OpenAI News, For Profit Changes, Billionaire Beef

Today on the pod, we are visiting this open AI becoming a for-profit entity. I mean, I'm so curious to get Jaden's take on this. Jaden has been doing a lot of talking on this on some of his other podcasts, I know. But I don't know. I don't know how I feel about this because I don't have a strong opinion on it. And I sort of like feel like I should because I'm not sort of like so torn up about this fact. Like I just want AI to work well. One of the interesting things to me about it is that Microsoft, I think, gets a great deal out of this. They now have 27% stake in OpenAI Group, which is the new name of the group. Microsoft's stake is now valued, Jaden, at $135 billion. Okay, can we just remember back when OpenAI needed the compute, they needed the partnership with Microsoft. It was a great thing. This was 2023, right? I mean, then Microsoft invested, I believe it was $10 or $12 or $13 billion or whatever, invested in that. That is a return on investment, friends. The other strange thing is just to be the largest shareholder in what is essentially your competitor. I will also say this before I turn it over to Jaden, doing a lot with Microsoft. Microsoft is coming out of the gate with some phenomenal stuff, and I love how they're leading on this charge. I really, really do. I think that they're doing some great stuff in terms of how Mustafa Suleiman is talking about seemingly conscious AI, what they've said about not having romantic entanglements with CoPilot and things like that. I just like where they're going, but they're also doing some other cool things, which are, I was about to say some stuff, but I think it's under embargo right now. But anyway, Microsoft is coming out with some cool things and owning a giant chunk of OpenAI. Jayden, sort of thoughts on this whole, like, nonprofit to for-profit. People are losing their minds about this, maybe understandably, or the Microsoft angle. Where do you go with this? Like, generally speaking, I think it was shady and dishonest, basically. um and my nad brought it forever like yeah so use open ai as my primary model right now although maybe that will shift to anthropic more uh depending on some of the stuff they do but um yeah i mean at the end of the day it's the best ai model so i think we'll we'll keep rolling with it was it was it kind of slimy yeah will that like tarnish their image probably like long term i don't know but yeah i think it's forever going to be a black mark and point against them that they'll just have to oh you know what i mean like companies kind of just yeah these yeah baggage but it's also on the path to Sam Altman's world domination. So it's inevitable and I understand, right? Conquer the world, you got to, you know, conquer the world. So one thing that I do think is interesting here, though, that I will give them props for saying like this is, I don't know, like a justifiable or I guess it's a useful thing. A lot of people recently saw the news that OpenAI and Amazon made a $38 billion cloud computing deal. OpenAI is buying, it's over seven years, but it's $38 billion with AWS to power their stuff. What's interesting that not a lot of people know about this particular deal is that this is only truly possible because of this restructuring deal and them being able to get out of the way of Microsoft. So part of the deal now, when Microsoft came in and put in $10 billion right after chat GPT launched and essentially got 49% of the company or the company, the nonprofit, what a great investment or donation, I have to say charitable donation. When they did this there was a line in there where they had to have the final say in approval on all cloud computing contracts opening I signed in the future And the idea behind this is like, look, we're giving you $10 billion. We want you to use Microsoft Azure to power all of your AI models and to do everything that you're doing. And so, you know, they give them the money. The money comes back from Microsoft, boosts their cloud thing. That's kind of how they justified it. And, you know, the rest was history. And now we have the giant circular AI bubble of everybody paying each other and then paying it back to, you know, NVIDIA giving you money. Then you buy NVIDIA chips and whatever. Yeah, the situation in the bubble. That was Microsoft and OpenAI kind of started that. What's interesting is now that they are a for-profit company, they've kind of completed that. They don't need Microsoft and they were able to go ahead and do this big $38 billion deal. Now, I know they've signed a lot of other deals in the past before, but they were a little bit trickier. And you notice they did a lot where they were building the infrastructure, right? When we talk about like the $300 million data center build out with Oracle and SoftBank, that was them like building out data centers. And of course, NVIDIA is going to supply chips for it and yada, yada. But like they had to go build that. And I wonder how much of that is because they were their hands were sort of tied for making a deal with the number one data provider or cloud compute provider, which is AWS. Allegedly, according to