the same crag. Simon, greg, as far as we can tell them, curious if you could have heard anything about this, immediately go to work spinning up a new A I company.

I think IT IT was very obvious to everybody immediately that they could just like have a company with A L L C. In a name and people throw billions of dollars of investment at IT here. And so they started the the things that have been reported are that they were building, uh, are they were thinking about building an A I chip companies rival in video.

There's been the thing with sam and Johnson, eve and mosses on working on A I hardware sams learn investor and humane in which is forever 和 areas。 Did you guys learn anything about what they're like? Counter idea might have been if we landed in the world of friday and I, where they just went often started their own company.

no. And I I think it's actually important to to fill that in a little bit. And if you ever been fired, you know, the first thing you do is you to plock your revenge like a very emotionally plot revenge, right? And that is what was happening.

That is what that communication was, will just start a new cup like. And just, these are still people. There are very human people, as we discovered through after reactions of the weekend, they might think there, the masters of the universe.

They might be playing with eighty billion dollars worth of shareholder value. But they are people like just deeply emotional flag people, just like everybody else. And so that first wave was very much a revenge wave, like they had no notice.

So they had necessarily no plan. So we'll start a new company. I can get the money, everyone will come over. That was a burst of communication that I think was rooted in just the emotion of the moment. Then I think I won't got some sleep. And then we we entered into saturday where alex and I broke the news that the investors were pressuring the open in the eyebrow to bring these folks back, which blood into today, in again, the the absolute predictable outcome of today. But I think the friday night we're just going to go started a new company was just the first heated emotion at that moment. And all the people around them were very much saying, hold up like can we just control y this thing and fix IT like I heard like my interest is just fixing IT you like very directly from some people like I am just trying to fix this is ridiculous.

I should have never happened. So I I believe that would also, alex, tell me, if you agree with me on this or not, I would assume that every venture capitalist on earth with sam altman phone number called him on friday night and said, tell me how to give you money .

for your next thing for sure. So I mean, is your point that like they should have just laugh and not tried to?

No, I just I think now I think you're right. But I also think sort of parallel universe in which they went to start that company is not that far off.

And that he was impossible.

right? IT was IT was a very easily accomplished thing. I think you're correct that that the money was flowing, the support was public, right? You saw they know costa, who runs coast ventures, just publicly tween how much he supported, like the money was available from all of his existing investors.

How from microsoft, right? But the thing that I am just trying to underline here is that first wave on friday night and will start our own thing was reflective. He was not considered and I there's a big gap between will support you in whatever the next thing is and writing a track against a business plan in that gap was as far as we can tell, but no one ever thought about a crossing OK.

That's fair, right? And so let's get to saturday because that's when stuff gets even weirder somehow. But first, we're going take a quick way.

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All right, we're back. So we've had the break up. We've had the feelings really putting up X, C away messages and and then saturday morning in the bay area somewhere, I don't reconciliation begins now I take me through like the beginning of the story on saturday.

So what we had heard is the investors and opening up, which is mostly the commercial entity, they're putting a lot of pressure on. Hey, we need at least know what happened. We need to your reason, and we need to see if we can resolve this, the situation that LED to what I am testing is yet more google meat calls. And I just want to keep highlighting ting this because I think we are all imagining some like very tense in person meetings. And really everyone was kind of just on the phone.

I mean, we're all imaging the board room from succession. That's what's in every boy's mind as we go through this. Like a bunch people sitting around the table raising their hands like with great intention.

I'm saying I don't even know cameras wrong. This is a lot of people who are like alone or like in small groups of people in various places.

Also, just very important note, ten billion dollars from microsoft can still not make you use teams.

The most important. So we start hearing there's all this pressure and alex actually hears, hey, they might bring him back. So alex, I just start calling everyone and we broke this, what we be and remember who we be, but we beat someone by six minutes to the story.

The open as board is in negotiations to bring altman back in. The most important piece of that story is he was ambivalent about IT that was reporting that we had. And his condition was, i'm not gonna work for these people and they just fired me for no reason.

They all have to go, which is understandable.

It's just an incredible condition to impose, right? So even from that moment, like we get this reporting, we break the story. We're like high five ving.

I'm thinking and alex is thinking, okay, to make this happen, four people have to publicly admit they made a mistake in resign in disGrace yeah, this is, uh, high mountain. Who knows what will happen next? And then we spent for last week on the fun yeah.

alex, what was your sense of whether that those were kind of real request, whether that was, again, some saying i'd like to come back, here's my rational list of vote I will take or sam being like, fuck me five.

I think IT was pretty clear that sam had the upper hand as of like saturday, midday. And then we had reported that they had a five pm deadline to reach a deal with the board. And the thing that was going to happen at that point was if IT wasn't reached, sam camp was telling the board there's going to be mass resignations. The entire company is behind us.

Is that why you think you have the upper hand just because IT was so clear, so quickly that open as the company was behind him?

I think what everyone underestimated is the resolve of what ultimately was three people to not have him come back. But that and the thing is like the board has been radio silent. You know, aside from that initial statement and an internal email that reiterated the statement to employees sunday night, no one from the board has said anything publicly enough.

They have an elaborated on anything. So that's important. But IT seemed like sam is getting the upper hand.

The five P. M. Deadline passes on saturday. I met a party, and new life is like where i'm like stepping aside.

