Month: November 2023

The ousted leader of ChatGPT-maker OpenAI is returning to the company that fired him late last week, culminating a days-long power struggle that shocked the tech industry and brought attention to the conflicts around how to safely build artificial intelligence.

San Francisco-based OpenAI said in a statement late Tuesday, “We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new initial board.”

The board, which replaces the one that fired Altman on Friday, will be led by former Salesforce co-CEO Bret Taylor, who also chaired Twitter’s board before its takeover by Elon Musk last year. The other members will be former U.S. Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo.

OpenAI’s previous board of directors, which included D’Angelo, had refused to give specific reasons for why it fired Altman, leading to a weekend of internal conflict at the company and growing outside pressure from the startup’s investors.

The chaos also accentuated the differences between Altman — who’s become the face of generative AI’s rapid commercialization since ChatGPT’s arrival a year ago — and members of the company’s board who have expressed deep reservations about the safety risks posed by AI as it becomes more advanced.

Microsoft, which has invested billions of dollars in OpenAI and has rights to its current technology, quickly moved to hire Altman on Monday, as well as another co-founder and former president, Greg Brockman, who had quit in protest after Altman’s removal.

That emboldened a threatened exodus of nearly all of the startup’s 770 employees who signed a letter calling for the board’s resignation and Altman’s return.

One of the four board members who participated in Altman’s ouster, OpenAI co-founder and chief scientist Ilya Sutskever, later expressed regret and joined the call for the board’s resignation.

Microsoft in recent days had pledged to welcome all employees who wanted to follow Altman and Brockman to a new AI research unit at the software giant. Microsoft CEO Satya Nadella also made clear in a series of interviews Monday that he was still open to the possibility of Altman returning to OpenAI, so long as the startup’s governance problems are solved.

“We are encouraged by the changes to the OpenAI board,” Nadella posted on X late Tuesday. “We believe this is a first essential step on a path to more stable, well-informed, and effective governance.”

In his own post, Altman said that “with the new board and (with) Satya’s support, I’m looking forward to returning to OpenAI, and building on our strong partnership with (Microsoft).”

Co-founded by Altman as a nonprofit with a mission to safely build so-called artificial general intelligence that outperforms humans and benefits humanity, OpenAI later became a for-profit business but one still run by its nonprofit board of directors. It’s not clear yet if the board’s structure will change with its newly appointed members.

“We are collaborating to figure out the details,” OpenAI posted on X. “Thank you so much for your patience through this.”

Nadella said Brockman, who was OpenAI’s board chairman until Altman’s firing, will also have a key role to play in ensuring the group “continues to thrive and build on its mission.”

Hours earlier, Brockman returned to social media as if it were business as usual, touting a feature called ChatGPT Voice that was rolling out to users.

“Give it a try — totally changes the ChatGPT experience,” Brockman wrote, flagging a post from OpenAI’s main X account that featured a demonstration of the technology and playfully winking at recent turmoil.

“It’s been a long night for the team and we’re hungry. How many 16-inch pizzas should I order for 778 people?” the person asks, using the number of people who work at OpenAI. ChatGPT’s synthetic voice responded by recommending around 195 pizzas, ensuring everyone gets three slices.

As for OpenAI’s short-lived interim CEO Emmett Shear, the second interim CEO in the days since Altman’s ouster, he posted on X that he was “deeply pleased by this result, after ~72 very intense hours of work.”

“Coming into OpenAI, I wasn’t sure what the right path would be,” wrote Shear, the former head of Twitch. “This was the pathway that maximized safety alongside doing right by all stakeholders involved. I’m glad to have been a part of the solution.”
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The U.S. government dealt a massive blow to Binance, the world’s largest cryptocurrency exchange, which agreed to pay a roughly $4 billion settlement Tuesday as its founder and CEO Changpeng Zhao pleaded guilty to a felony related to his failure to prevent money laundering on the platform. 

Zhao stepped down as the company’s chief executive, and Binance admitted to violations of the Bank Secrecy Act and apparent violations of sanctions programs, including its failure to implement reporting programs for suspicious transactions. 

“Using new technology to break the law does not make you a disruptor, it makes you a criminal,” said U.S. Attorney General Merrick Garland, who called the settlement one of the largest corporate penalties in the nation’s history. 

As part of the settlement agreement, the U.S. Treasury said Binance will be subject to five years of monitoring and “significant compliance undertakings, including to ensure Binance’s complete exit from the United States.” Binance is a Cayman Islands limited liability company. 

The cryptocurrency industry has been marred by scandals and market meltdowns. 

Rival of FTX founder

Zhao was perhaps best known as the chief rival to Sam Bankman-Fried, the 31-year-old founder of FTX, which was the second-largest crypto exchange before it collapsed last November. Bankman-Fried was convicted earlier this month of fraud for stealing at least $10 billion from customers and investors. 

Zhao, meanwhile, pleaded guilty in a federal court in Seattle on Tuesday to one count of failure to maintain an effective anti-money-laundering program. 

