‘We Are Not a Normal Company’: OpenAI’s Latest Drama

Sam Altman’s latest challenge

OpenAI has had more than its share of drama over the past year, even as it extends its lead in artificial intelligence.

But as ChatGPT’s parent company takes steps to become more palatable to outside investors, it has again lost senior leaders, including its prominent chief technology officer. It’s a reminder that while OpenAI is one of the most consequential highfliers in tech, it’s — as Sam Altman, its C.E.O., put it — “not a normal company.”

OpenAI is in the midst of a significant transition. As part of its efforts to raise one of the biggest fund-raising rounds in recent memory, pushing up its valuation to perhaps $150 billion, the company is moving to become a for-profit business, according to The Times and others.

That, along with removing the caps on returns that external investors can collect, would help resolve questions about how OpenAI is run. The company has already taken some steps to allay such concerns by forming a board that looks more like the typical corporation’s, after a previous set of directors briefly ousted Altman last year.

Speaking of Altman, he is also in talks to get an equity stake in OpenAI, after having previously said he didn’t need one, according to Reuters. Bloomberg reports that it could be for as much as 7 percent of the company, which would be worth about $10.5 billion if the start-up were to secure the valuation it is seeking.

But that transition will come amid another management reshuffle. Even OpenAI employees were reportedly surprised by Wednesday’s announcement that Mira Murati, the company’s star C.T.O., planned to leave after a more than six-year stint. (Two other executives, including the chief research officer, are also departing.)

A half-dozen OpenAI executives have already left this year, including Ilya Sutskever, the co-founder who initially pushed for Altman’s ouster, and other leaders who have questioned the company’s commitment to A.I. safety. Altman has since brought in Silicon Valley veterans for key roles, seemingly in part to show that OpenAI was growing up.

The stakes are high. Investors have pushed to get a piece of OpenAI because of its pace of innovation, including more advanced iterations of ChatGPT. But Altman has even grander plans for the company, which will require enormous capital.

OpenAI’s financial needs are huge: It spends about $7 billion a year on $3 billion in revenue. But the company has more expensive dreams, including creating a worldwide network of hugely expensive and energy-hungry data centers to power A.I. computing, The Times reports. That would be an effort that by the company’s own admission will cost “hundreds of billions,” and would almost certainly require buy-in from the world’s most powerful governments.

Some have questioned the feasibility of Altman’s goals, with several chip-making executives and government officials laughing at their scale. Others are worried that the OpenAI chief’s aims, including a willingness to work with the United Arab Emirates, put U.S. national security at risk.

That said, Altman is getting results. After meeting at the White House this week, President Biden and Sheikh Mohammed bin Zayed, the Emirati president, directed their governments to discuss ways to collaborate on A.I., something that the OpenAI chief has encouraged.

Such influence may be reason enough for investors to stick with OpenAI, despite all of the drama.

HERE’S WHAT’S HAPPENING

Congress passes a spending bill to avert a government shutdown. Lawmakers approved legislation that keeps federal funds flowing until Dec. 20, punting a fight over spending until after the November elections. But Speaker Mike Johnson needed Democrats’ help to pass the bill in the House, and congressional watchers predicted that the next spending battle will be acrimonious.

Benjamin Netanyahu pledges to keep striking Hezbollah despite an international cease-fire proposal. Even as the United States, European allies and Arab nations pushed for a plan to halt the new round of violence that has killed hundreds in Lebanon this week, several Israeli officials appeared to reject the initiative. Netanyahu, the Israeli prime minister, hasn’t explicitly ruled it out, but international leaders worry that the latest round of fighting could escalate into all-out war.

Google lodges an antitrust complaint against Microsoft in the E.U. In its filing, the search giant said that its rival had abused its dominance in corporate software to steer customers into also using its Azure cloud-computing platform. It’s the latest instance of the tech titans clashing after years of détente, as Google seeks to catch up with Microsoft and Amazon in the increasingly important cloud business.

The heat builds on the New York mayor

New York City politics plunged further into chaos on Wednesday after the revelation that Mayor Eric Adams had been indicted in a federal corruption investigation.

The news is the biggest challenge yet to Adams, whose administration has been ensnared in a series of inquiries into his inner circle. And for the city’s business leaders, it leaves the future direction of New York governance even murkier than before.

The latest: Charges against Adams are set to be introduced on Thursday, though the specific charges or charge are unclear. He is the first sitting mayor in New York City history to be charged with a federal crime.

The indictment comes after intensifying inquiries into Adams and top advisers on a variety of matters, including whether the mayor and his campaign conspired with the Turkish government to receive illegal foreign donations. Several top Adams officials, including the police and health commissioners, recently resigned.

