Tag Archives: Investment & Company Information

Most of OpenAI’s staff threatens to quit unless the board resigns and reinstates Sam Altman as CEO

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The OpenAI chaos took another twist on Monday morning as most of the company's staff threatened to quit unless the board resigns and reinstates former CEO Sam Altman and ex-president Greg Brockman. According to Wired and Kara Swisher, around 500 employees — including several executives — signed the letter at the outset. 

By Monday afternoon, the number of signatories had swelled to more than 700, according to Bloomberg. That's almost all of the company's approximately 770 employees. Several staff members, including Chief Technical Officer Mira Murati (who held the company's top job on an interim basis for less than a weekend), wrote on X early Monday that "OpenAI is nothing without its people."

The letter to the board is the latest development in a series of events that started on Friday afternoon, when OpenAI's board fired Altman. The board claimed Altman had not been "consistently candid in his communications with the board, hindering its ability to exercise its responsibilities." As such, the board felt it no longer had "confidence in his ability to continue leading OpenAI." Brockman told OpenAI staff in an email on Friday that he was resigning as chairman "based on today's news." 

Chief Operating Officer Brad Lightcap later said in a leaked internal memo that Altman was sacked due to “a breakdown in communication,” not “malfeasance or anything related to our financial, business, safety, or security/privacy practices.”

Altman and Brockman held crunch talks with OpenAI's board over the weekend in an attempt to get their jobs back. But those discussions did not work out in the favor of the former CEO and chairman. It emerged late Sunday night that the board had instead opted to hire former Twitch CEO Emmett Shear as OpenAI's interim chief executive.

There was yet another major development late Sunday/early Monday morning, as Microsoft hired Altman, Brockman and several of their former OpenAI colleagues to head up a new advanced AI research team. Microsoft is OpenAI's biggest investor and it's using the company's tech to help power its generative AI-driven products such as Copilot. The news of Altman's firing reportedly caught Microsoft by surprise. Even though there were suggestions that Satya Nadella has effectively acquihired OpenAI for free, the Microsoft CEO said his company remains "committed to our partnership with OpenAI."

Although Nadella says Altman, Brockman and others now seemingly have new positions at Microsoft, that may not yet be a done deal. According to The Verge, Altman and Brockman may still get their jobs back at OpenAI if the board steps aside. 

If Altman and Brockman don't return to OpenAI, hundreds of employees may end up joining them at Microsoft. In their letter, OpenAI employees accused the board of acting against the best interests of the company.

"Your actions have made it obvious that you are incapable of overseeing OpenAI. We are unable to work for or with people that lack competence, judgement and care for our mission and employees," the letter reads. "We, the undersigned, may choose to resign from OpenAI and join the newly announced Microsoft subsidiary run by Sam Altman and Greg Brockman. Microsoft has assured us that there are positions for all OpenAI employees at this new subsidiary should we choose to join. We will take this step imminently, unless all current board members resign, and the board appoints two new lead independent directors, such as Bret Taylor and Will Hurd, and reinstates Sam Altman and Greg Brockman."

Ilya Sutskever, an OpenAI board member and the company’s chief scientist, was reportedly the person who coordinated the coup against Altman. However, Sutskever has now expressed regret for "my participation in the board's action" and pledged to do "do everything I can to reunite the company." Sutskever is one of the letter's several hundred signees.

Update 11/20 2:33PM ET: Updated to reflect that more than 700 OpenAI employees have signed the letter. Also noted that Altman and Brockman's move to Microsoft isn't necessarily a done deal.

This article originally appeared on Engadget at https://www.engadget.com/most-of-openais-staff-threatens-to-quit-unless-the-board-resigns-and-reinstates-sam-altman-as-ceo-142138044.html?src=rss

OpenAI reportedly considering reinstating just-ousted CEO Sam Altman

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Following his surprise firing on Friday, former OpenAI CEO Sam Altman might not be as out of a job as we initially thought he was, according to report from The Verge on Saturday. Reportedly, sources close to Altman say that the board itself, in a stunning reversal, have "agreed in principal" to resign while reinstating him to his former position. However, the board has since reportedly missed a 5pm PT deadline regarding the decision.