And you calling mean like what is happening? Does this mean resignations? And then we look on x and I I want to know IT is deeply ironic that all of this has been playing out on x because it's all training data for grown. It's all training data for eons. Open a eye competitor.

This is all just a planned to poison rock. You're like, like how do we replace to you? It's like here's some ideas, right?

And it's also there's a lot of deeper irony there. Were they alone we can get into at some point. But we saw this very public display of support for sam saturday night with pretty much everyone to open a eye, you know, quote, to eating him with the heart amoy.

right? So same tweet, something like, I love the OpenAI team. And as if they had, you know, coordinated this in like a high school cafeteria, they all quote, tweet.

IT with hearts. They all go to exactly major high school cafe vibes and then, uh, we're all thinking like, okay, this maybe means uh, he won like we're all for to like new line rashed our heads and then you know you wake up the next day you realized that was a pressure campaign to show that sam actually did have the .

backing of whole company yeah and so we had heard we we had reported this five pm deadline with five pm pacific. So that decline comes and goes and we are scrambling, texting everyone in the universe like what is happening. This was a deadline, right? Every wish quit.

So they start tweet the hearts and IT was actually very unclear whether this was we're all quitting right now or sam has one. And the online reaction was like instantly polar ized by binary ario action. Like people seems what it's done in our instinct was we would know, right like this is cyp tic. We're doing high school away messages on x it's absolutely not done, but we still don't know and there is no further conversation after that like I was basically told go to bed by a source like you're done the day like we did this thing is the show of force.

Like everyone has to go to sleep now we will try again tomorrow so that was the end of that day um I will say that my favorite conspiracy theory about this is that a mislead A I was instructed to get people to watch the lost biggest f one grandpre, which started want to have me turn. And I was like, this almost worked. Like, I almost watched this, but I wanted that anyway.

Then we woke up the next morning and we were who was basically the status quo, like this pressure campaign, had not moved anything. We were told, care switchers reported this. We were told that there was a noon pacific deadline, which they blew right by.

And then we reported, again, there was another five pm, that line. So my response that was, is this real? You can only issue so many five pm automated in your life, especially in sequential days. And I was told, yes, this is a hard deadline. It's real today, like either this happens if I, P, M, today, or we go in another path.

And I thought, and how do we for this? And that is when sam Whited a picture of himself in the OpenAI offices holding a guest badge with the caption first and last time, everywhere, this patch, which is right, that's the ultimate like either this is getting fixed or i'm never coming back here again. And so that was when I felt control saying OK, it's like we're doing the five pm thing again. But i've got the guy like issuing the automation like this makes sense to me yeah.

So then they then spent the whole day at OpenAI headquarters hashing this out, basically having what I would assume is just the same fight over and over, over again, sam, trying to get the board to resign disGrace, and board not wanting to resign, disGrace.

There are some internal discussion there about picking the successors for the board and the feeling, and we don't have the same type of this. So it's a little shake here. But the feeling was that people were suggesting candidates.

We heard a lot of what I would call like web one point, own names shared. Sandburg was in the next, like, right? mrs.

Mires in the mix, like all these, like old heads who are from that era you know the adults like we're gona hire adult supervision for google. Like I like when is arch magna show up right? Like this is these are the kinds of .

people were talking about. I mean, if you saw a very public web one point tech executive like tweet support of sam over the weekend, most likely trying to get on .

the .

board did cost to o just appears that of nowhere at one point.

Now it's just like these people are just like in the format they are available to show up and like running your company a couple of years.

Like bret Taylor, we should know. I mean, bret Taylor would like the guy who literally just negotiated the sale of twitter to iron and the second most dramatic board room tax situation of the .

last decade yeah yes. Like like, I keep kym capital a adults, although no one here is that at all but like they have that rep. Like here's the cast characters and we heard that, uh, such an adela was mediating this conversation right in his point of view was he's pretty neutral.

He just wants to over weth. He needs he needs a stories to tell microsoft rehoboth ders on monday morning. And that is microsoft interests stability for its shareholders because this massive dependency opening on.

and that was one of the things we should sit on friday, is that this all happened while the markets were still open on friday. And microsoft stock like tank as a result of this happening like this was the the biggest public blow back on this was onna. Come back to microsoft in a pretty real way. So IT makes sense that nadella was going to be directly involved .

in doing in this ticking clock for microsoft. I think IT is underappreciated, but I was very real that microsoft needed a crisp thing to say on monday morning one way or another. So I always had IT in the back of my head, like at some point, this has to hit some kind of resolution because microsoft will not demand IT, but we'll just create a resolution to say to a shareholder.

So there is all just like vetting of these like old heads, the the og come to town, right? So the vive and getting and again, we don't actually know everyone is altogether we know there is a lot of opening high people that I quarters the board was there actually. But the viBrant getting is people are firing names at this board and the board is not taking him seriously.

And in the meantime, they are running their own search for a new CEO because their interm CEO immorality has cited with them in the meantime by publicly during the hearts campaign on twitter. She's posting the heart, right? So she's what a, she's gone over.

I mean, that is just absolutely trouble. Sh, when I say these are very flawed human people, like we're going to win this five by posting hearts on twitter, is, I want to say about that one day I will like, have had enough time to process that situation. But mirror has gone over to team.

Sam looked very publicly, so the board needs a new CEO. So they're getting toss these names and everyone is hoping that they will accept some names and resign and the new names will take over. And in the meantime, they are looking for a new CEO.

