The backlash against A.I. seems to be building in real time. The former chief executive of Google, Eric Schmidt, was booed giving a commencement speech this month. The home of Sam Altman, the C.E.O. of OpenAI, has been attacked multiple times. The pope weighed in this week with an encyclical, warning Silicon Valley to put humanity first.
This is the context in which three major A.I. companies — OpenAI, Anthropic and SpaceX, which includes xAI — are expected to go public soon. Their pending initial public offerings, all anticipated within the next few months, are likely to be some of the largest market debuts in history. That also means a lot of people will be getting very wealthy from a technology that many fear could lead to mass unemployment. Today I’m talking to my colleague Mike Isaac, who covers Silicon Valley, about this potent mix.
Big money, big backlash
Mike, at a very basic level, why are these I.P.O.s happening? These are rich companies, right? Why are they raising even more money?
For A.I. companies to continue growing and building the things they want to build, they need computing power — that’s the hardware and the chips and the energy and all of the things that go into a data center. Computing power — or compute, as A.I. people call it — is incredibly expensive. Then they have to pay their engineers these enormous salaries. And so the amount of money companies like SpaceX or OpenAI or Anthropic burn through is astronomical. We’re talking in the billions of dollars per month, not per year. Their revenue streams just aren’t enough.
We’ve been talking for a while now about whether we’re in an A.I. boom or an A.I. bubble. Will these I.P.O.s give us a clue?
Companies that are going public have to disclose a lot. Which means we’ll get a chance to look under the hood a bit, see the finances of companies like OpenAI and Anthropic, and might be better equipped to judge their business models.
The A.I. boom is being propped up by a lot of big promises at the moment, and this technology is obviously fascinating. But we’re still waiting for these companies to cross the Rubicon where they stop being cash-burning machines and find ways to be self-sustaining. The I.P.O.s probably won’t definitively answer the question of whether this boom is in fact a bubble, but they’ll give us more information.
These debuts are coming at a time when the politics of A.I. have become touchy.
There’s absolutely a backlash. Sentiment about A.I. is pretty negative these days and it’s very possible that the I.P.O.s intensify that. A lot of people worry about this technology taking their jobs. People also don’t like data centers that are now being built everywhere. They think they’re ugly and power hungry.
So you see some people going to a town hall and saying, “We don’t want this in our backyard,” but you also see some people who are really angry — like, throw a Molotov cocktail at Sam Altman’s house kind of angry.
How legitimate are these concerns? What do we know about A.I. actually taking human jobs?
The tech sector tends to lead the pack in terms of how to incorporate A.I. into the workplace, so they’re a leading indicator of where other sectors might be going. And if that’s the case, it’s looking a little bleak.
Meta just laid off 8,000 people. Google has these rolling layoffs now. My suspicion is the rest of the corporate world sees this and thinks, “OK, we’ve got to do this,” because everyone sort of follows tech’s lead, and every C.E.O. always wants to look at head count and see how they can become more efficient. Why pay 10 engineers when you can pay one person to use a robot? And so I think we’re just at the beginning of this process.
How are policymakers thinking about how to handle what’s coming?
So far, the Trump administration has been fairly positive about A.I. — you know, thinking: “We need to embrace this. It’s the future.” They’re worried about putting in place regulation that could hurt these companies in light of the ongoing competition with China. But I wonder if that’s going to change now that feelings about A.I. are shifting. We might start hearing more talk about regulation.
The thing is, even if A.I. never develops to the point the tech companies are promising — even if we don’t get to artificial general intelligence, machines that are smarter than humans at everything — it’s still going to change the way we live in a lot of ways. It already has.
At least it seems that policymakers are thinking about the implications of this now. Most feel like they were behind when it came to social media regulations. They don’t want to be behind again.
Related: Anthropic raised $65 billion in new fund-raising that put its valuation at $900 billion, surpassing OpenAI as the world’s most valuable start-up.
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At 83, McCartney is genial, unpretentious and still amazed at his life as a musician, Jon writes. “I’m just some kid who went to school, went to the careers master who said to me, you know, ‘You haven’t got qualifications and, there’s not … I don’t see a great future for you,’” McCartney said. Read the full interview.
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BEFORE YOU GO …
I’m at the Hay Festival in Wales, which is one of my favorites. It’s that rare festival of ideas that combines world-class conversation with genuine warmth and understatement.
Hay is like the anti-Davos. There’s hardly any security and no entrance fee. Instead of bodyguards and advisers, speakers bring their children. Depending on the weather, the dress code is flip flops or Wellingtons.
Bill Clinton has called it the “Woodstock of the mind.” When I wrote about Hay in 2015, I said it democratizes inspiration. It’s more human than most other idea fairs.
Apropos human: One of the speakers I saw was Nate Soares, co-author of “If Anyone Builds It, Everyone Dies.” He argues that if world leaders don’t come together to ban or at least slow down the race to build superintelligent machines, those machines are very likely going to kill us all.
Another highlight was Alan Davies performing standup comedy on middle age (you know, statins, Viagra, television references from the 1980s), which included a moving segment on losing his mother when he was 6 and sending his dad to prison for sexual abuse.
But my favorite moment from this year was unknowingly sharing a shuttle with Mel Giedroyc, a very famous British broadcaster, according to my British husband. (She co-hosted “The Great British Bake Off,” among many other things.)
I am German. I don’t bake. I had no idea. What do you do? I asked. She said, “Oh, you know a bit of telly.”
It was very Hay.
I’ve been walking the festival site with Janet Kay’s “Silly Games” in my ear. It’s the perfect anthem for a sunny weekend.
Have a good one! — Katrin
TIME TO PLAY
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Katrin Bennhold is the host of The World, the flagship global newsletter of The New York Times.
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