Tag Archives: Finance

PSA: The cheapest Tesla car won’t qualify for full federal tax credit starting January 1

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With the Biden administration's continued attempt to limit Chinese battery components in US electric vehicles, Tesla has now announced that two of its models won't qualify for the full $7,500 federal tax credit as of January 1, 2024. As pointed out by our sister site TechCrunch, Tesla's website currently has a top banner claiming that tax credit "reductions likely for certain vehicles in 2024," urging customers to "take delivery by 12/31" in order to qualify for the full claim. A link in the banner toggles a message that specifies which two models are likely to be affected:

"Customers who take delivery of a qualified new Tesla and meet all federal requirements are eligible for a tax credit up to $7,500. Tax credit will reduce to $3,750 for Model 3 Rear-Wheel Drive and Model 3 Long Range on Jan 1, 2024. Take delivery by Dec 31 to qualify for full tax credit."

According to the IRA (Inflation Reduction Act) rules, vehicles using battery components that are 50 percent made or assembled in the US qualify for the first half of the tax credit, i.e. $3,750. The cars can only get the remaining half of the credit if their manufacturer sources at least 40 percent of their critical minerals from the US or its free trade partners, which don't include China. If a company meets one or the other standard, the vehicle gets a half credit.

However, with the latest proposal on IRA credit rules issued on December 1, the Biden administration wants to further tighten the clean vehicle tax credit requirements by targeting FEOCs (Foreign Entity of Concern), which include China, Russia, North Korea and Iran:

"Beginning in 2024, an eligible clean vehicle may not contain any battery components that are manufactured or assembled by a FEOC, and, beginning in 2025, an eligible clean vehicle may not contain any critical minerals that were extracted, processed, or recycled by a FEOC."

Back in June, the cheapest Tesla car, the rear-wheel drive Model 3, was able to switch from half the tax credit to full credit, likely due to a change in supplier or materials to meet the guidelines. While the latest reversal still offers half the credit, this may eventually be zeroed next year, unless Tesla is willing to source batteries from other countries — which are likely more expensive.

This article originally appeared on Engadget at https://www.engadget.com/psa-the-cheapest-tesla-car-wont-qualify-for-full-federal-tax-credit-starting-january-1-040835278.html?src=rss

Spotify is laying off 1,500 employees, who will be notified later today

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Spotify is cutting jobs for the third time this year. In a pre-holiday shocker, Spotify is laying off 1,500 workers, or 17 percent of its workforce, CEO Daniel Ek announced in a press release on Monday. The cuts are being made due to what Ek called "the challenges ahead" and he elected to make them immediately instead of doing smaller reductions over time. Affected employees will be notified later today, he added. 

"I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance," Ek wrote. "We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to right-size our costs was the best option to accomplish our objectives. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team."

Ek went on to note that the company expanded considerably in 2020 and 2021 due to the lower cost of capital. "These investments generally worked, contributing to Spotify’s increased output and the platform’s robust growth this past year," he said. And despite reductions made last year — the company laid off 6 percent of its workforce early in 2023 and another 2 percent in May — "our cost structure for where we need to be is still too big," Ek said. 

Follow those rounds of layoffs, Spotify had around 9,000 employees, so the latest cuts will see around 1,500 employees losing their jobs (4,300 of those jobs were in the US as of 2022). To soften the blow, Ek said Spotify will pay an average of five months severance, cover healthcare during that time and provide immigration/career support. 

Ek said that for the company's next phase, "being lean is not just an option but a necessity." Last month, Spotify announced a revamped royalty model, which is supposed to give "working artists" a bigger cut, while reducing fraudulent streams. 

Spotify has seen consistent growth since it launch and now counts 574 million monthly active users, up 26 percent over the same period last year. The company has always struggled to make a profit, though with its last quarter being a rare exception. Ek promised more information about what the changes will mean "in the days and weeks ahead" — but all that will be cold comfort to employees suddenly finding themselves unemployed just before the holidays. 