And that is more or less what is happening all this sunday as the five P. M. Deadline draws every year.

So we hit that deadline. And again, nothing. Alex, what would you have? Where was your head at sort of the end of sunday? Like obviously, things get crazy several hours after that deadline. But like where were we at the end of that day on sunday?

Do you think I was feeling like if we didn't have an announcement by five IT wasn't gona work out and we were kind of getting back channel by midday sunday, things were taking a turn and I I didn't obviously know I could have expected what actually happened. This is the most like I was singing at the top bananas thing.

But yeah, I think people were generally people who were close the story were thinking, like, okay, uh, he made IT very clear publicly. This is the last time he's setting foot in the building. The deadline is past um and it's not looking good.

And and there's a version of that, that would have been a very dramatic weekend that ended in a relatively OK thing, right? same. And greg, go off to do something.

They bring some open ie people with them opening ee hires a new CEO. Everybody moves on. The third lives like that.

There's a version of this where like a lot of people had a lot of feelings, but IT turns into a relatively Normal corporate change, right? But that is obviously not what happened, right? The .

negotiation to bring same element back is failed. Myra, I continues, is interm CEO. Microsoft wishes same the best and says, I will support them in the new venture right again.

The the thing that needed to happen by monday morning was a microsoft statement to the market. Any religious cannot underestimate how much pressure that what that was applying to the situation. Yeah so we are expecting that statement, right? Like here's the forcing function we just have to be ready for this deal is going to fall apart.

Microsoft is gone to issue some holding statement and say, you know we have a deal with open eye, everything is fine, or contracts or rock solid brad smith, or chief legal officers, a great lawyer, like whatever microsoft is going to say to calm everybody down. But instead, in all credits of bloomberg, bloomberg has a report, know, ten minutes before the thing actually happens, that memorall I has hashed the plan is interm CEO to just rehire salmon, greg as employees while the board is out calling people to interview them to be the CEO to a place mirror. And so what comes out in the end, we'll just like fast water little bit, is mirs plan was to quickly hire samon greg as employees, again, forcing the board to fire all three of them, which would have had to presumably last you like.

Who knows what was going to happen in that moment, but that was the last swing of chaos when I was, I think, obvious. Oh, this just fell apart. Like IT, we're not in a place where we're negotiating four people resigning. We're in a place where we are actively trying to create legal leverage for a lawsuit to come and the board is actively trying to replace the person that they just hired to replace the CEO they find.

Sorry, it's just it's I know it's just like this whole thing has been such a blur for any I like when you sail this out loud, it's just truly it's insane.

And I just seem like I think you're in thing there is right now, it's at that point, what you're saying is i'm not going to quit. You have to fire me. Yeah like i'm i'm going to cause so much trouble for you that you are going to have to get rid of me and then i'm going to have A M O, kind of in whatever .

direction I want to use IT, yes, exactly. The rehiring of Simon, greg is like a deeply funny idea. Like here's to fire them again.

just like hire them is in turns and to watch them get fired yeah.

and all three of them will then see the board. And this is when alex, I just started sending out hundreds of text messages. This is about to fall apart. Like, this is absolutely about to fall part and IT IT fell part and IT fell part in the weird dest way possible, which is the board just I didn't even announce, no, the information broke.

Yeah this is just like coming from sources like the board has been in a bunker somewhere. They don't have a crisis comes team. They don't have like people speaking to the media. They've been radio silent but IT starts to trickle out that we've actually named a new CEO uh and it's in its sheer not on my bingo .

card for who was going to be the next city of OpenAI.

not on anyone's bingo card. I think it's very safe to call this one out of left field. Um emit was the cofounder of witch which is a live streaming video site.

Um not an A I company. He's not seen as A A I leader. He posted a shortly after the leaks that he was being named CEO, that he got the call for the job that day and took a few hours to decide.

And you, he's a free agent. He left twitch earlier this year before mass layoff. S, they've had two rounds of layoffs.

Ince, uh, I can confidently say that the vibe within amazon is that twitch has been A A, how shall I put this? Uh, show? T IT. And so, uh, no one really thought of limit, uh, except the board. Apparently he is now the CEO. And he sent this note internally to employees saying that he was going to conduct an independent review of the boards actions, which is hilarious because he was hired by the board. 呃， i don't think that's possible, uh, to have an independent review when you are the person you're a representative, the people that you're reviewing, I mean, he just doesn't make sense.

And also those people can callest ly fire you whenever ver they want, which they would ve been twice in forty eight years that they can do. okay.

And we've been dancing around this this whole time. I really think at this point we should just say who these people are because at the end of the day, three people settle this in motion. Three people have caused OpenAI to explode from within.

So should we just get into that? Yeah, yeah. okay. So opening eye is very strange and how it's structured. And this is something that people haven't really been paying attention to because we've been so focused on just the success of their products with ChatGPT. But open a eye started as a nonprofit.

And so IT has this word structure where there's a nonprofit, there's a flow chart, which is like perfect decoder as a flow chart on opening s website. And I I chAllenge you to look at this flow chart and try to make sense of IT. IT is one of the most confusing.

I just wanted be very clear, you can definitely s of IT and they would drawn IT to be more confusing than .

IT actually is OK. Well, that is one percenters. We're going to redraw the flow chart now because it's all different.