The mayor now faces calls to resign, including from Representative Alexandria Ocasio-Cortez and from Scott Stringer, the former city comptroller who plans to run against Adams in next year’s Democratic mayoral primary. Adams was defiant on Wednesday, saying, “If I am charged, I am innocent, and I will fight this with every ounce of my strength and spirit.”

Other prominent New Yorkers defended Adams, including the billionaire financier Bill Ackman, who praised the mayor’s policies toward migrants. “Sadly I have to say I am that much more skeptical when indictments are announced against someone whose views are not welcomed by the party in charge,” Ackman wrote on X.

There’s no legal requirement that Adams resign, though Gov. Kathy Hochul could remove him, albeit via a complicated process.

The indictment could further shake up the mayoral race, as New York grapples with a huge budget shortfall, a homeless and migrant crisis, and an economy that hasn’t fully recovered from prepandemic levels. (That’s even before the discussion turns to rats and crime, two signature issues that the mayor ran on.)

Besides Stringer, declared and likely mayoral contenders include Brad Lander, the current city comptroller; Kathryn Garcia, who narrowly lost to Adams; and Andrew Cuomo, the state’s former governor.

What that means for the city’s business leaders is unclear. Both Stringer and Lander have built up reputations as progressives, while Garcia is regarded as more of a centrist.

In the interim, they’re probably concerned about what the legal drama means for the city’s security and public services.

“They’re not going to run out of cash anytime soon. So they don’t have to do anything while they sit and watch this consolidation in the industry move forward.”

— John Malone, the billionaire media tycoon, on the future of Warner Bros. Discovery, as relayed by analysts at MoffettNathanson. Malone expressed his support for David Zaslav, the company’s embattled C.E.O., who has presided over a 30 percent drop in Warner Bros. Discovery’s stock price over the past year and who has faced calls to strike a transformative deal to turn around the company.

Harris focuses back on the economy

With impressive speed, Kamala Harris has begun to win over voters who say they are increasingly concerned about the economy and their finances. Still, some polls show that Donald Trump leads her on that critical issue, making the vice president’s economic address on Wednesday a critical one as she pitches undecided voters in a deadlocked race.

The speech, before supporters like the tech billionaire Mark Cuban, was longer on vision than details. (She did, however, release an 82-page document, “A New Way Forward for the Middle Class,” outlining her positions.)

Here are the big takeaways:

• In a declaration that fit the setting at the Economic Club of Pittsburgh, Harris told supporters, “I am a capitalist” — perhaps trying to distance herself from Trump’s calls that she’s a “communist.”

• Harris said she wanted to foster greater ties with the business community, calling for “an active partnership between government and the private sector” to “fully unlock economic opportunity.”

• She reiterated other economic policy ideas, including tax increases on big corporations and tax breaks for small businesses and homebuilders.

• Harris pledged greater investment in emerging sectors such as artificial intelligence and blockchain technology.

• She wants tax credits to bolster union jobs. (That said, in an MSNBC interview on Wednesday, she mostly dodged questions on why the International Brotherhood of Teamsters, a traditionally staunch supporter of Democrats, opted not to endorse either candidate.)

She stressed the value of dialogue with business. Harris, whose top aides last week met with executives in areas including health care and crypto, underlined the Biden administration’s eagerness to engage with the private sector. “Part of being pragmatic means taking good ideas from wherever they come,” she said, adding, “I also know the limitations of government.”

Harris vowed to go after the bad actors. But she drew distinctions. “I believe that most companies are working hard to do the right thing by their customers and the employees who depend on them,” she said.

Wall Street backers were pleased. “She brings people together from the private sector to get their views as she is putting policy together,” Jon Henes, the founder and C.E.O. of C Street Advisory Group, who was Harris’s finance chair in her 2020 presidential bid, told DealBook. “Because she wants to make sure that the policies, when implemented, actually work.”

THE SPEED READ

Deals

• Google reportedly paid Noam Shazeer, a former executive and A.I. whiz, $2.7 billion to rejoin the search giant when his start-up floundered. (WSJ)

• One of Germany’s largest asset managers urged Commerzbank to begin talks with UniCredit, as the Italian lender continues to pressure its German rival about a potential a tie-up. (FT)

Elections, politics and policy

• Ireland revealed what it will do with the nearly $16 billion tax windfall that Apple must pay the country: address its housing crunch and bolster its energy grid. (Bloomberg)

• “Republicans’ Electoral College Edge, Once Seen as Ironclad, Looks to Be Fading” (NYT)

Best of the rest

• Meta introduced its first pair of augmented reality glasses at a product event, joining a growing list of companies seeking to take the technology mainstream. (The Verge)

• Why some Silicon Valley activists want to pump pollutants into the sky to battle climate change. (NYT)

• “‘All must be beheaded’: Revelations of atrocities at French energy giant’s African stronghold” (Politico)

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