This article originally appeared on Engadget at https://www.engadget.com/spotify-is-laying-off-1500-employees-081521615.html?src=rss

OpenAI’s GPT Store won’t be released until 2024

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OpenAI is pushing the launch of its GPT Store to early 2024, according to an email seen by The Verge. The company introduced its GPT Builder tool in early November at its first developer conference, giving subscribers an easy way to create their own custom AI bots. At the time, OpenAI also said it would soon release the GPT Store for users to list their GPTs and potentially make money from them. It was initially slated for a November launch. But, with the surprise ouster of OpenAI’s since-reinstated CEO Sam Altman, the month didn’t quite pan out as planned.

“In terms of what’s next, we are now planning to launch the GPT Store early next year,” OpenAI said in its email to GPT Builder users on Friday. “While we had expected to release it this month, a few things have been keeping us unexpectedly busy!” The email also notes that the company has been making improvements to GPTs based on users’ feedback, and says some updates to ChatGPT are on the way.

OpenAI has been in the process of reorganizing its leadership following the turmoil of the past few weeks. The company confirmed on Wednesday that Altman was back as CEO, with Mira Murati now in place as CTO and Greg Brockman as President. It also announced the formation of a new initial board, which includes representation from Microsoft — its biggest investor — as a non-voting observer.

This article originally appeared on Engadget at https://www.engadget.com/openais-gpt-store-wont-be-released-until-2024-162113991.html?src=rss

Apple is reportedly ending its partnership with Goldman Sachs

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Apple and Goldman Sachs are potentially ending their partnership four years after joining forces on an Apple credit card, The Wall Street Journal reports. The companies recently extended their agreement until 2029, but Apple proposes ending the contract in the next 12 to 15 months.

Although the pair launched a high-yield savings account in April of this year, it's likely that Goldman won't be too upset by a possible breakup. Last month, reports suggested the bank was aiming to get out of the consumer lending business. It had gone as far as to tell Apple earlier this year that it would like to get out of the agreement and approached American Express to take over its side of operations. 

Goldman also recently made arrangements to sell home improvement loan company Green Sky and plans to end its other credit card partnership with General Motors. Basically, Goldman tried to diversify outside of corporate and very wealthy clients, potentially writing off billions of dollars before returning to basics. The bank told employees that any layoffs would include one year's salary.

In a statement to CNBC, an Apple representative said: "Apple and Goldman Sachs are focused on providing an incredible experience for our customers to help them lead healthier financial lives. The award-winning Apple Card has seen a great reception from consumers, and we will continue to innovate and deliver the best tools and services for them."

Apple and Goldman's partnership was never a match made in heaven for the companies or consumers. Goldman employees were frustrated with aspects such as the payment schedule and a push for mass application approval. Customers, on the other hand, reported that the bank's customer service was a nightmare, including delayed transfers and lectures from representatives, according to The Information.

The future of Apple's credit card and high-yield savings account is uncertain. The pair are part of Apple's services sector, which is seeing growing revenue compared to reductions in its general sales. Synchrony Financial, which works with Amazon and PayPal, has been exploring the possibility of taking over Goldman's role. The company originally bid against Goldman for the program.

This article originally appeared on Engadget at https://www.engadget.com/apple-is-reportedly-ending-its-partnership-with-goldman-sachs-104511694.html?src=rss

Sam Altman reinstated as OpenAI CEO five days after being fired

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Sam Altman is returning to OpenAI as CEO after his firing five days ago launched the company onto one of the wildest rollercoaster rides in tech history. Former president Greg Brockman, who resigned on Friday in protest, will also return, The Verge's sources say. The original board has been disbanded and replaced by a new, temporary three-man board with Bret Taylor (chair), Larry Summers and original board member Adam D'Angelo, the company said in a post on X. 

The agreement has been struck "in principal," and must still be approved by all parties. The only job of the initial board will be to vet and appoint a permanent board with up to 9 members that will reset OpenAI's governance. One of those seats will likely to go Microsoft and Altman himself, The Verge reported.

Altman confirmed the news in a separate post. "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]," he said. That means Altman wouldn't join Microsoft after all, though he added that he felt his decision at the time "was the best path for me and the team." 