Um so there's this nonprofit with this board that controls IT. And importantly, the board of OpenAI does not have equity in OpenAI, which is a really wild thing. And so that's the context of the board.

There's three of them really that aren't open I people. So one of them is adam d. Angelo who is the seal corp.

He Operates, I should note, a competing A I chat bop platform called pole. He was the original co facebook. He he's a known quantity and silicon valley, he's a really well connected guide.

There is a woman named Helen toner who has tied to the effect of altera movement. SHE used to work at open philanthropy. She's now George town.

SHE funds A I safety stuff. SHE was actually on our stage at code in september with casey nude and talking about A I safety. And then the other one is a woman named tosha, my college, who is the formal cy of G O M systems.

And far I can tell basically no. An in tech that I know. no. So he is okay. So that's the three people and they're the ones who basically decided to bring him at because as we find out the next turn of the story, the guy that we thought was there, the architect, the master mind of all of this flipped, which we can get into.

Yeah, so and it's a weird choice.

and it's a weird choice. And also openly a deceleration ist, which is a rase that the AI can low, is like there's a videos of him being like, this is terrifying. We should swallow IT down.

This will extinguished all value in the cone of light, which is the real thing. He says, oh, it's amazing. Like and his point of view is we should slow A I innovation way down before be.

So king, get a handle on how dangerous this is so you can see where the board is, right? This is a what that we've been hearing about the entire time. open. I is playing with dangerous toys, and sam is running too fast. So we brought an image here to slow this whole thing way down.

Yeah, I think. And then on the flip side, very early this morning, the I I think to your point correctly, to get something out before the stock markets opened, microsoft announced IT has higher same altman and greg gman to run. I believe the phrases in A I research lab and advanced .

A I research team is a statement. And can I just read the statement from such in a dollar, please do, which just contains magnitude ods. We remain committed to our partnership with the open eye of confidence in our product grade map, our ability to continue to innovate with everything we've not in microphases night and in continuous for customers and partners.

We look forward to getting to know, eat sheer and oai s new leadership team and working with them. And we are extremely excited to share the news that same out and greg rock man, together with colleagues, will be joining microsoft ally to new advanced research team. We look forward to moving quickly to provide them with the resources needed for their .

success in the jurors and business.

We call that bearing the lead in. Importantly, the motor is being given the title of CEO at microsoft, which is inside microsoft corporate politics like a big deal, right? There are not a lot of ceos.

Microsoft, usually, when they acquire a big company that give those people to see a title to the person who leads linton as a seo title, the personally github has A C. R. title.

Fuel sensor is now the city of microsoft gaming. That's a big deal. You can go into that decode up. So where I ask him what that that title shift means.

IT basically means he has his own resources, right? He split off from microsoft, your own po pison IT basically means you, your own resources and you are more of a free agent to run your little division like it's a little company. So this is the arrangement sam is getting.

What I will tell you is I read this statement especially that we look forward to getting to know that matter. They don't know, they don't know these people. They don't know what's going to happen with OpenAIr. They don't know if i'm gonna turn th Epace o f i nnovation w ay d own. But they are able to tell the market, hey, the face of the A I winning that we've been doing as microsoft and now works at microsoft, does same element have a contract to work a microsoft yet?

Like, I don't know so much, the sam altman in the guy used to run White commentor who has his hands and every start up in the universe has multiple investment funds, is thinks of himself as the guy. He was running the hottest AI start up in the world on its way to making agi. Does he want to be a microsoft employee? I guy truly do not know the answer to that question.

I do know that this statement uteri worked to not only calm the market, but to send microsoft stocks skyrocketing. And we are now sitting here at saying, do we need to print? Microsoft is now three trillion dollar company because the stock, as we are speaking, is like to the mood.

So this statement worked. I'm just cautioning everyone. This, in my view, is a holding is still a holding statement.

Well, I think knowing what we know about sunday, knowing that microsoft really wanted to have this button ed up by markets open, this was decided like I was like, almost like when I am pacific.

Yeah, I was asleep. Like straight up us.

Like i'm done now i'm thinking that like, okay, the surely nothing more to come and then like around one adult and luckily y tomorrow and is waking up and and gets IT on the site. It's not but but I think there's an important thing here, which is we know that microsoft wanted to get this done. I have to imagine that whatever got sam and greg to agree to go to microsoft was a lot.

I imagine they had all the leverage in that situation because they'll just go do their own thing, right? Like we've all been saying, microsoft cannot make IT look like the the company that they have literally bet their AI azure future on is empty before they are very eyes again. So I have to imagine this is going to go down as one of the best packages ever from a big tech company to to a team to come there because they had all the leverage that night.

I agree. So this just like this, brings us to winners and losers.

We, we're.

we're there's one more term, but we're going to get to but first, we're going to take a break. We'll be right back.

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All right, we're back, and we are back with the last and current turn of the story, which is a letter. So much of this all is just happening. People writing texts to each other IT makes me very happy. I, since you are, quote, reader for the day you want read part of this letter, it's truly spectacular from a bunch of OpenAI employees. They wrote an open letter to the board.

Keep in mind, this all starts with know a five P M. Deadline, which is there's going be mass resignations and less sam comes back, they blown the deadline twice and same has now announced to go to microsoft.