Shortly after Altman's firing on Friday afternoon, several senior staffers, including former Chairman and President Greg Brockman, Director of Research Jakub Pachocki, Head of Preparedness Aleksander Madry and Senior Researcher Szymon Sidor, tendered their resignations in protest. Additional OpenAI staffers were supposedly set to quit in solidarity at that meeting as well. They're reportedly willing to follow Altman, a la Jerry Maguire, to a new AI startup venture, should he decide to launch one. 

An internal memo circulated after Altman's dismissal argued that his termination was not related to "malfeasance or anything related to our financial, business, safety or security/privacy practices,” per Axios' reporting.

Microsoft is a major investor in the OpenAI venture, having injected another $10 billion into the project's coffers this past January as part of a long term partnership between the two. In all, it has invested around $13 billion in OpenAI. In a statement, Microsoft said it maintains the "utmost confidence" in OpenAI interim-CEO Mira Murati and "remains confident" in the partnership overall. 

Despite those assurances, rank-and-file employees were given little notice prior to the official announcement of Altman's ouster (Altman himself received even less — reportedly, just 5 to 10 minutes). Altman had, in the days leading up to his termination, remained an active supporter and recruiter for the firm, appearing at the Asia-Pacific Economic Cooperation forum less than a day prior to his firing. 

According to The New York Times, neither Altman nor Brockman are guaranteed a return to power, largely on account of the company's non-profit origins, which preclude investors from directing company-wide decisions. They instead leave those choices to members of the board itself. Altman and Brockman were both members of the OpenAI board. However, with their departures, only lead researcher, Ilya Sutskever; Quora CEO Adam D’Angelo; director of strategy at Georgetown’s Center for Security and Emerging Technology Helen Toner; and computer scientist Tasha McCauley remain members — at least, through the weekend.

“We are still working towards a resolution and we remain optimistic,” Chief Strategy Officer Jason Kwon wrote to company staff in a Saturday memo, per The Information. “By resolution, we mean bringing back Sam, Greg, Jakub [Pachocki], Szymon [Sidor], Aleksander [Madry] and other colleagues (sorry if I missed you!) and remaining the place where people who want to work on AGI research, safety, products and policy can do their best work.”

This article originally appeared on Engadget at https://www.engadget.com/openai-potentially-considering-reinstating-its-freshly-ousted-ceo-sam-altman-051223213.html?src=rss

Internal memo says Sam Altman’s firing wasn’t due to ‘malfeasance’ or OpenAI safety practices

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An internal memo sent to OpenAI staff on Saturday after former CEO Sam Altman’s abrupt firing reiterates that “a breakdown in communication” led to the decision, not “malfeasance or anything related to our financial, business, safety, or security/privacy practices,” according to reporting from Axios and The New York Times. The memo obtained by both publications was sent to employees by OpenAI’s Chief Operating Officer Brad Lightcap.

Speculation has been nonstop since Altman was ousted unexpectedly as CEO on Friday and dropped from the company’s board of directors, with little concrete information from OpenAI itself to go on. In its announcement of the decision, the board said only that he was not “consistently candid in his communications with the board, hindering its ability to exercise its responsibilities.” The board named Mira Murati, OpenAI’s Chief Technology Officer, as interim CEO.

In response, OpenAI’s now-former president, Greg Brockman, announced he was stepping down too, tweeting, “Sam and I are shocked and saddened by what the board did today.” Three senior researchers later resigned as well, according to The Information. Now, in another report, sources told The Information that Altman already has a “new venture” in the works, and he plans to bring Brockman and possibly others on with him. It’s as yet unclear if this venture is separate from Altman’s other known upcoming projects, including a purported collaboration with former Apple designer Jony Ive.

Numerous reports in the aftermath have attempted to provide an explanation for Altman’s firing, with some claiming there were concerns over the rapid development of the company’s AI products and, according to journalist Kara Swisher, its “profit driven direction.” In Saturday’s memo, per Axios, Lightcap wrote that the announcement “took us all by surprise,” and “we have had multiple conversations with the board to try to better understand the reasons and process behind their decision.”