"We are encouraged by the changes to the OpenAI board," Microsoft CEO Satya Nadella added in another post. "We believe this is a first essential step on a path to more stable, well-informed, and effective governance."

Another major OpenAI investor, Thrive Capital, issued a statement calling Altman's return "the best outcome for the company, its employees, those who build on their technologies and the world at large." Helen Toner, who reportedly had a hand in ousting Altman in the first place, posted "and now, we all get some sleep." 

The timeline over the last week reads almost like a telenovela. It commenced with the shocking termination of CEO Altman late in the day on Friday, November 17, followed by Brockman announcing that we would quit in protest. OpenAI then appointed CTO Mira Murati as interim CEO. The board stated that Altman was terminated for not being "consistently candid" in communications, a confusing comment that only generated more speculation. 

The drama continued on the weekend, as Nadella was reportedly "furious" over the decision, particularly because Microsoft was only given a few minutes of notice before the decision was publicly revealed. On Saturday he announced that Microsoft "remained committed" to its OpenAI partnership, but simultaneously revealed that he was hiring Altman to head a new AI division. By the end of the weekend, Murati was replaced as CEO by Twitch co-founder Emmett Shear.

On Monday, nearly the entire OpenAI staff told the board in an open letter that it would resign and join the new Microsoft subsidiary if Altman didn't return to the company as CEO. Things weren't looking great when the board failed to respond to the letter by the stated deadline, despite a post from co-founder Ilya Sutskever taking some blame for the situation. Compounding things, Shear threatened to step down as CEO, saying Altman's termination was "handled very badly."

Yesterday, it was reported that Altman was again negotiating with the board to return as CEO. However, as recently as a few hours ago, it still looked like Altman would be heading to Microsoft and perhaps taking many of OpenAI's employees with him. Shear's threat to quit reportedly lit a fire under OpenAI's board, which restarted negotiations with Altman in earnest, leading to today's announcement that he'd be coming back after all. 

This article originally appeared on Engadget at https://www.engadget.com/sam-altman-is-reinstated-as-openai-ceo-five-days-after-being-fired-070037749.html?src=rss

Binance founder Changpeng Zhao steps down as CEO, will plead guilty to federal charges

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Binance CEO Changpeng Zhao is set to plead guilty to federal money laundering charges and step down from his position at the company he founded. Zhao and the cryptocurrency exchange have reached a plea deal with the government, which conducted a multi-year investigation into the company, CNBC reports. As part of the settlement, Binance will forfeit $2.5 billion and pay a $1.8 billion fine. Zhao is slated to personally pay $50 million.

Zhao will be prohibited from having any involvement with Binance for three years. As part of the plea deal, Zhao will plead guilty later on Tuesday to violating and causing a financial institution to violate the Bank Secrecy Act, according to Reuters.

Binance, Zhao and others were accused of failing to institute an effective anti-money laundering program. According to the Justice Department, they willfully violated economic sanctions “in a deliberate and calculated effort to profit from the US market without implementing controls required by US law." Court documents state that the lack of anti-money laundering measures led to Binance facilitating almost $900 million in financial transactions in violation of sanctions against Iran between 2018 and 2022.

In a statement, Zhao confirmed he is stepping down as CEO, with the company's former global head of regional markets Richard Teng taking over the top job. "Today, I stepped down as CEO of Binance," Zhao wrote on X. "Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself." 

Zhao now plans to take a break before perhaps getting more involved in investing. However, "I can’t see myself being a CEO driving a startup again. I am content being an one-shot (lucky) entrepreneur."

The settlement resolves criminal charges related to breaching sanctions regulations, conspiracy and conducting an unlicensed money transmitter business. Meanwhile, former compliance chief Samuel Lim will reportedly face charges as part of the deal.

This is a major settlement between the company and agencies such as the Commodity Futures Trading Commission (CFTC) and the Treasury Department. The CFTC charged Binance, Zhao and Lim with violating its rules, as well as the Commodity Exchange Act, earlier this year.

