Sunday Finds + Thoughts on OpenAI Firing Sam Altman
Sunday Finds + Thoughts on OpenAI Firing Sam Altman
Using pattern matching to avoid investing in shady characters
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Thoughts on OpenAI Firing Sam Altman
Altman is out as the CEO of OpenAI. We don’t need to rehash what happened or why the board decided to make an abrupt change. I’ll let the journalists and proper news organizations explain that.
A lot of people seem shocked that Altman crashed and burned. I am not one of them:
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Am I sharing this to brag? Yes, of course. I love being right about things, which is what draws me to picking stocks. But there is also a lesson here.
Investing in stocks generally requires you to put trust in management teams. You want to avoid shady characters, people who will steal from you, and executives who look to enrich themselves at the expense of shareholders. Focus on not losing money, etc, etc.
Luckily, shady characters all exhibit similar traits, making pattern-matching useful. Not all people who exhibit these traits are shady, but most shady business leaders exhibit these traits.
Pattern matching led me to have a bad feeling about Sam Altman. It was pretty easy, all you had to do was actually read what he was doing and saying.
Some examples:
His goal, he said, is to forge a new world order in which machines free people to pursue more creative work. In his vision, universal basic income—the concept of a cash stipend for everyone, no strings attached—helps compensate for jobs replaced by AI. Mr. Altman even thinks that humanity will love AI so much that an advanced chatbot could represent “an extension of your will.”
In the long run, he said, he wants to set up a global governance structure that would oversee decisions about the future of AI and gradually reduce the power OpenAI’s executive team has over its technology.
Altman is also a backer of nuclear-fusion startup Helion Energy, which signed a deal with Microsoft, believed to be the first commercial agreement for fusion power. Nuclear-fusion systems such as Helion’s would theoretically generate electricity from the energy released when hydrogen and helium are combined, the process that powers the stars. Microsoft has agreed to purchase electricity from Helion within about five years.
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Rewind, another AI startup that Altman has invested in, offers a $59 device worn like a necklace that can record conversations and transfer the recordings to a phone. AI then transcribes and analyzes the recorded conversations.
OpenAI’s Altman was Humane’s co-lead investor in an early investment round in 2020 and continued his investment in the company’s most recent $100 million round earlier this year. In addition to Altman’s investment in Rewind, he reportedly has had talks with Jony Ive, former Apple chief design officer, about a separate AI device. The tech news site The Information and other outlets earlier reported on those discussions.
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Apple’s former chief design officer, Jony Ive, is reportedly in discussions with OpenAI to build the “iPhone of artificial intelligence,” aided by over $1 billion in funding from Softbank CEO Masayoshi Son. According to a new report by the Financial Times, OpenAI CEO Sam Altman is looking to use Ive’s design firm LoveFrom to develop OpenAI’s first consumer device, with the duo having discussed what such a product would look like during brainstorming sessions at Ive’s San Francisco studio. News of the venture was first reported by The Information on Tuesday.
(link)
Welcome to the rollout of Worldcoin, an AI-meets-crypto project from OpenAI founder Sam Altman that has stirred endless controversy. The startup uses orbs to scan people’s eyes in exchange for a digital ID and possibly some cryptocurrency, depending on what country they live in.
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So on top of running the most important start-up in the world and competing with the widest moat in the world (Google), Sam Altman is (was?) trying to take on Nvidia, payments networks and fiat currencies, Apple (!), as well as commercialize nuclear fusion energy. Call me crazy, but I think he is a bit delusional.
You’ll be shocked to hear that Buffett and Munger have discussed spotting shady corporate people. Here is a link to a transcript from an annual meeting when someone asked about spotting and avoiding fraud.
Some key quotes:
WARREN BUFFETT 01:46
Yeah. How many times have we been defrauded in the last 20 years?
CHARLIE MUNGER 01:49
Well, damn little that we can — it’s amazing how little.
WARREN BUFFETT 01:55
Yep.
CHARLIE MUNGER 01:55
And I’ve always said that the guy who takes us is going to have a modest little office and a modest demeanor and —
WARREN BUFFETT 02:01
He’ll carry around Ben Franklin’s autobiography, I can —
CHARLIE MUNGER 02:06
The kind of people who defraud us are not going to be the kind of people who are defrauding everybody else.
mean, we start out with — if somebody’s talking about EBITDA, you know — if we take all the people in the world that talk about EBITDA and all the people in the world who haven’t talked about EBITDA, there are more frauds in the first group, percentage-wise, by a substantial margin. Very substantial. I mean, it is, you know, it’s just a start.
We have read — I mean, Charlie and I have — it’s a hobby keeping track of the Maxwells of the world, and the —
They get — there’s a syndrome. I mean, they give off a lot of the same messages.
See you next week,
Brett
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3 Intriguing Reads
The Elon Paradox - Fits and Starts
We’ll again start with a disclosure: I don’t care for Elon Musk, the person. I am a believer in ideas like paying it forward, and that we all emit either positive or negative energy into the world, making it a better or worse place. There is a pretty substantial trail of ruin in Elon’s wake.
That said, I do have great respect for Elon Musk the businessman. He has built a substantial empire from the ground up in areas that conventional wisdom believed such endeavors were doomed to fail. Critics scream about luck, fraud, and duplicity. I won’t begin to assure you that every moment of Elon’s career has been pure. But I would also note that I believe few titans are lilywhite and all corporate success stories involve some amount of luck. To throw out everything Elon has done to deception is naïve at best.
Insightful take on OpenAI and Sam Altman. For now, it seems that Nadella has tied MSFT's fortunes and perhaps his own fortunes to Altman's genius. It will be interesting to see how it plays out. Cheers!