The sudden shakeup could now have ramifications for the impending sale of OpenAI’s employee shares, valued at roughly $86 billion, The Information reported. In a cryptic tweet on Saturday, Altman quipped, “if i start going off, the openai board should go after me for the full value of my shares (sic).”

This article originally appeared on Engadget at https://www.engadget.com/internal-memo-says-sam-altmans-firing-wasnt-due-to-malfeasance-or-openai-safety-practices-205156164.html?src=rss

OpenAI fires CEO Sam Altman as ‘board no longer has confidence’ in his leadership

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In a surprise shakeup of its c-suite Friday, OpenAI's board of directors announced that CEO Sam Altman has been fired and will be leaving both the company and the board, effective immediately. Chief Technology Officer Mira Murati has been named interim CEO.

Altman's oustering reportedly follows an internal "deliberative review process" which found he had not been "consistently candid in his communications with the board, hindering its ability to exercise its responsibilities," the company announced. As such, "the board no longer has confidence in his ability to continue leading OpenAI."

OpenAI, which owns popular AI chatbot ChatGPT, thanked Altman for his "many contributions to the founding and growth of OpenAI," but believes that "as the leader of the company’s research, product, and safety functions, Mira is exceptionally qualified to step into the role of interim CEO." The board added it has "the utmost confidence in her ability to lead OpenAI during this transition period.”

OpenAI's board is comprised of the company's Chief Scientist Ilya Sutskever, as well as Chairman and President Greg Brockman. Independent advisors, who hold no equity in the company, are also board members: Quora CEO Adam D’Angelo, tech entrepreneur Tasha McCauley and privacy advocate Helen Toner of the Georgetown Center for Security and Emerging Technology. Altman was also considered an independent advisor on the board, despite being CEO of the company prior to his departure.

Altman's personal profile has grown alongside the meteoric rise of generative AI technologies over the past year, making him something of the unofficial face for both OpenAI and the burgeoning industry as a whole. Previously the president of Y Combinator, Altman has appeared before Congressional panels and committees, attended Senate AI Insight forums and made numerous rounds at industry conferences.

The suddenness of Friday's announcement is certainly surprising given how steadily, and heavily, Altman has been promoting his company and its products in the days leading up to his termination.

Just last week, Altman took the stage at OpenAI's 2023 DevDay to announce a faster and more responsive GPT-4 Turbo platform as well as smaller, application-specific models simply dubbed GPTs. On Thursday Altman attended the Asia-Pacific Economic Cooperation CEO Summit in San Francisco. "Something has qualitatively changed,” he said during the event. “Now I can talk to this thing. It’s like the ‘Star Trek’ computer I was always promised… I think a lot of the world has collectively gone through a lurch this year to catch up.” 

Altman and Murati aren't the only ones caught in this shuffle. Brockman was also notified that he would have to step down from his role as board President, however, "based on today's news, I quit," he wrote to OpenAI employees in a company-wide email Friday.

Microsoft, which signed a "multibillion-dollar" partnership extension with OpenAI in January, was down in market trading Friday afternoon. Despite the stock price hit, Microsoft will maintain its existing partnership with OpenAI, a company spokesperson told Engadget via email. “We have a long-term partnership with OpenAI and Microsoft remains committed to Mira and their team as we bring this next era of AI to our customers.” the spokesperson said. However, according to an report by The Information, few people within the Microsoft organization were warned of Altman's sacking prior to the public news release, including teams tasked with developing products based on OpenAI tech. 

The software giant's stance isn't surprising given the reported details of its $10 billion investment this past January, which bumped OpenAI's valuation to $23 billion. Microsoft will reportedly receive a lion's share of OpenAI's profits, some 75 percent, until that investment has been repaid, whereupon that figure will reportedly drop to 49 percent.

"We have a long-term agreement with OpenAI with full access to everything we need to deliver on our innovation agenda and an exciting product roadmap; and remain committed to our partnership, and to Mira and the team," Microsoft CEO Satya Nadella said in a prepared statement Friday. "Together, we will continue to deliver the meaningful benefits of this technology to the world."

Altman co-founded OpenAI with Elon Musk in 2015 as a nonprofit and has served as the CEO for the for-profit arm since 2019. The release of the company's ultra-popular ChatGPT conversational AI last November is credited with kickstarting the generative AI boom. 