what they said here, they needed to be for profit to do this. So like if there's kind of those stipulations that are slowing down their company, I get it. At the end of the day, though, they're going to have to just build out a ton of infrastructure because like not even close to enough infrastructure exists. There's a whole problem of energy. There's so many different problems to solve. So, yeah, like, I get it. If there's things that were holding them back, I see why they would do it. Was there other ways around it? Of course. Is it shady? Yeah. Will Elon Musk be able to complain forever that he gave them $100 million for a nonprofit? They turned it to a for profit? Yes. We'll just never hear the end of that. But at the end of the day, I think there are some, like, reasons that made the company better to justify it. I don't know. But, like, there's reasons. Yeah, I guess. And by the way, I totally understand why people would be up in arms about this. I agree with you. It's just totally shady. It just is. I mean, I don't know how you get it. I think people inside OpenAI would even probably say like, you know, but you know, but what are the choices we have? It's kind of the same thing. I think a little bit with Anthropics, sort of their model, this long term benefit trust or whatever it's called, like they have this kind of like weird models, the same thing that blew up OpenAI when they only had a few board members and they ousted Sam Altman. And I think, you know, Anthropic still sort of has that internally. I've talked to people in Anthropic. They're not worried about it. I mean, like the high level people. So I trust them. But all these companies, Jaden, started off so freaking weird, right? They all started off as like nonprofits and not even a public benefit corporation, which is what OpenAI is now. They started off as these like, oh, well, we're not going to do anything. Jaden, one of the things that I'm so kind of like almost relieved about to have this off my mental plate is remember this whole original terms and conditions around Microsoft and OpenAI, when it hits AGI, Microsoft will no longer have access to the models. Remember this whole thing? And that was the idea that when this thing kind of becomes, quote, too powerful for a company to control because it's going to overwhelm society or whatever, then of course, Microsoft shouldn't control it. OpenAI won't either. We'll turn it over to the local law enforcements and everybody will be sort of like happily ever after It completely and utterly insane And Jaden I want to remind us of something here This was three years ago less It was like two and a half years ago that all this happened When people say to me all the time so I out kind of like you know I work with big companies like driving AI adoption at scale, right out in the world. And I get asked all the time, where do you think this is going in, you know, three, four or five years? I'm like, I have absolutely no idea. Because if you think about this, open AI is about to spend 10, sorry, a trillion dollars over the next decade on infrastructure. That's one company. One company is going to spend a trillion dollars in infrastructure. That is not even the biggest. I mean, we're talking like there's Google out there. There's Microsoft out there. There's Anthropic out there. There's like, you know, essentially Elon Musk, which is his own thing. You have Amazon that owns, you know, that invested $10 billion or whatever it's been now in Anthropic. And now they're doing the, again, these models to me, when you see one side, this is an AI bubble that's going to burst. I'm like, totally. On the other side, this is an AI thing that's going to go on forever. I'm like, totally. I don't know where we're going to land. And also when people say this is an AI bubble, it's terrible. We talk about the dot-com bubble. That doesn't mean dot-coms are not valuable. It just means that there's going to be some big, big, big losers in this. But that's the thing. It's not like somebody is going to be out on the street. It just means a lot of investors are going to lose a lot of money. I don't know who that is, but there has to be consolidation at this point. But I'm just relieved that we have, like, again, sorry. I know that I should be more up in arms about this, but I'm just kind of like relieved that we've that we've gotten through the hurdle of like AGI is coming. When that happens, let's all treat this in a different way. We are now turning this into business. I want Anthropic to do the same thing with their board, by the way. I don't know if they will, but we're just going to sort of like watch this play out as it should, which is a corporate process that plays out. OK, I totally agree with you. And I think we'll have to wait and see what happens there. I mean, with the bubble, I think, like, part of me also doesn't really believe it's ever going to end super soon if the humanoid robots come around because we're going to need so much computer, so much AI to empower them. And I 100% want a humanoid robot to clean my house for me. Oh, I need one. But before we get into all of that, we have to talk about the drama between Sam