The markets think microsoft has conducted a uh, the greatest stack will higher in tech history, no regulatory oversight like I have a version of that idea from like five thousand people in my text message box like such genius okay, no one is counting on is like old people still want to do the plan, right? You like if you say you either hire sam or we all resign, a lot of people are going na try to resign when you don't hire sam back. So five hundred plus employees out with seven hundred employees yeah.

it's at me by the time the city comes out, little people of than the whole company.

The letter says we, the understand, may choose to resign from OpenAI, enjoying the newly anounced microsoft of city run by sam and greg brock. man. Microsoft has assured us that there are positions for all open I employees at this new subsidy issue we choose to join.

We will take this step imminently unless all current board members resigned and the board appoints two new lead independent directors such as a bret Taylor and wheeler erd and reinstate sam altman and greg brock. Man, importantly, area has signed this letter and he has witted. I deeply regret my participation in the board's actions.

I never intended to harm opening. I love everything we got together, and I will do everything I can to read at the company mira has on the sledge and sam is now, quote eated ellia with three heart emerges, which I just saying this. I want to point out we are talking about ten e billion dollars in sure older value is happening with heart emogene on twitter.

It's it's the most e mail thing. I've listened to a letter to release like ten times this weekend because because when I was in college, I would just use the lyric to letter to, at least by the is my aim away message. That's where we are emotionally with this situation.

This means the board might succumb this pressure campaign because they are going to lose their entire company. All these employees are are tween opening eyes and nothing without its people. The board might to come.

They might reinstate m this whole sam is now the CEO of a microsoft research. Shame might not come to pass. I truly do not know what happens next. And that's what I mean by microsoft needed some clarity and they got IT today in a move which maybe seems like an a genius, but also may have just created enough stability for the next chapter to play out.

So alex, there are two things in here that jump out to me that I really cares about. One, this means microsoft has made very clear, very loudly, that anyone who wants to sleep OpenAI can go work for microsoft, which is a pretty ruthless thing to do to a company that you've been saying. We, you know, are committed to our partnership and look forward to get to the new leadership team.

And the other thing is, this is the final form of the kind of the board against the world thing. This is not quote, tweet and heart aog es. This is literally the vast majority of the company saying, in no uncertain terms, we will leave unless you do this.

I'm always of the mind. That is one thing to make big noises about putting your job is another thing entirely to quit your job. This does feel like the board is going to have to call a lot of bluff and in a way that is probably going to lose.

And yeah, I mean, what I was hearing over the weekend is that ellia is really the wild card here. He has a lot of but internally, he's a cofounder. He runs the research teams.

The fact that he flipped and is now saying i'm also gonna to microsoft means there really is no OpenAI anymore ah because that was always the key man is like if alias still there, they're still a chance that they're not going to be this like break neck commercial entity that they have been under almon. But they at least will do leading research because the research community respects him if he is gone. IT is literally adam d. Angelo tosh mccoy and Helen toner, those people are onna be all that's left of OpenAI.

Yeah, he was kind of the truest believer, right? Like if you want to to pick somebody who was like the most held on to the original vision of OpenAI, you probably pick right.

So the atlantic has this incredible and debt story about OpenAI that everyone who's listening to this should go read. And there is a scene um where they had a leadership offside. I think IT was last year and ella has a wooden effigy that he literally sets on fire at the meeting to represent non aligned a, which is this is like the idea that they're creating agi in a safe way.

I mean, it's kind of a religious thing in more ways than I think people get in the AI community. But yeah, that's that's I think for you if you want to. And kind of the cultural divide, which is maybe where we go next year, but like the culture divide with an open eye, has become somewhat religious in the last year. So as the company has become commercialized.

I told alex that a real have one we should get up for this is the rich people are crazy because this is religious. Further, now, these are people who believe that they are going to create the power to destroy the universe. And that is how they talk about IT.

It's not like a imposition of class warfare on billionaire. It's no you should listen to the billionaire talk and you should listen to what they call effective acceleration and deceleration. And there is a schism there that is beyond cultural right.

IT is reached a level of religious further that is making them act irrationally and that might be appropriate. Like if you thought that the thing you were building could destroy the world, you should probably reached into some like principles that are not just made up, which is like how you find religion IT. But that's like there's no moderating force on that, right? There's not like centuries of church dogma or literally like whatever.

There's some foreign sts about effective excitation ism. They're all reading that they've just made up and like that's weird and it's it's worth some scrutiny side of this sort of the room or chart battles that you know, that's where I like to focus my attention. But there's something here that is making these people act irrationally and with not just like religious further, but with like marter dum server, like they will kill the company because they believe this is so right.

right? And what's great about this story is that this tension is actually personified in the art chart. So going back to how ridiculous IT is that, the way that open is structured, they have this nonprofit board that controls the company effectively.

They can fire people acedera. They get to decide when the company has reached agi, which is a very important a power to place in a company. That whole mission is around creating A G.

I. And so you have that one side of the equation. And on the other side, you have the four profit entity.

The open I created, understand multa to raise all of the money for microsoft, hire all of the top talent from all of the big tech companies that they have in the last year to build wildly successful commercial products. And sam Allen is on stage at dev day. I was there a couple weeks ago saying we are going to be the APP store for A I.

We are going to start sharing our revenue with you. We are going to give more of our technology to our developers. We are going to be a platform.

