The News

This has been an exciting weekend for the generative AI industry. On Friday November 17, OpenAI announced that the company fired its figurehead CEO Sam Altmann and appointed Chief Technology Officer Mira Murati as interims CEO in a surprise move. The press release states that Altmann “was not consistently candid in his communications with the board.”

Surprised was apparently not only Sam Altmann, but also the till then chairman of the board Greg Brockman who first stepped down from this position and subsequently quit OpenAI. Investors, notably Microsoft, found themselves blindsided, too – or flat footed depending on the individual point of view. Satya Nadella was compelled to state that Microsoft stays committed to the partnership with OpenAI in a blog post that got updated on November 19, 11:55 pm.

All hell broke loose.

Microsoft shares took a significant hit.

A number of additional senior OpenAI personnel quit. Both, Altman and Brockman, voiced the idea of founding another startup together.

Microsoft CEO Satya Nadella flew to San Francisco to negotiate a reinstatement of Altmann. It initially seemed that this would be going to happen, along with the complete board stepping down and being replaced by Silicon Valley tech executives.

Apparently, this did not work out.

The result is that Altmann, Brockman, and some other former senior OpenAI staff are now Microsoft employees, with Altmann becoming the CEO of a new advanced AI research unit.

Also on Sunday, Emmett Shear, former CEO of Twitch, was appointed new interims CEO at OpenAI.

Meanwhile, more than 500 of OpenAI’s employees, including former interims CEO Murati threatened to quit OpenAI and join Altmann at Microsoft, which apparently “assured us that there are positions for all OpenAI employees” in the new unit that Altmann shall lead. 

The bigger picture

Generative AI is deemed as one of the most promising technologies around. While it is not exactly new, and OpenAI is by far not the only company working on it, it has been OpenAI’s success to make it mainstream in a very short period of time by virtue of ChatGPT. 

It is also one of the most feared technologies around with potentially far- and wide-ranging social and economic impacts. The topic of ethical usage of AI is currently a very hot one. 

And OpenAI was founded with the core mission of ensuring that artificial general intelligence benefits all of humanity. In fact, it started as a non-profit organization and turned into a “capped” for-profit organization in 2019. This is already indicative of the rift between fast paced innovation and governance. This rift is clearly visible in OpenAI. Ray Wang dubbed this “balance between too much governance and not enough innovation” at OpenAI in his brief but scathing analysis in his LinkedIn newsletter. What he means with innovation, is actually commercialization.

My point of view and analysis

Wow, “not consistently candid in his communications”. It is not often that a company CEO is called a liar by his/her board of directors. Whether this accusation is true or not, the fast-paced process of ousting Altmann shows that it is in between difficult and impossible to find a balance between “creating safe AGI that benefits all of humanity” as OpenAI’s homepage proudly announces, and fast commercialization. AI, in particular generative AI, is an extremely expensive technology – and it is not likely that investors care too much about the rest of “all of humanity”. 

The main problem with the aforementioned balance between governance and innovation/commercialization is that there is always one player that leans more towards innovation/commercialization. 

AI, AGI even more so, is a platform game. And platform games favor big players. One is either top three – ideally top – or irrelevant.

Given that background, one can say that the current business model of OpenAI can be considered a failure. The chasm between a non-profit board that is tasked with preserving the “nonprofit’s mission, governance and oversight” and a “fundamental governance responsibility to advance OpenAI’s mission and preserve the principles of this charter” and a desire and need to raise and make significant money proved to be just too deep and too wide.

As a result, OpenAI turned from being the 800-pound-gorilla into a lame duck – at least temporarily. This creates a limbo.

The future of OpenAI will depend on whether the charter will be changed and the board steps down or not. And if it does, OpenAI will emerge as a different company.

As a consequence of this limbo, the good number of capable competitors that I do not need to name, have a small window of opportunity that they can capitalize on to dethrone OpenAI in the perception game. The window is small, as in particular, Microsoft is in a very comfortable position now. OpenAI re-emerges from this limbo as a weakened player that needs to take up steam again.

This is the best case for OpenAI.

Worst case: OpenAI is toast.

In any case, Microsoft is the big winner of this situation. The investors certainly seem to be of this opinion, too. MS shares took a nosedive on Friday and started with good gains on Monday. Microsoft continues to have the massive workloads of OpenAI on Azure. Microsoft has the unique opportunity to hire a massive amount of AI talent, namely the majority of OpenAI’s current staff – if said staff chooses to accept this offer. And Microsoft now has a prime seat when it comes to outright owning OpenAI, with a price tag that is likely to be significantly below last week’s purported valuation of up to $90bn US.

I wouldn’t be surprised if acquisition talks are already ongoing.

