Microsoft is Eating OpenAI

Hey Everyone,

AI is eating itself.

More than 5 years after the paper by Google researchers that would transform the world, we are now at a crossroads.

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Sam Altman’s exit from the CEO of OpenAI to Microsoft is a case in point.

Amid rumors of AI eating its own tail, Sam Altman and his loyalists going to an advanced AI research team within Microsoft sounds like a major exodus of talent and senior leadership in OpenAI, and maybe the end of its ability to get Billions of dollars in funding.

While some are claiming it’s a great victory of Satya Nadella, I’m not so sure. Cannibalizing your biggest investment doesn’t usually turn out very well. Just one year after ChatGPT launches and Generative A.I. consolidation is already occurring? Given the moves of Inflection, Anthropic and Character.AI, BigTech was already at the doorstep of these startups.

The Beginning of the End of OpenAI

But with OpenAI being torn in half, it seems like independent startups in Generative A.I. really cannot survive or keep up on their own, which means real innovation may be stunted.

BigTech have eaten LLMs and after all the GPTs and copilots can we say the world is in better hands or in a better place?

With scars from the heyday of other hype cycles, Silicon Valley cronies in their Venture Capital towers don’t care about innovation, they just want to profit and Generative A.I. seems stuck in this loop.

While some will praise Satya Nadella and hero-worship Sam Altman, breaking OpenAI into two parts will slow down momentum for LLMs and research while handing even more power to the Cloud and Azure in its future.

If AI-generated content is beginning to fill the internet, and that could be bad news for future AI models, AI startups are already being eaten by Silicon Valley even before they reach their best years.

Microsoft taking Sam Atman and his followers in, is like shutting down your best investment just for a short-term benefit. These stories don’t usually end well for big corporations.

It’s the job of Venture Capitalist to praise Microsoft, Satya Nadella, and Sam Altman to vilify OpenAI’s board in all of this. But don’t mistake that as the truth. Microsoft eating OpenAI and poaching their talent, is the worst possible scenario for the startup that was just beginning to get momentum.

Satya Nadella tried to negotiate and gave Sam Altman and Greg Brackman offers they couldn’t refuse. Unfortunately the result doesn’t have a high likelihood of success. Betting on breaking up a startup that you’ve spent over $13 Billion on is a choice that will grow to haunt Microsoft for years and decades to come.

Microsoft inviting Sam Altman to lead an internal advanced R&D Lab, is how to ignite the fall of OpenAI. BigTech pressuring the consolidation of Generative A.I. startups prematurely could stunt the entire progress of LLMs and allow China to catch up.

This is what happens when free market capitalism and anti-competitive rules are absent from your system. Silicon Valley has prioritized the wrong incentives for A.I. to blossom organically in the 2020s.

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