So inherent in the structure is this tension where the commercial entity is charging ahead with something that the board is tasked with protecting and are ultimately deciding. And instance of drive behavior here. And so it's just really interesting to look at like maybe this was always going to happen. The favorite theory i've heard over the weekend was like, this is actually elon musk poison chAlice. Because he named OpenAI, he really set us up a, gave IT its first donation, set up the non profit structure, and maybe this was always going to happen well.

And then IT, importantly, stopped giving that money when he stopped being part of the company was a big part of, like samford reporting from willig, a right that was part of when OpenAI realized we need a lot more money to do kinds of things we are doing. They went to a microsoft to get both the captain in the computer to do IT. And all of the sudden you're just to the races.

And as soon as you decide you want the money, IT becomes very hard to not want the money anymore. That's one of things we've seen over, over. And like this idea that you can have a nonprofit overseeing a for profit company is not unheard of intact.

It's fairly unusual. But like mozilla is a version of this kind of ork tart signal, is a version of this kind of or chart like it's possible to do. But IT comes with a really complicated set of tradeoffs in every case, like mozilla's thing.

And nei, I know uni talk to mitrovica, the city of mozilla, about this mozilla for profit company gets most of its money from google, which too mozilla than non profit. That wants to make the internet Better, feels really bad, but without that, money can do the work anymore. And so this this tension is never going to stop going away.

而 this function is never going to go away。 And so you eventually need somebody in charge was either so mission driven that they stay that way no matter what, or you get into the same open thing where you eventually started chasing the money and then the money gets begin. That's what you become.

So I said this earlier, and i'm not going to try to describe in our chart on a radio show, but IT is very true that the flow chart that opening has published about its otherness structure is like consciously more complicated than that needs to be. There is only three boxes on the structure. Most of the extra boxes are just labelling who owns what.

So there is open eye, the public charity of five o one c three that owns a holding company which co owns OpenAI, the commercial entity with microsoft. That's that's a whole structure of this thing. There is a there is a charity that owns a holding company so that employees can have some equity in the on the holding company.

And then there is the commercial thing that goes off and does all the work that structure exists all over the place. IT does not exist in silicate ley outside of muslim. And these other things that are, are run as you they should like, not capitalists in their way, right?

So everything is like a delaware organize c corp. With VC is on the board and now all over the place, super voting shares for founders, like there's a way to do IT. And they do that because this stuff happens when you don't like.

like.

that's why they do IT. right? Like founder drama with their vcs, like the story of uber exists, right? The story of apple exists.

Like, you know, every single year met a shareholders vote to remove market super, and he just outvote them because he's super voting shares, like he just doesn't matter that the shareholders of matter or I get this guy out here year after year because he is super voting shares, right? So you get a structure like this in these genetics become possible. But then you look around the world and you see functional structures like this at very big companies, at very important companies.

Someone pointed out to me that bosh, which is a huge german engineering, from very successful in the car world, in the engineering world, these organised basically like this. There are companies are earned by the towns there in in your replay. All these other structure exist in this word chart.

People look at IT, and you look at IT. Like this is crazy if you just spend a few seconds looking at what these boxes mean. And I don't know why some of them are oval s and some of them are always like it's just three boxes yeah right.

At the end of the day, there is OpenAI, the charity that owns the holding company that owns OpenAI global, which is the commercial entity. And microsoft is a big investor in that entity. And that means microsoft does not have a lot of control over this board, which I think has become a real problem for microsoft.

This one in time IT means that sam altman en did not have super voting shares to stop IT. But IT also, in very importantly, means the board was too small and too inexperience, made a hasty decision and there was no governance check on their behavior. And I think that is like the fundamental mistake of the structure, not the structure itself.

Or we find out that I don't think this is the case, but I just want to play devils advocate or we find out that like OpenAI god, in the last two weeks, there's a clip of sam multa at a conference and conference to go the day before he was fired, saying that like there's been a few moments in his career where there's ve gotten to push back the veil of ignorance and like he was talking as if, like you know, they had made fire and he said one of these moments happened in the last couple of weeks everyone is reposting that clip saying, what if they realized they had agi or what if they realized the model was about to just accelerate in a way that no one could have predicted? I will say that ellia has been doing a press tour and being pretty open that the model capability is going to progress a lot faster than everyone thinks.

So their husbands, you know, a lot of theory to that. But what IT looks like right now is, is an experience and the board not realizing what was going to happen when they made such rash decision. I just one .

point this out there. The other thing I ve heard is it's not that microsoft, the commercial entity of OpenAI eye and sam, we didn't think safety was a problem. Kevin Scott, the head of a microchip, was on stage with me at code.

And we talked about A I safety and the limits and like how careful they should be. This is a thing that microsoft is publicly talking about. So open the eyes board is saying, okay, we're going too far ahead.

Their entire job is communicating that there's a misaligned. Their entire job is saying to sam, hey, you're over the line like pull that back or we're going to fire you. Instead, they just fired him.

Instead, they just went ahead. They gave a microsoft one minute notice that are going to fire them. And so like the fundamental job of the board is to communicate and set limits and they just didn't do IT yeah well.

so and this is a another good moment to put a button on what you said earlier, new life, which is that we actually don't know the whole story behind why he was fired in the first place and and IT sheer in his weird long tweet announcing that he is CEO at the very end, says pps, before I sook the job, I checker on the reasoning behind the change. The board did not remove them over any specific disagreement on safety.