Magistrate Judge Brian A. Tsuchida questioned Zhao to make sure he understood the plea agreement, saying at one point: “You knew you didn’t have controls in place.” 

“Yes, your honor,” he replied. 

Binance wrote in a statement that it made “misguided decisions” as it quickly grew to become the world’s biggest crypto exchange, and said the settlement acknowledges its “responsibility for historical, criminal compliance violations.” 

U.S. Treasury Secretary Janet Yellen said Binance processed transitions by illicit actors, “supporting activities from child sexual abuse to illegal narcotics, to terrorism, across more than 100,000 transactions.” 

Binance did not file a single suspicious activity report on those transactions, Yellen said, and the company allowed more than 1.5 million virtual currency trades that violated U.S. sanctions, including ones involving Hamas’ al-Qassam Brigades, al-Qaida and other criminals. 

The judge set Zhao’s sentencing for February 23, however it’s likely to be delayed. He faces a possible guideline sentence range of up to 18 months. 

One of his attorneys, Mark Bartlett, noted that Zhao had been aware of the investigation since December 2020, and surrendered willingly even though the United Arab Emirates — where Zhao lives — has no extradition treaty with the U.S. 

“He decided to come here and face the consequences,” Bartlett said. “He’s sitting here. He pled guilty.” 

Zhao, who is married and has young children in the UAE, promised he would return to the U.S. for sentencing if allowed to stay there in the meantime. 

“I want to take responsibility and close this chapter in my life,” Zhao said. “I want to come back. Otherwise I wouldn’t be here today.” 

Company sent investor assets to third party

Zhao previously faced allegations of diverting customer funds, concealing the fact that the company was commingling billions of dollars in investor assets and sending them to a third party that Zhao also owned. 

Over the summer, Binance was accused of operating as an unregistered securities exchange and violating a slew of U.S. securities laws in a lawsuit from regulators. That case was similar to practices uncovered after the collapse of FTX. 

Zhao and Bankman-Fried were originally friendly competitors in the industry, with Binance investing in FTX when Bankman-Fried launched the exchange in 2019. However, the relationship between the two deteriorated, culminating in Zhao announcing he was selling all of his cryptocurrency investments in FTX in early November 2022. FTX filed for bankruptcy a week later. 

At this trial and in later public statements, Bankman-Fried tried cast blame on Binance and Zhao for allegedly orchestrating a run on the bank at FTX. 

A jury found Bankman-Fried guilty of wire fraud and several other charges. He is expected to be sentenced in March, where he could face decades in prison. 
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More people work from home in Colorado, while Mississippi has the lowest percentage of teleworkers
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In a move that may soon be replicated elsewhere, the Gila River Indian Community recently signed an agreement with the U.S. Army Corps of Engineers to put solar panels over a stretch of irrigation canal on its land south of Phoenix.

It will be the first project of its kind in the United States to break ground, according to the tribe’s press release.

“This was a historic moment here for the community but also for the region and across Indian Country,” said Gila River Indian Community Governor Stephen Roe Lewis in a video published on X, formerly known as Twitter.

The first phase, set to be completed in 2025, will cover 1,000 feet of canal and generate one megawatt of electricity that the tribe will use to irrigate crops, including feed for livestock, cotton and grains.

The idea is simple: install solar panels over canals in sunny, water-scarce regions where they reduce evaporation and make renewable electricity.

“We’re proud to be leaders in water conservation, and this project is going to do just that,” Lewis said, noting the significance of a Native, sovereign, tribal nation leading on the technology.

A study by the University of California, Merced estimated that 63 billion gallons of water could be saved annually by covering California’s 4,000 miles of canals. More than 100 climate advocacy groups are advocating for just that.

Researchers believe that much of the installed solar canopies would additionally generate a significant amount of electricity.

UC Merced wants to hone its initial estimate and should soon have the chance. Not far away in California’s Central Valley, the Turlock Irrigation District and partner Solar AquaGrid plan to construct 1.6 miles (2.6 kilometers) of solar canopies over its canals beginning this spring and researchers will study the benefits.

Neither the Gila River Indian Community nor the Turlock Irrigation District are the first to implement this technology globally. Indian engineering firm Sun Edison inaugurated the first solar-covered canal in 2012 on one of the largest irrigation projects in the world in Gujarat state. Despite ambitious plans to cover 11,800 miles (19,000 kilometers) of canals, only a handful of small projects ever went up, and the engineering firm filed for bankruptcy.

High capital costs, clunky design and maintenance challenges were obstacles for widespread adoption, experts say.

But severe, prolonged drought in the western U.S. has centered water as a key political issue, heightening interest in technologies like cloud seeding and solar-covered canals as water managers grasp at any solution that might buoy reserves, even ones that haven’t been widely tested, or tested at all.

Still, the project is an important indicator of the tribe’s commitment to water conservation, said Heather Tanana, a visiting law professor at the University of California, Irvine and citizen of the Navajo Nation. Tribes hold the most senior water rights on the Colorado River, though many are still settling those rights in court.

“There’s so much fear about the tribes asserting their rights and if they do so, it’ll pull from someone else’s rights,” she said. The tribe leaving water in Lake Mead and putting federal dollars toward projects like solar canopies is “a great example to show that fear is unwarranted.”