The system, originally built atop the GPT-3.5 platform, initially enabled users to converse with a digital agent — one more capable than the previous generation of Siri, Alexa and Assistant — using natural language. Those capabilities quickly expanded to include myriad languages and modalities, as well as the ability to output programming code and control remote processes and devices through API access.

This article originally appeared on Engadget at https://www.engadget.com/openai-ceo-sam-altman-ousted-as-board-no-longer-has-confidence-in-his-leadership-204924006.html?src=rss

Meta may return to China with the release of a new budget VR headset

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Meta hasn't been in China since Facebook was blocked way back in 2009, but that may be about to change. The company is reportedly planning to release an all-new, lower-priced version of its virtual reality headset in the nation via an exclusive deal with video game giant Tencent, The Wall Street Journal has reported. Sales are tentatively set to begin in late 2024, but some details must still be finalized. 

The new headset would be more powerful than the Quest 2, but use lower-quality optics than the Quest 3, according to the report. The more budget-oriented headset may also be sold in other regions. Meta would reportedly take a larger share of headset sales, while Tencent pull in more of the content and service revenue, "like software subscriptions and game sales."

The deal would open up a huge market for Meta's VR division, which has been hemorrhaging money and could certainly use the boost. However, it's not clear whether Tencent would require government approval to sell the devices. Gaming is a popular VR activity, but China's strict rules have already had a significant impact on Tencent, the world's largest video game company. 

China may not be a panacea for Meta's weak VR division, either. TikTok owner ByteDance is China's virtual reality leader with its Pico headset, but is struggling with sales in China just as Meta is elsewhere. And Tencent itself was reportedly on the brink of disbanding its own VR division, but supposedly built it back up once the Meta deal seemed inevitable. Headset sales across the globe fell nearly 45 percent this quarter compared to the same period last year. 

If the deal goes through, Meta would regain a foothold in China after 14 years with no direct presence there. The company has a 50 percent worldwide share of the VR market, with Sony's PlayStation VR2 and Pico's VR headset in second and third place. Apple is about to enter the market with its $3,500 Vision Pro headset, but isn't likely to have a serious presence until it releases a cheaper version down the road. 

This article originally appeared on Engadget at https://www.engadget.com/meta-may-return-to-china-with-the-release-of-a-new-budget-vr-headset-090522700.html?src=rss

Meta may return to China with the release of a new budget VR headset

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Meta hasn't been in China since Facebook was blocked way back in 2009, but that may be about to change. The company is reportedly planning to release an all-new, lower-priced version of its virtual reality headset in the nation via an exclusive deal with video game giant Tencent, The Wall Street Journal has reported. Sales are tentatively set to begin in late 2024, but some details must still be finalized. 

The new headset would be more powerful than the Quest 2, but use lower-quality optics than the Quest 3, according to the report. The more budget-oriented headset may also be sold in other regions. Meta would reportedly take a larger share of headset sales, while Tencent pull in more of the content and service revenue, "like software subscriptions and game sales."

The deal would open up a huge market for Meta's VR division, which has been hemorrhaging money and could certainly use the boost. However, it's not clear whether Tencent would require government approval to sell the devices. Gaming is a popular VR activity, but China's strict rules have already had a significant impact on Tencent, the world's largest video game company. 

China may not be a panacea for Meta's weak VR division, either. TikTok owner ByteDance is China's virtual reality leader with its Pico headset, but is struggling with sales in China just as Meta is elsewhere. And Tencent itself was reportedly on the brink of disbanding its own VR division, but supposedly built it back up once the Meta deal seemed inevitable. Headset sales across the globe fell nearly 45 percent this quarter compared to the same period last year. 

If the deal goes through, Meta would regain a foothold in China after 14 years with no direct presence there. The company has a 50 percent worldwide share of the VR market, with Sony's PlayStation VR2 and Pico's VR headset in second and third place. Apple is about to enter the market with its $3,500 Vision Pro headset, but isn't likely to have a serious presence until it releases a cheaper version down the road. 

