The Six Five team discusses OpenAI revolving door of founders & executives.
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Transcript:
Daniel Newman: Let’s talk about the toxic cesspool that is also one of the most innovative world-changing organizations, and that is OpenAI. Pat, I’ll start here, but what is going on at OpenAI? Now, Greg Brockman is leaving. You’ve seen, and he’s just one of three more senior leaders. You have John Schulman, he’s another, so two co-founders. One, Brockman is taking a leave of absence. You watch that? Leave of absence. Okay, just making sure that everybody sees that. Some people listen to the podcast. I just did quotations in case anybody didn’t see that. John Schulman, another co-founder. He’s heading to Anthropic. He’s heading to a competitor. Peter Deng, their product leader, one of their very most senior product builders is leaving.
Pat, I can’t help but think that this company has major toxicity. When this news came out, all I’m going to say is, whether it’s been … Say I’m wanting to take on Microsoft, I know he doesn’t, but he does. But he doesn’t. But he does. He’s definitely the person that funded. By the way, Pat, we didn’t talk about the billion dollar opportunity Intel had to take 30% of OpenAI. We’ll do that another time. It was, remember the coup that took place, the supposed coup, and everybody got really defensive of Sam, because he’s the genius, the founder. But you start to wonder, as you’ve seen this trickle out the door of all, and by the way, this is the third wave of sort of very influential people that have come and gone from here. You’re seeing Microsoft taking a more defensive posture, naming OpenAI as a competitor, despite the fact they basically are the largest investor and own almost half the company.
I just think there’s something going on inside. And of course, they’re not going to tell us what this is, but it seems to me that Sam has a very interesting approach that scares the crap out of people. The board that wanted to put them out. I don’t know if this is AGI-related. They’re getting closer and it’s a concern about how he might put it to use. I don’t know if it’s his desire to take on the entire chip industry and take out NVIDIA and fab all the world’s chips and manufacture them. I don’t know if it’s just some sort of other tyrannical leadership style that is not being well communicated. Pat, we had the recent thing about all the people’s deals, all their stock deals being messed with and the company trying to change terms on the deals. There was a whole shenanigan with that. But Pat, look, this is all speculation here, but something inside that company is sick. There’s something going on inside of this company to have the coolest technology on the planet, just absolute breakthrough stuff. But whether it’s the stealing of data, that whole interview that their CTO did where she notably couldn’t answer on camera, but absolutely got bedazzled, bedoozled on camera, whether it’s been this coming and going of its leaders, whether it’s been the outing of him as the CEO, whether it’s been these stock deals that got messed with and people’s disclosures that they couldn’t talk and the gag orders. What is going on inside this company? I don’t know Pat, but it’s ill, it’s ill.
Patrick Moorhead: I don’t know. And I don’t know if I care and I don’t like topics like this.
Daniel Newman: Oh, come on. Was this all my fault? I didn’t even put it on the list.
Patrick Moorhead: Huh?
Daniel Newman: I didn’t even put it on the list. You picked it.
Patrick Moorhead: Here’s where we’re at. I mean, I feel like the open source competitors are getting close enough to OpenAI capability for it to be a gigantic threat. And thanks for flashing that. Now-
Daniel Newman: I really distract you, I distract you.
Patrick Moorhead: But I think it could also be that everybody knows what’s going on inside and they look at the competitive threat and OpenAI is closed. It is a closed model, and this could be the beginning of the end potentially for OpenAI if there’s a brain drain. Because that’s all I care about. I care about architects and I care about developers. It has been a long time since that gigantic 40 and multimodal came out. I was mistaken to think that they had gotten those actually out and made it usable. Is that thing ever coming out? Could be an execution issue. This stuff just doesn’t work like they showed it. That is a potential here. But what I see is open source and closed source narrowing in right now and OpenAI has to do something and stay ahead, otherwise they’re going to rolled over by the open source folks. I don’t think Gemini is a risk at this point, just given the horrible types of responses that have come. I mean, come on, Dan. I mean, when’s the last time you started your search on Gemini?
Daniel Newman: No, I agree. I’m only laughing, because every massively profitable company in the planet is closed. It just has something that’s super closed and very proprietary. But having said that, like I told you earlier, I’m seeing things being built with open that are very powerful. And so, you’ve got this conflicting thing. But Pat, I’m going to actually say that Apple’s culture is all about closed. Microsoft has lots of closed architectures inside of in systems, and it has made a lot of money by that. Google, by the way, has always had a bit more of an open lineage, but definitely has some proprietariness and things like its algorithms that have made it incredibly powerful. I just mean OpenAI. Yes, it has been the antithesis of open, but my gosh, what a market advantage? Why would you run away if you’re a founder? And unless, I don’t think it’s, I just … I get it.