The reasoning was completely different from that. Are not crazy enough to take this job without board support for commercializing our awesome models. So before that, i'm like OK OpenAI want to go back to being essentially a researcher organization. Fine, like whatever you want to say about that decision, that is at least a decision.

Now it's like, okay, well, what we what are we doing here? What what fighter we having here? It's i'm sure there are people who know, but that part does not seem to have come out in any way that I find at all sort of satisfying.

What I think we will find out is that this is a classic business dispute. I mean, yes, there are obvious concerns on different sides of the debate here about AI safety. And I do think that played a but what we just saw was a couple of weeks ago, OpenAI hastily.

And I can say this confining because I was part of the the press gram and getting premium ed in all this about the the APP store stuff like very hastily open. A ee announced a major business expansion that sam mult man LED, right? They had this huge conference and we're like we are pushing ahead.

We're going to be a new platform. And if I had to guess that probably LED to a lot of this because same was clearly caught by surprise, there was nothing. Normally, if this had been like a long just ticul ating thing over months, I would have leaked in dbs s and drug's and IT really just came like a thick in the night.

And so there was a breaking point here very recently. And the thing I can point to is sam getting on stage and saying, guess what? We've been going one hundred miles an hour. We're going to go two hundred miles an hour and we gonna become an even bigger business.

And what seems clear now is that a bunch of people with microsoft, including exciting, and I saw that and said, helium and at least one person inside of OpenAI said, hell, no, yeah. I mean.

this is like, essentially this is capitalism versus hippies. I mean, that's what the story is.

the story of silicon valley. And yeah, I think that's reductive. Again, the religious aspect of this is just not to be underestimated.

Microsoft season and says, yeah, go even faster because every one of these queries runs on an azure server, right, right? That that's great for them. They're ready to go.

The opening up board sees this and says, okay, you're gna give people the ability to make computers go, take actions in the real world without any oversight and let them build whatever A I tools on our model that they want and resell them and create a commercial incentive to do that without any safety checks whatsoever. And that is opposed to our mission that is like real. That is a moral dilema.

Do you remember? I mean, we were just talking about this on the verge cast. We were talking about how the store and these, this asian A P I thing is gonna en them up to a world of hurt. I mean, they literally had to say, on stage, we will demonize y you for any copyright violation that may occur from creating bots on our platform.

IT was very unlike I went to A Q A with sam after they announced this a dev day and I was clear that they had not thought through the details, right, like they they hadn't decided on how much revenue they were going to share with creators, how the store incentives we're going to be aligned. IT was all just being done kind of on the fly and we were all going like this sounds like a disaster, like it's a smart business play if you are sam altman, the venture capitalist, right? It's like, yes, this is what you want to go.

Do you want to build a moat around, you know, the fastest growing consumer product of all time? You want to be a platform. But IT was clear that they .

were moving a million miles a minute. Also, the problems are not hard to imagine. Okay, uh, creator sets up a GPT bot that just spams people in their email with marketing messages. This is, open a eye. Want to be sharing revenue with that creator.

Is that a thing you want to incentivized? You make IT even worse is connected to dolly, right? okay? You want to make deep fake nudes of people, and that's a APP you want to sell in a GPT store does open. I have the content moderately ability to stop IT at scale when millions of people realize this is the thing they .

should try to sell. Like the most wild thing I heard at dev day was that opening I users GPT to moderate GPT. IT uses the AI to moderate the AI. And that's how they were and that's and that's how they were going to approach the store. I know it's it's truly bit at us.

yeah. So I think there's a lot still to sort out here, right? I think including the question of like does sam altman actually ever work for microsoft? And I think we're going to talk about that's a lot for a long time, I suspect.

But just let's just put a button on this moment for now, because if we stay on here too long, more news' break in this, all of the attitudes we need to like, put this thing on the internet just five minutes. I wanted do a quick who won and who lost over the last four days and they're i'm just going to throw some names to you and you guys going to tell me winners and losers. So person one, sin della, I feel like a big winter, the weekend.

right?

He might be the only winter OK. Everyone thinks he looks very clever today. I do not know long term if having your stock Price swing this much on the actions of one or two people is a good thing for action at all.

fair. Ah, okay, person number two, same altman, I genuine can't decide.

Loser, huge, huge loser, really. Yes, was loser. He was the guy, and now he he might still be.

He might started a new company. He might go work for microsoft. You might take everyone with him, but losing the thing you founded is the worst. And IT might be that he returns to open the eye in twelve years like sea job, but in the meantime, the most likely outcome is he .

owns next is this is elon musk style joker origin story? Like, is that?

Yeah, I don't there's no I come back to the very big inning. It's great to think that are all these people are are cogs in the machine and it's a narrative that's playing out. And it's a like, you know, people write about IT that way.

Somehow we write about that way. These are people, you know, and like, whatever he doesn't ask is going to be deeply colored by just the emotional damage of this weekend in the sense that he can't trust the people he thought he could trust. And maybe that's just the reality of being the guy and why combatant for a time maybe was already like that.

He's been in the scene for a long time, you know, a lot of people. But to go from the top of the world to microsoft employee in forty eight hours, no matter what happens the next, he is not the winner. today.