This article originally appeared on Engadget at https://www.engadget.com/meta-may-return-to-china-with-the-release-of-a-new-budget-vr-headset-090522700.html?src=rss

Sony has now sold over 46.6 million PS5 consoles

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Sony has had a blockbuster quarter when it comes to PlayStation 5 sales. The company has sold 4.9 million PS5 units in its second financial quarter ending on September 30, bringing the total number of consoles sold to 46.6 million. It didn't quite reach last year's holiday figures, but it still moved 1.6 million units more than the same period in 2022. To note, Sony couldn't keep up with the demand for the console for quite some time due to the supply chain issues that plagued the tech industry, but it was finally able to ramp up production last year after the shortages had eased up. By July 2023, it announced that it had already sold more than 40 million PS5 consoles since the model came out in November 2020. 

To be able to reach its sales target of shipping 25 million PS5 units for this financial year, however, Sony will have to sell 16.8 million more units. That's a massive figure, considering it only sold 19.1 million PS5 consoles for the whole financial year of 2022. But according to Reuters, Sony President Hiroki Totoki is confident that the goal is something the company "can attain very easily." The company is likely expecting a boost in sales when its smaller PS5 models come out this month, just in time for people's holiday shopping sprees. 

In addition to its hardware sales, Sony has also reported that it sold 67.6 million games in the second quarter, though only 4.7 million are first-party titles. It will most likely post much higher first-party sales in the next quarter, though, seeing as Marvel’s Spider-Man 2 sold 5 million units within its first 11 days, eclipsing the performance of its prequel that sold 9 million copies in 80 days. 

This article originally appeared on Engadget at https://www.engadget.com/sony-has-now-sold-over-466-million-ps5-consoles-102604943.html?src=rss

WeWork files for Chapter 11 bankruptcy protection

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There has been another twist in the WeWork saga as the office space rental company has filed for bankruptcy protection. Following reports last week that the company was expected to file for Chapter 11 protection, WeWork's shares were halted on the New York Stock Exchange (NYSE) on Monday. According to The New York Times, it described its bankruptcy filing as a "comprehensive reorganization" of its business. "As part of today’s filing, WeWork is requesting the ability to reject the leases of certain locations, which are largely nonoperational, and all affected members have received advanced notice," the company told the publication in a statement. 

A number of factors played into WeWork's fall, including trying to grow too fast in its early days. The company has attempted to cut costs in recent years (including by closing several co-working spaces in the wake of COVID-19 lockdowns) while its revenue has grown. 

However, WeWork has been toiling in a real estate market that has felt the pinch of inflation and the rising costs of borrowing money. It has also been contending with another pandemic-accelerated change as millions more people are opting to work remotely instead of going to their company's offices. In its most recent earnings report in August, WeWork said it had "substantial doubt" about its ability to remain operational.

WeWork first attempted to go public in 2019, though it withdrew plans for an initial public offering after investors expressed concerns over profitability and corporate governance. Its S-1 filing showed losses of over $900 million for the first half of 2019 and indicated that WeWork was on the hook for over $47 billion worth of lease payments — WeWork takes out long-term leases on office space and rents it to workers and companies on a short-term basis.

That fiasco led to Softbank, which at one point led an investment round into WeWork when it had a valuation of $47 billion, taking control of the company. Softbank pushed out co-founder and CEO Adam Neumann with an exit package that was said to be worth $445 million.

The business eventually went public in 2021 after it merged with a special-purpose acquisition company. WeWork shares cost more than $400 two years ago, but by Monday the price had dropped to under $1.

WeWork has made more attempts to steady the ship. In September, the company completed a reverse stock split. It said this was conducted to help it continue to comply with the $1 minimum share closing price required to stay listed on the NYSE.

Later that month, WeWork said it would try to renegotiate the vast majority of its leases. At the time, CEO David Tolley pointed out that the company's lease liabilities amounted to over two-thirds of its operating income in the second quarter of this year.

On October 31, WeWork said it would withhold some interest payments — even though it had the cash to make them — in an attempt to improve its balance sheet. The company then entered a 30-day grace period before an event of default.

Meanwhile, Neumann has a new real estate venture, this time focused on residential rentals. It emerged last year that he had bought more than 3,000 apartments in Miami, Fort Lauderdale, Atlanta and Nashville. Flow, the company that will manage those properties, has reportedly received an investment of $350 million from venture capital firm Andreessen Horowitz.