Patrick Moorhead: You are running away with some value, right? Let’s say-
Daniel Newman: Of course.
Patrick Moorhead: … your vest was four years and you stuck around for two and you’re just like, “This place is hell.”
Daniel Newman: That’s all I’m saying.
Patrick Moorhead: Yeah. I can’t work here and I am out right. Exactly go from doing open AI potential hellscape into, “Oh, I’m going to go retire.” These people are winding up at other 16-hour day shops, Morgan Stanley intern type of territory here. And so it’s not, I don’t think it’s necessarily that, there has to be something with the competitive front. Because these people jumped in. I got to tell you, I don’t think it’s for purpose. I think it’s to make a ton of cash and they would have stuck around. And if they thought that the valuation would’ve gone up astronomically and stuck, it could be hedging your bets. Hey-
Daniel Newman: They’re only going to lose 5 billion this year, from what I’m reading.
Patrick Moorhead: Yeah, I mean, Amazon lost billions too for a decade. And the market was okay with that. Heck, they even went public. I think it took them 10 years to make any money. You could fact-check me on that, but it was a long time.
Daniel Newman: Yeah, so I think we’re mostly in alignment. I just mean, I think there’s something toxic. I don’t know what it is.
Patrick Moorhead: What do you mean by toxic? Do you mean like-
Daniel Newman: I’ve studied back and culture for a long time, and I don’t think these execs are running away because they don’t believe in the tech. I think they’re running away because there’s something in the culture, there’s something about the way, the power struggle, the way the company’s evolving, the things it wants to invest in, the way it’s treated the people that helped build it. And it did start with a mission that was all about helping to democratize and bring this technology to the world. This group was not people that needed money. These people are financially, not all of them, but I’m talking about the people at the top of this org are financially well to do. The board had announced that they were very concerned about … All I’m saying, is that was a bit of a canary in the coal mine of what was about to come.
And now you’ve seen it happen the way employees have been treated. And these founders are leaving and then they’re being gagged and said, “Don’t talk about.” “Why? What are you not talking about?” And I’m not, again, not proprietary tech stuff. What’s going on inside the walls of the company that is created. And by the way, and you look at Satya and they’re building competitive products now and they’ve announced them as … There is a force of nature inside that company that wants to even take on those that have helped it become successful. Which again happens when companies get big enough. I’m just not sure they’re there yet when they’re still losing $5 billion a year. Who knows? It’s a fun topic, I know you don’t love them as much as I do. It’s all speculation.
Patrick Moorhead: You know what? I am going to talk at it. I actually liked that. That was fun. It’s so funny we’re talking about this company. It has a 100,000 employees or something. It has like 2,000 employees,
Daniel Newman: But it did change the world. They literally changed the world.
Patrick Moorhead: Yeah, no, totally. Yeah, they did. And by the way, the first smartphone was not Apple, right? The first PC was not HP. I mean, by the way, first PC was not Apple either. And historically, if you go look back, the people who started something did not own it. I mean, the first search engine was AltaVista. I worked for them. Nobody even knows what AltaVista is. It’s the name of a beer at this point. I mean, we started that. We started that market and it was DAC. It was DARPA. But history shows the first person who comes out with tech something is rarely the one that ends up leading it in the end. Zilog was the first PC processor, not Intel. Anyways, there is a trail-
Daniel Newman: Read the history of ARM, read the history of Acorn. And all I’m saying is, all these histories are fascinating. And by the way, Pat, you read history. I read history. I wish the world and most of the people read history. It would make the world such a better place.
Patrick Moorhead: I think it was lower stress levels too, like this, “Oh my gosh, what happened? And hey, back in 1960, this happened.” We tried it and it doesn’t mean we didn’t try it again, but let’s go back and realize why what we did in 1960 failed and what we can do to do that. The fall of civilization, Greece, Rome, and all of the precursors that led to their demise. Look at Western Europe and just how amazing and the growth there. And now economically, they’re not a third-world region, but they’re second world.
Daniel Newman: They’ve fallen behind. And again, this is an interesting debate, a very 180 from just talking about the tech. But a significant policy change from capitalism has created a different type of construction population and of those particular societies. Very interesting, Pat, read history, everybody, it’s not all available on TikTok. You might need to find a library, but those are available online.
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.
