The Six Five team discusses OpenAI – Non-Profit to Profit.
If you are interested in watching the full episode you can check it out here.
Disclaimer: The Six Five Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we ask that you do not treat us as such.
Transcript:
Daniel Newman: OpenAI, Pat. Elon Musk went on the record and said, “If you change your name to ClosedAI, I’ll drop the suit.” What’s going on over there?
Patrick Moorhead: No, I know. So it’s a pretty interesting back and forth between the companies. Elon’s definitely going for it. And instead of Sam Altman responding, they have the first check writer to OpenAI, Vinod Khosla, aka, Khosla Ventures coming in to do the dirty work for Sam Altman and OpenAI. And it’s kind of funny watching Vinod talk about all this because, think about this, Dan, let me get your attention here just real quick. What VC invests in a company that’s not going to be for Profit? Zero. Do people think we’re this stupid?
Now you can set up a legal entity that’s very much a non-profit, and then you can have a related entity that is very much for profit. And that is what’s going on here. And so the conversation here is, is it profit or non-profit? Is it open or closed?Clearly, it is a for-profit. What is it worth? Its last money round was worth what? $30 billion, Dan? I mean, it’s completely crazy. We’re not that stupid, people.
And then second of all, is it open or not? And this idea of open, and Musk, by the way, was a co-founder of this, was, “Let’s leave it open so it doesn’t get into nefarious hands.” You distribute it, kind of like a distributed network back when music distribution was the way to do it. They were all ripping it off, but it was empowerment. And now OpenAI is very much closed. We don’t know what the models are, how they were trained, how they were parsed. One person might say, “Hey, that’s intellectual property. Shouldn’t share that.” But other companies, like IBM, have shared the entire process about how models are done. And that is, hence, open. So interesting dialogue back and forth. The memes alone are worth the price of admission.
Daniel Newman: Yeah, I kept flashing you the Musk memes, it was just too fun. That guy’s savage. I mean, just absolutely relentless. First of all, kudos to Microsoft for locking down. And when I mean locking down, I don’t know if that’s irony or if that’s actuality. But the biggest and most important relationship with OpenAI, which is the most reputed and lauded large language model and company building this type of technology on the planet. You see what they’re doing with Sora, you see what they’ve done with Dall-E. It’s not just ChatGPT. The stuff is incredible and it’s very innovative, and we know that there’s things in the lab that none of us have seen yet that are far more compelling. Of course, you’d want to tie that down in any way you can.
And you don’t become the world’s second most valuable company on the planet, or in this case now first, being Microsoft, by not seeing where the technology roadmap is going. Having said that, there’s this whole debate about ethos. The ethos of OpenAI. The reason it was created was to actually make sure it never was distributed in a way that any one particular company could monopolize it. And so the questions that Musk is asking, the questions he’s asking are substantial and legitimate and necessary. And we should be taking this with some level of seriousness as a society, and want to know how do we make sure that what’s being built here is going to be democratized in the way OpenAI’s vision set out?
And/or Musk’s other big concern is, as they flip, because OpenAI has many entities, I read the first page of the lawsuit, there was like 28 entities that were related, and they have for-profit business ventures, how do we make sure that’s governed to not create a very unique advantage to one company? So the non-for-profit status was used to build technology that basically one company then gets its hands on and is able to build unique intellectual property on top of, and build competitive moats in the marketplace versus everyone else.
These are questions that should be asked, need to be asked, need to be discussed. It’s good Musk is asking them. For his political ideology, certain people won’t take his concerns as serious as need to be, but they should be taken seriously. This is a very real topic. And we will see how this plays out. I compliment Microsoft because they made the right move, Pat.
Patrick Moorhead: Do you think Microsoft will put their head in or like, let’s stay away from this thing? If you remember, they were very active when the coup happened, right?
Daniel Newman: They had to be.
Patrick Moorhead: I know Satya is like, “Hey, we’ll hire all of you. Come on in.” He actually announced Altman as joining the AI team.
Daniel Newman: Well, protecting the investment. My point is, it’s kind like tax write-offs, Pat. This is why I have no issue what Microsoft’s doing. This is like tax write-offs. People are like, “Oh, you wrote off a car? How’d you do that?” It’s like, well, if the government’s going to give you the ability to do a tax write-off on something, you can’t be mad at people for taking advantage of that. If Microsoft’s going to allowed to use the not-for-profit technology to build a for-profit competitive advantage, I think that’s bright, that’s smart of them. So it’s going to be something to watch, and we’ll have to keep an eye on it.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