This article originally appeared on Engadget at https://www.engadget.com/wework-files-for-chapter-11-bankruptcy-protection-030708470.html?src=rss

Apple’s revenue declines again despite record iPhone and services sales

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Apple's latest quarterly earnings report paints a picture of software wins amid something of a hardware slump. In a statement announcing the financial results for its fiscal fourth quarter, the company called out a new all-time high for revenue from its services division. It also highlighted iPhone revenue as having set a September quarter record. However, this marks the fourth consecutive quarter of overall revenue decline, with its earnings of $89.5 billion representing a 1 percent drop year over year. This also means the record-breaking performances of the iPhone and Services divisions did little to offset weakness elsewhere. 

The lackluster performance is somewhat understandable, though. The company just had a launch event for its new M3 chips, MacBooks and an iMac this week, none of which can be bought yet. And though the new iPhone 15 lineup and Apple Watches were introduced in September, sales of those devices likely did not account for much of this fiscal quarter’s results. We're also anticipating a November release for new iPads this year, which could further fuel hardware revenue. 

Correspondingly, the Mac, iPad and wearables divisions were down this quarter, with the first two taking noticeable hits. Though Apple drummed up significant interest with the Vision Pro headset earlier this year, that device is far from ready to be sold to the public and is unlikely to hit the market until 2024 at the earliest. With holiday shopping about to ramp up, as well as more product releases on the horizon, it’s much more likely that the company’s hardware products will have a greater impact on its bottom line next quarter.

This article originally appeared on Engadget at https://www.engadget.com/apples-revenue-declines-again-despite-iphone-and-services-strength-211938910.html?src=rss

Samsung credits strong smartphone and mobile display sales for income growth

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Samsung has been reporting steep profit declines and record-breaking losses over the past quarters, and while it has yet to go back to its previous numbers, it sounds optimistic for the future in its latest earnings report. The company credited the strong sales of its mobile flagship devices and its premium displays for doing better the past three months than the previous quarters. Samsung also said that its Device Solutions (DS) division, which includes its memory and foundry businesses, has narrowed its losses. It even expects demand for memory chips to recover gradually with the rise in popularity of artificial intelligence. 

The company has posted a consolidated revenue of KRW 67.40 trillion ($49.9 billion) for the third quarter of 2023, which shows a respectable 12 percent increase from the previous quarter's. It reported KRW 2.43 trillion ($1.80 billion) in profit, as well, and while that's a third of what it earned in the same period of 2022 — KRW 10.85 trillion or $7.6 billion — that figure still much better than the $527 million profit it reported for the second quarter. 

For its mobile and network business, in particular, it reported KRW 30 trillion ($22.17 billion) in consolidated revenue, as well as KRW 3.30 trillion ($2.44 billion) in operating profit. There was a higher demand in the third quarter compared to the second, Samsung said, thanks to the global smartphone market showing signs of recovery. If you'll recall, the company mostly blamed its drop in revenue for the second quarter to a decline in smartphone shipments. For this period, it says the Galaxy S23 series has maintained "solid sales momentum," while its foldables, tablets and wearables recorded strong sales. It expects smartphones sales to grow next quarter due to the holiday season and for the market to bounce back next year "as consumer sentiment stabilizes in anticipation of a global economic recovery."

Another segment that did well in the third quarter is Samsung's mobile panel business, which "reported a significant increase in earnings on the back of new flagship model releases by major customers." As Bloomberg notes, those new flagship model releases could include Apple's iPhone 15. Samsung intends to continue focusing on OLED panels for its mobile display business and plans to establish a supply chain catering to the augmented and virtual reality market. 

Finally, the company's semiconductor division posted KRW 3.75 trillion ($2.77 billion) in operating losses for the quarter, which is slightly better than its KRW 4.36 trillion ($3.23 billion) losses in the previous one. Samsung expects the demand for PCs and mobile devices to improve next period, and it's anticipating strong server demand from cloud service providers thanks to generative AI applications. 

This article originally appeared on Engadget at https://www.engadget.com/samsung-credits-strong-smartphone-and-mobile-display-sales-for-income-growth-053947279.html?src=rss