Altman and Elon Musk this week because it also pertains to this whole conversion thing. So over on Twitter, Sam Altman, he was the one that started the fight this time. Shots fired. Elon's getting ready to launch a new Roadster product reveal. So he screenshotted himself. He said, a tail in three acts. It's like a picture of his Roadster order from... This is Sam Altman. This is Sam Altman's tweet, yeah. Yeah, Sam Altman's tweet, his Roadster order from 2018. And he put down $45,000 as a reservation. This is seven years ago. The Roadster has not come through. So then he did a screenshot where he's like, hi, I'd like to cancel my reservation. Can you please refund my 50K? Which was a minute ago. Or sorry, I mean, that was when the screenshot was taken, which it's basically today. And then the third screenshot was your message wasn't delivered to reservations at Tesla.com because the address couldn't be found. Anyways, so, you know, he's like, it took my money and won't even refund me. Whatever. Elon, of course, responds. And he said, you stole a nonprofit, which is hilarious. And then he also said, you forgot to mention Act 4 where the issue was fixed and you received a refund within 24 hours, but that's in your nature. So, ooh, the claws are out. The boys are battling over the nonprofit. It interesting there Sam Altman has a rebuttal for the stolen nonprofit He says I helped turn the thing you left for dead into what should be the largest non ever You know as well as anyone a structure like what OpenAI has now is required to make that happen So he's defending it. Also, apparently Elon Musk left it for dead. He only gave it $100 million and left it for dead. He's just going to die without him. His is all so funny to me. he does bring up a good point and then I have to read you a couple of the memes his other point he said was you also wanted Tesla to take open AI over non-profit or no non-profit at all you said we had a 0% chance of success and now you have a great AI company and so do we can't we all just move on I just love that no don't move on never move on we need all the drama in the world so a lot of people yeah a lot of memes a lot of funniness but basically the billionaires are fighting again and my favorite thing was Sam Altman's brother Jack Altman replied to the original like complaining about the $50,000 tweet and he said you can't be worrying about $50,000 like this and it's a picture of Sam Altman where he said like whether we burn 50 million or whether we burn 500 million 5 billion or 50 billion a year I don't care and then Sam Altman replied little brother energy is the worst so anyways it's all hilarious to me it's all an insane amount of money that most people can't even comprehend or fathom but it does get to the root of the problem there is obviously some drama and i don't think elon musk and sam allman will ever stop beefing over the beginning of i i think i again i i'm just glad that i only close out on a second gene but just last thought from me which is i'm just glad that it is now it just feels more honest now it feels like everybody's sort of like come out and said this is what we are no more hiding behind like you know we just want good for humanity, all that kind of stuff. Maybe they do. I actually think these companies are focused on that to a certain extent because it's good for their brand. It's good for, you know, enterprise. I don't think Rock is going to get into many enterprises because they don't care about that stuff. I think OpenAI probably will. But I guess I'm just glad that now it's like, let's just call this what it is. Everybody has. We can all get mad. But this was never a non-profit. It was crazy to call it that. Anyway, all right, Jaden, take us out. Yep, 100%. And then it just makes Sam Altman's Senate testimony of doing it because he loves it. A little disingenuous, but whatever. It's fine. It's hot. If it's a company, it's fine, whatever. I spend money there and I appreciate the product. So I can't complain too much. All right, guys, thank you so much for tuning in. The one thing I will mention, right, we talk a lot about AI and how it's getting applied to businesses and a lot of the changes. And a lot of people ask us, you know, what's the best way that they can make sure that they're upskilling themselves and their organization. A lot of business leaders ask us specifically. And the number one thing I always recommend is going and checking out Connor's AI Mindset course. Some organizations buy 10,000 seats for everyone in their whole company to get access to this because they just see how huge the value is for upskilling the organization. So if you have an amazing organization, if you're a leader at an amazing organization, this is one of the best things I think you can do to show your AI leadership is to go and get access for everyone in your department or your organization to Connor's Mindset course. It will 100% have an incredible ROI on your organization, be more productive and taken an advantage of AI so you don't miss out on it. All right. Thanks everyone so much. There's a link to the AI mindset course in the description. We'll catch you guys all in the next episode.