“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” Treasury Secretary Janet Yellen said in a statement. “Today’s historic penalties and monitorship to ensure compliance with US law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the US financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime, or face the consequences.”

Binance will remain in operation, albeit under stricter rules. It will need to ensure it abides by anti-money laundering regulations by beefing up its compliance program. The company will also have to appoint an independent compliance monitor.

In June, the Securities and Exchange Commission sued Binance and Zhao, alleging that they helped US traders bypass restrictions and violated securities laws by, among other things, mishandling funds. The SEC also claimed that (in similar allegations to those laid against rival exchange FTX) Binance commingled billions of dollars of customer money with the company's own funds. The SEC charges were not resolved in this settlement.

This article originally appeared on Engadget at https://www.engadget.com/binance-founder-changpeng-zhao-steps-down-as-ceo-will-plead-guilty-to-federal-charges-210627469.html?src=rss

What is going on with OpenAI and Sam Altman?

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It’s been an eventful weekend at OpenAI’s headquarters in San Francisco. In a surprise move Friday, the company’s board of directors fired co-founder and CEO Sam Altman, which set off an institutional crisis that has seen senior staff resign in protest with nearly 700 rank-and-file employees threatening to do the same. Now the board is facing calls for its own resignation, even after Microsoft had already swooped in to hire Altman’s cohort away for its own AI projects. Here’s everything you need to know about the situation to hold your own at Thanksgiving on Thursday.

How it started

Thursday, November 16

This saga began forever ago by internet standards, or last Thursday in the common parlance. Per a tweet from former-company president Greg Brockman, that was when OpenAI’s head researcher and board member, Ilya Sutskever, contacted Altman to set up a meeting the following day at noon. In that same tweet chain (posted Friday night), Brockman accused the company of informing the first interim-CEO, OpenAI CTO Mira Murati, of the upcoming firings at that time as well:

- Last night, Sam got a text from Ilya asking to talk at noon Friday. Sam joined a Google Meet and the whole board, except Greg, was there. Ilya told Sam he was being fired and that the news was going out very soon.

- At 12:19PM, Greg got a text from Ilya asking for a quick call. At 12:23PM, Ilya sent a Google Meet link. Greg was told that he was being removed from the board (but was vital to the company and would retain his role) and that Sam had been fired. Around the same time, OpenAI published a blog post.

- As far as we know, the management team was made aware of this shortly after, other than Mira who found out the night prior.

Friday, November 17

Everything kicked off at that Friday noon meeting. Brockman was informed that he would be demoted — removed from the board but remain president of the company, reporting to Murati once she’s installed. Barely ten minutes later, Brockman alleges, Altman was informed of his termination as the public announcement was published. Sutskever subsequently sent a company-wide email stating that “Change can be scary,” per The Information.

Later that afternoon, the OpenAI board along with new CEO Murati addressed a “shocked” workforce in an all-hands meeting. During that meeting, Sutskever reportedly told employees the moves will ultimately “make us feel closer."

At this point, Microsoft, which just dropped a cool $10 billion into OpenAI’s coffers in January as part of a massive, multi-year investment deal with the company weighed in on the day’s events. CEO Satya Nadella released the following statement:

As you saw at Microsoft Ignite this week, we’re continuing to rapidly innovate for this era of AI, with over 100 announcements across the full tech stack from AI systems, models and tools in Azure, to Copilot. Most importantly, we’re committed to delivering all of this to our customers while building for the future. 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. Together, we will continue to deliver the meaningful benefits of this technology to the world.

By Friday evening, things really began to spiral. Brockman announced via Twitter that he quit in protest. Director of research Jakub Pachocki and head of preparedness Aleksander Madry announced that they too were resigning in solidarity.

How it’s going

Saturday/Sunday, November 18/19

On Saturday, November 18, the backtracking begins. Altman’s Friday termination notice states that, “Mr. Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI.”

The following morning, OpenAI COO Brad Lightcap wrote in internal communications obtained by Axios that the decision “took [the management team] by surprise” and that management had been in conversation “with the board to try to better understand the reasons and process behind their decision.”