The federal government has made record funding available for water-saving projects, including a $233 million pact with the Gila River Indian Community to conserve about two feet of water in Lake Mead, the massive and severely depleted reservoir on the Colorado River. Phase one of the solar canal project will cost $6.7 million and the Bureau of Reclamation provided $517,000 for the design.
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Microsoft snapped up Sam Altman and another architect of OpenAI for a new venture after their sudden departures shocked the artificial intelligence world, leaving the newly installed CEO of the ChatGPT maker to paper over tensions by vowing to investigate Altman’s firing.

The developments Monday come after a weekend of drama and speculation about how the power dynamics would shake out at OpenAI, whose chatbot kicked off the generative AI era by producing human-like text, images, video and music.

It ended with former Twitch leader Emmett Shear taking over as OpenAI’s interim chief executive and Microsoft announcing it was hiring Altman and OpenAI co-founder and former President Greg Brockman to lead Microsoft’s new advanced AI research team.

Despite the rift between the key players behind ChatGPT and the company they helped build, both Shear and Microsoft Chairman and CEO Satya Nadella said they are committed to their partnership.

Microsoft invested billions of dollars in the startup and helped provide the computing power to run its AI systems. Nadella wrote on X, formerly known as Twitter, that he was “extremely excited” to bring on the former executives of OpenAI and looked “forward to getting to know” Shear and the rest of the management team.

In a reply on X, Altman said “the mission continues,” while Brockman posted, “We are going to build something new & it will be incredible.”

OpenAI said Friday that Altman was pushed out after a review found he was “not consistently candid in his communications” with the board of directors, which had lost confidence in his ability to lead the company.

In an X post Monday, Shear said he would hire an independent investigator to look into what led up to Altman’s ouster and write a report within 30 days.

“It’s clear that the process and communications around Sam’s removal has been handled very badly, which has seriously damaged our trust,” wrote Shear, who co-founded Twitch, an Amazon-owned livestreaming service popular with video gamers.

He said he also plans in the next month to “reform the management and leadership team in light of recent departures into an effective force” and speak with employees, investors and customers.

After that, Shear said he would “drive changes in the organization,” including “significant governance changes if necessary.” He noted that the reason behind the board removing Altman was not a “specific disagreement on safety,” a likely reference to the debates that have swirled around OpenAI’s mission to safely build AI that is “generally smarter than humans.”

OpenAI last week declined to answer questions on what Altman’s alleged lack of candor was about. Its statement said his behavior was hindering the board’s ability to exercise its responsibilities. But a key driver of Friday’s shakeup, OpenAI’s co-founder, chief scientist and board member Ilya Sutskever, posted regrets on the situation to X on Monday: “I deeply regret my participation in the board’s actions. I never intended to harm OpenAI. I love everything we’ve built together and I will do everything I can to reunite the company.”

OpenAI didn’t reply to emails Monday seeking comment. A Microsoft representative said the company would not be commenting beyond its CEO’s statement.

After Altman was pushed out Friday, he stirred speculation that he might be coming back into the fold in a series of tweets. He posted a photo of himself with an OpenAI guest pass on Sunday, saying this is “first and last time i ever wear one of these.”

Hours earlier, he tweeted, “i love the openai team so much,” which drew heart replies from Brockman, who quit after Altman was fired, and Mira Murati, OpenAI’s chief technology officer who was initially named as interim CEO.

It’s not clear what transpired between the announcement of Murati’s interim role Friday and Shear’s hiring, though she was among several employees on Monday who tweeted, “OpenAI is nothing without its people.” Altman replied to many with heart emojis.

Shear said he stepped down as Twitch CEO because of the birth of his now-9-month-old son but “took this job because I believe that OpenAI is one of the most important companies currently in existence.”

His beliefs on the future of AI came up on a podcast in June. Shear said he’s generally an optimist about technology but has serious concerns about the path of artificial intelligence toward building something “a lot smarter than us” that sets itself on a goal that endangers humans.

“If there is a world where we survive … where we build an AI that’s smarter than humans and survive it, it’s going to be because we built smaller AIs than that, and we actually had as many smart people as we can working on that, and taking the problem seriously,” Shear said in June.

It’s an issue that Altman consistently faced since he helped catapult ChatGPT to global fame. In the past year, he has become Silicon Valley’s most sought-after voice on the promise and potential dangers of artificial intelligence.

He went on a world tour to meet with government officials earlier this year, drawing big crowds at public events as he discussed both the risks of AI and attempts to regulate the emerging technology.

Altman posted Friday on X that “i loved my time at openai” and later called his ouster a “weird experience.”

“If Microsoft lost Altman he could have gone to Amazon, Google, Apple, or a host of other tech companies craving to get the face of AI globally in their doors,” Daniel Ives, an analyst with Wedbush Securities, said in a research note.

Microsoft is now in an even stronger position on AI, Ives said. Its shares rose nearly 2% before the opening bell and were nearing an all-time high Monday.
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