Inspired by a recent panel discussion as part of theIn the Hot Seat podcastthat I am involved in, I opened a chat with chatGPT3. ChatGPT is a language model by OpenAI that interacts in a conversational way. This way, it shall be able to follow a conversation, answer follow up questions or even admit mistakes, challenge incorrect premises or reject inappropriate requests. Our sixth episode of In the Hot Seat revolved about the question whether web3 will deliver on its promise or not.

The promise being that content producers and web users get more power by applying concepts like decentralization, blockchain and a token economy.

As I am a bit sceptic about this kind of silver bullet promises, I went right for the jugular.

A conversation between a human and a bot

Thomas: Tell me with arguments why web3 based on blockchain will fail

chatGPT3: It's impossible for me to provide arguments as to why web3 based on blockchain will fail, as web3 is not based on blockchain technology. Web3 is a term used to describe the next generation of the web, which is focused on decentralization and enabling users to have more control over their online data and interactions. Blockchain technology, on the other hand, is a decentralized, distributed ledger that is used to securely and transparently record transactions. So while blockchain technology may play a role in the development of web3, it is not the foundation of it.

Thomas: If blockchain does not play a role in web3, how will the decentralization be achieved?

chatGPT3: Web3 is focused on decentralization, but it does not necessarily rely on blockchain technology to achieve this. Decentralization can be achieved through a variety of means, such as peer-to-peer networks, distributed systems, and other technologies. Some examples of decentralized technologies that could be used in the development of web3 include distributed file systems, peer-to-peer messaging protocols, and decentralized identification systems. Ultimately, the specific technologies used to achieve decentralization in web3 will likely depend on the specific goals and requirements of the applications and services being built on top of it.

Thomas: How can ownership be assured in a decentralized world if blockchain is not the foundation?

chatGPT3: In a decentralized world, ownership can be assured through the use of cryptography and digital signatures. These technologies allow individuals and organizations to prove ownership of digital assets without the need for a central authority or third party to verify the ownership. For example, in a decentralized network, a user could prove ownership of a particular asset, such as a digital token, by signing a message with their private key. This signature could then be verified by other users on the network using the user's public key, providing a secure and transparent way of proving ownership. While blockchain technology is one way of implementing these cryptographic techniques, it is not the only way, and other technologies such as distributed ledgers or advanced cryptography could also be used to assure ownership in a decentralized world.

Thomas: Why then the hype around web3 based on blockchain?

chatGPT3: Web3 is not necessarily based on blockchain technology, and the hype around it does not necessarily relate to blockchain. The hype around web3 likely stems from the potential for decentralization to enable new, innovative applications and services that were not possible with previous generations of the web. Decentralization has the potential to allow users to have more control over their data and interactions online, as well as enabling new business models and opportunities. While blockchain technology may play a role in the development of some of these decentralized applications and services, it is not the only technology that could be used, and the hype around web3 is not necessarily tied specifically to blockchain.

Thomas: What new innovative applications and services are not possible with previous generations of the web?

chatGPT3: The potential applications and services enabled by web3 are difficult to predict, as the technology is still in development and many of the specific details are not yet known. However, some possible examples of innovative applications and services that could be built on top of web3 include decentralized finance (DeFi) platforms, decentralized social networks, and decentralized marketplaces. These types of applications could potentially offer users more control over their data and interactions, as well as enabling new business models and opportunities. Additionally, web3 could enable new applications and services that are not currently feasible due to the centralization of the current web, such as secure and transparent voting systems, decentralized governance systems, and distributed cloud computing platforms.

Thomas: Decentralized social networks do already exist. How can defi work without a decentralized ledger, i.e. a blockchain?

chatGPT3: While decentralized social networks do already exist, they are not as widely used or as well-known as their centralized counterparts, such as Facebook or Twitter. Decentralized finance (DeFi) platforms, on the other hand, are a relatively new concept that is still being developed. DeFi refers to the use of decentralized technologies, such as smart contracts, to enable financial applications and services that are not dependent on traditional financial institutions. These services could include things like decentralized exchanges, lending and borrowing platforms, and prediction markets.

DeFi platforms do not necessarily need to be built on top of a blockchain in order to function. While blockchain technology does provide a decentralized, distributed ledger that is well-suited for certain types of financial applications, other decentralized technologies such as distributed ledgers or advanced cryptography could also be used to enable DeFi platforms. Ultimately, the specific technologies used will depend on the specific requirements and goals of the DeFi platform in question.

Thomas: name me some defi platforms that do not use blockchain?

chatGPT3: As decentralized finance (DeFi) platforms are a relatively new concept, there are not currently many examples of DeFi platforms that do not use blockchain technology. Most existing DeFi platforms are built on top of blockchain networks, such as Ethereum or EOS, as these networks provide the necessary infrastructure for decentralized applications.