“We can say definitively that the board’s decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices,” Lightcap wrote. “This was a breakdown in communication between Sam and the board … We still share your concerns about how the process has been handled, are working to resolve the situation, and will provide updates as we’re able.”

A report from The Information midmorning Saturday revealed that OpenAI’s prospective share sale being led by Thrive Capital, valued at $86 billion, is in jeopardy following Altman’s firing. Per three unnamed sources within the company, even if the sale does go through, it will likely be at a lower valuation. The price of OpenAI shares has tripled since the start of the year, and quadrupled since 2021, so current and former employees, many of whom were offered stock as hiring incentives, were in line for a big payout. A payout might not be coming anymore.

On Saturday afternoon, Altman announced on Twitter that he would be forming a new AI startup with Brockman’s assistance, potentially doing something with AI chips to counter NVIDIA’s dominance in the sector. At this point OpenAI’s many investors, rightly concerned that their money was about to go up in generative smoke, began pressuring the board of directors to reinstate Altman and Brockman.

Microsoft’s Satya Nadella reportedly led that charge. Bloomberg’s sources say Nadella was “furious” over the decision to oust Altman — especially having been given just “a few minutes” of notice before the public announcement was made — even going so far as to recruit Altman and his cohort for their own AI efforts.

Microsoft also has leverage in the form of its investment, much of which is in the form of cloud compute credits (which the GPT platform needs to operate) rather than hard currency. Denying those credits to OpenAI would effectively hobble the startup’s operations.

Interim-CEO Mira Murati’s 48-hour tenure at the head of OpenAI came to an end on Sunday when the board named Twitch co-founder Emmett Shear as the new interim-CEO. According to Bloomberg reporter Ashley Vance, Murati had planned to hire Altman and Brockman back in a move designed to force the board of directors into action. Instead, the board “went into total silence” and “found their own CEO Emmett Shear.” Altman spent Sunday at OpenAI HQ, posting an image of himself holding up a green “Guest” badge.

“First and last time i ever wear one of these,” he wrote.

Monday, November 20

On Monday morning, an open letter from more than 500 OpenAI employees circulated online. The group threatened to quit and join the new Microsoft subsidiary unless the board itself resigns and brings back Altman and Brockman (and presumably the other two as well). The number of signatories has since grown to nearly 700.

Despite Sutskever’s early morning mea culpa, that seemed unlikely. The board had missed its deadline to respond to the open letter, Microsoft claimed to have hired Altman and Brockman and Shear had been named interim CEO.

Shear stepped down as CEO of Twitch in March, where he led the company for more than 16 years and has been working as a partner at Y Combinator for the past seven months. Amazon acquired the live video streaming app in 2014 for just under $1 billion.

“I took this job because I believe that OpenAI is one of the most important companies currently in existence. When the board shared the situation and asked me to take the role, I did not make the decision lightly,” Shear told OpenAI employees Monday.

“Ultimately I felt that I had a duty to help if I could,” he added.

Shear was quick to point out that Altman’s termination was “handled very badly, which has seriously damaged our trust.” As such he announced the company will hire an independent investigator to report on the run-up to Friday’s SNAFU.

“The board did *not* remove Sam over any specific disagreement on safety, their reasoning was completely different from that,” Shear continued. “I’m not crazy enough to take this job without board support for commercializing our awesome models.”

Following his departure to Microsoft on Monday, Altman posted, “the OpenAI leadership team, particularly mira brad and jason but really all of them, have been doing an incredible job through this that will be in the history books.”

“Incredibly proud of them,” he wrote.

There was one more twist in store on Monday, however. Reports suggested that Altman's move to Microsoft wasn't a sure thing — and that he was still angling for a return to OpenAI.

Tuesday, November 21

Tuesday was another eventful day in this soap opera-esque saga. Altman was said to be discussing his potential return to OpenAI with the board, just four days after those same people booted him out of the company. Bloomberg reported that, until Monday, the board "largely refused to engage" with Altman, so the fresh talks were notable. The negotiations were said to involve board member Adam D’Angelo (who is CEO of Quora) along with OpenAI investors who had been pushing for Altman's return.