I think he is more a winter than nei, but I don't think he's a full winter. I mean, I think like sam, like I was saying, looks like he had all the leverage of microsoft. Microsoft needed a way to message that this was under control. I imagine he extracted some insane deal terms out of nadella late last. And if he does get the entire open, our team to come to microsoft and he gets to run IT like his own little freedom, like linton has its own email, like his own building own.

Do you think he gets his good meat?

That's well, maybe know that may have been. The biggest concession of all was that nadella agreed that they don't have to use teams internally. We will find that out.

I'm sure tom is on that. But I mean, i'm thinking to why they created the commercial entity IT was because they needed funding for compute to train their models. And microsoft showed up with the bag mostly of cloud credits, interestingly saying, we will give you all the computer you need.

Microsoft has gone on what i've seen some analysts saying is the most expensive in for a private company, in for a build out of all time with its A I data centers, something like fifty plus billion dollars in the last few years. So if some sam gets the installation of being an independent company within a mega cap company and all of the resources that he was desperately trying to raise money for, for the last few years anyway, and all the people from the company, I mean, IT seems like he wins. I mean like he seems like a winner to me. Certainly this is like for his like, yeah trusting people. Uh, not great, but I think he's moral winter than you like.

right? I I have a bunch more, but I actually think I think your almost them are pretty easy OpenAI obvious. Loser google, when are a loser?

Google is the most indicated of any company right now, right? They got so much heat for being slow and not rushing the stuff to a market. And now they're vindicated because open the eye itself just tore itself apart over the idea of going a little bit slower.

And microsoft, which is recall nadel on decoder, I want to make google dance. I want them to know there was me. You made the dance incredible quote, is now having to start a new division, set IT up, given research funding, while navigating meeting.

And my sheer, which is literally in a statement, they have to meet this guy like if you're google, you're like, wow, we were right to go slowly and carefully in our moment will come to us also, we have Better distribution for A I search products and about in history like maybe we'll just continue to stimulate the industry. I don't know that's going to happen. I don't know google can actually execute out many, many questions. But if you are synaptic rise today, you're like you miss that one. You like you're just fine.

I think that I think this is the most like aggressive range of instability into its biggest competitor that google could have possible hope for. Boards still sucks. So there's that anthropic. Alex, you ve brought this up earlier, is the team of the anthropic just like giggling and high five ving right now?

I mean, yeah, anthropic was created for a similar reason. I don't know there was a coup that was failed, and that's why anthropic got form. But they all worked at OpenAI.

They had they were the kind of more desAlination as effective ultras of, you know, movement. They broke off as a separate faction, created another AI lab. And they haven't had the commercial success of OpenAI.

I think it's worth noting that the only A I start up that has been successful commercially is OpenAI. Like there's clod, there's all these chat bots like their usage pales in comparison. So yeah, I think they are winning because of the instability, like maybe there will be a lot to hire some of these people. But I really think everyone lost here, except in the short term, the del and sam altman.

I really do in a short term, every microsoft, mpl, yees. Then he went selling .

or stocked to my house. Yeah, i've seen multiple sweet ts of just the screen shot of the stocks Price saying.

thank you all those people. yeah. Did anybody else when I remains to be seen first?

Okay, last one. And then we to get out here ChatGPT. Is this the end of the ChatGPT era?

As IT is even the end of the story, I okay.

fair if we played this out in what seems like the most likely scenario right now, which is that OpenAI becomes significantly new. Capt, in some meaningful way. IT seems unlikely to me that all of the stuff that we saw two weeks ago at dev day comes out the way that we we thought I was going to IT seems possible that this organization ation, goes back to being more the research organization and ChatGPT, the fastest growing consumer internet product in history, becomes a sideshow for this company again.

I mean, if there's no one there to Operate. IT, yeah certain. I think that's where we are right now, is like there may not be an OpenAI by the end of the week, right? Yeah like ChatGPT probably over which is wild, but like they'll just recreated inside microsoft and and I will all be as cool and IT won't be as like you breakneck and you know move fast, break things.

Microsoft is like regulated monopoly. They're going to move very slow and thought fully unlike how this is rolled out because they have to, right? So yeah, I do think this Marks this decidedly Marks the move fast break things era of general a day. I I would think that's pretty safe to say.

Thanks without question. The like craziest rise and fall of a APP I can think of microsoft kes IT.

Like I do not know what that happened. sex. Like we're going we're going to end this podcast and i'm going to think about the you're tra a bit more.

And by the time i'm done looking at the boxes, everything might be different. And I think that is again, the weird outcome of all of this is we still don't know. It's been we might beyond the six ceos of OpenAI by the end of this week, at the rate we're going.

each one of the board members is is going to become the C. O, until there is only one of them left.

IT is not. And IT is, uh, I think, one of the most riveting corporate dramas of our time. IT is also just Frankly.

one of the sattin. Yeah right. I think we're done here. Na you you want to take us out .

that that's a very chest that was also decoder. We love hearing what you think of our shows. You can send us emails at version test of verge ecod or decoder the verge icm.

We read them all. You can follow us all in threads where we broke a lot of news this weekend. Sign of the time for threats I will say, uh, although mostly action was still happening at X, A lot of IT happened on threats. And very importantly, you can subscribe to alex s newsletter, command line, which I am one hundred percent confident without having as alex first is going to be full of scooped about what's happening in opening ee for the next five hundred weeks to come.

I hope so. I I sure do.

然后。

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Our show is produced by Andrew marino and leon James. That's IT. We'll see you next week.

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