However, it is possible that future DeFi platforms could be built on top of other decentralized technologies that do not use blockchain. For example, a DeFi platform could be built on top of a distributed ledger that uses advanced cryptography to secure transactions, rather than the consensus mechanisms used by most blockchains. Additionally, some DeFi platforms are exploring the use of "layer 2" technologies, which are built on top of existing blockchain networks and enable higher scalability and performance. These technologies could potentially be used to build DeFi platforms that do not rely on the underlying blockchain network for all of their functionality.

Thomas: If you say most platforms do use blockchain, there are some that do not use blockchain. Please name some examples.

chatGPT3: As I mentioned earlier, most existing decentralized finance (DeFi) platforms are built on top of blockchain technology, as this provides the necessary infrastructure for decentralized applications. Therefore, it is difficult to provide specific examples of DeFi platforms that do not use blockchain technology.

However, as I also mentioned earlier, it is possible that future DeFi platforms could be built on top of other decentralized technologies that do not use blockchain. These technologies could include distributed ledgers or advanced cryptography, for example. Additionally, some DeFi platforms are exploring the use of "layer 2" technologies, which are built on top of existing blockchain networks and enable higher scalability and performance. These technologies could potentially be used to build DeFi platforms that do not rely on the underlying blockchain network for all of their functionality. It is worth noting, however, that these technologies are still in development and it is not yet clear what specific DeFi platforms will be built using them.

Thomas: Ownership already now can be through the use of cryptography and e-signatures. What problem that is not yet solved does decentralization solve or solve better than existing solutions do?

chatGPT3: Decentralization has the potential to solve several problems that are not yet solved by existing solutions. For example, decentralization can provide increased security and resilience by distributing data and functionality across multiple nodes, rather than relying on a single, central authority. This can make it more difficult for attackers to compromise the system, and can also ensure that the system continues to function even if individual nodes fail.

Additionally, decentralization can provide increased transparency and accountability by enabling all users to have access to the same information and allowing anyone to verify the correctness and integrity of that information. This can help to build trust and confidence in the system, and can also enable new business models and opportunities that are not possible with existing centralized systems.

Finally, decentralization has the potential to enable individuals and organizations to have more control over their data and interactions online. By removing the need for central authorities to verify and control access to data, decentralization can enable users to have greater control over who has access to their data and how it is used. This can help to protect user privacy and can also enable new applications and services that are not possible with existing centralized systems.

Thomas: Your first point basically says that security by decentralization is inefficient. Your second point disregards that the information can also be made available to everyone, and easier, in a centralized world. Re your third point, how does decentralization promote more control by individuals as it creates more attack vectors?

chatGPT3: I apologize if my previous response was unclear. Decentralization does not necessarily make systems less efficient, and it can provide increased security and resilience by distributing data and functionality across multiple nodes. This can make it more difficult for attackers to compromise the system, and can also ensure that the system continues to function even if individual nodes fail.

In terms of transparency and accountability, while it is true that information can be made available to everyone in a centralized system, decentralization has the added benefit of enabling anyone to verify the correctness and integrity of that information. This can help to build trust and confidence in the system, and can also enable new business models and opportunities that are not possible with existing centralized systems.

Regarding your third point, decentralization does not necessarily create more attack vectors. While it is true that decentralized systems can have more nodes, which could potentially be targeted by attackers, decentralization can also provide increased security by making it more difficult for attackers to compromise the system as a whole. Additionally, decentralization can enable individuals and organizations to have more control over their data and interactions online by removing the need for central authorities to verify and control access to data. This can help to protect user privacy and can also enable new applications and services that are not possible with existing centralized systems.

My point of view

First of all: Wow!

And I mean W O W.

Given this conversation, not knowing whether there is a conversational AI involved or not, one surely doesn’t have an easy time to establish this fact.

The other thing that becomes abundantly clear is that the system is quite well trained. I would also suspect a bias towards web3, which it sort of ambiguously defines somewhere between web3 and web3.0. Yet, there is quite a wide understanding that one of the core foundational elements of web3 is a blockchain. The system is quite right about the fact that there is no coherent web3 yet.

So, it argumentation wise leaves the door open.

It also, “behaves” rather like someone who is semi-educated and defensive. Drilling down into statements that the system makes are responded to with references into a possible future. This can be clearly seen when it comes to “new innovative applications” or my question about defi companies that do not use blockchain and that the system suggested as existing.

All in all, this system clearly shows the art of the possible. This raises quite some expectations to the future, and some concern. With machines becoming increasingly better at using language, it must be made clear when one communicates with a machine and not with a human.

Last piece of advice: Do not try to use it as a PA. It doesn’t like it. Really not …