Things largely remained quiet on the OpenAI front for several hours. However, on Tuesday afternoon, Brockman posted about ChatGPT's voice conversation feature becoming available to all users. That raised a few eyebrows, given that he seemed not to be involved with the company at the time.

The biggest shock of all emerged late on Tuesday night (early Wednesday on the East Coast) when OpenAI said it had reached an agreement in principle for Altman to return as CEO. The company noted that all parties were "collaborating to figure out the details." Brockman also said late Tuesday that he was returning and "getting back to coding tonight."

The board has a new look as well, with only D’Angelo remaining. Google Maps co-creator and former Salesforce co-CEO Bret Taylor succeeded Brockman as chair. Former US Treasury Secretary Larry Summers is the other member of the three-person board, which will reportedly vet a new set of up to nine permanent directors who will have the task of resetting OpenAI's governance. One of those board seats is said to be earmarked for Altman, while Microsoft is set to take one.

"I love OpenAI, and everything I’ve done over the past few days has been in service of keeping this team and its mission together," Altman said after the news of his return broke. "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]." Altman added that when he decided to join Microsoft on Sunday evening, he felt at the time that "was the best path for me and the team."

"We are encouraged by the changes to the OpenAI board," Nadella wrote on X. "We believe this is a first essential step on a path to more stable, well-informed, and effective governance." Other OpenAI investors, such as Thrive Capital, were pleased about Altman's return, as was Shear.

"I am deeply pleased by this result, after ~72 very intense hours of work," Shear wrote. "Coming into OpenAI, I wasn’t sure what the right path would be. 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." In a nod to his time at Twitch and that platform's speedrunning community, Shear joked that he'd zipped through his time as OpenAI CEO in 55 hours and 32 minutes.

Many OpenAI workers went to the company's office to celebrate Altman and Brockman's return. At one point during the party, a smoke machine was said to have triggered a fire alarm.

Altman and Brockman may not have too much time to enjoy their stunning comeback before it's back to serious business, though. It also emerged on Tuesday that yet another lawsuit has been filed alleging that OpenAI didn't gain permission from rights holders before using their intellectual property without permission to train its generative AI models. In this case, a group of non-fiction authors say OpenAI did not compensate them for feeding their books and academic journals into its systems.

This article originally appeared on Engadget at https://www.engadget.com/what-is-going-on-with-openai-and-sam-altman-215725312.html?src=rss

Cruise co-founder resigns following CEO exit

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Cruise, the self-driving car company owned by General Motors, confirmed to Reuters that its co-founder and chief product officer Daniel Kan has resigned. Kan’s departure comes just a day after the company’s CEO Kyle Vogt announced his resignation on X after a 10-year tenure. Kan is said to have announced his resignation over Slack, however, the reasoning for his departure has not been made clear by the company.

The company’s executive reshuffling follows a public relations nightmare that started last month when a Cruise robotaxi hit a pedestrian in San Francisco and pinned them under the vehicle. The parent company, GM, is still conducting a safety probe on the accident and both autonomous and manual vehicle operations at Cruise remain suspended. The company’s public image has been reeling from the accident ever since, and about 950 robotaxis had to be recalled by GM. The California DMV suspended Cruises’ driverless permits shortly after, and that ruling has remained in place.

In a recent tweet, Cruise said that the company is focused on taking steps “to rebuild public trust.” Things have yet to look up for the company, especially after an expose by The Intercept revealed that the company knew its self-driving cars have trouble recognizing children and large holes in the roads. Furthermore, the former CEO said that the company would have to lay off an undisclosed number of employees and staff members in a memo.

Cruise has not made any statements about finding replacements for either its CEO or chief product officer as of yet. The New York Times reports that “instead of installing a new chief executive” General Motors has appointed two new members to the company board and Mo Elshenawy, Cruise’s executive vice president of engineering, will take up the role of President.

This article originally appeared on Engadget at https://www.engadget.com/cruise-co-founder-resigns-following-ceo-exit-214747271.html?src=rss

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