Sam Altman To Microsoft, OpenAI In Flux — With Dan Primack

Dan Primack is the business editor at Axios and author of the daily Axios Pro Rata newsletter. He joins Big Technology Podcast to break down ex-OpenAI CEO Sam Altman's apparent move to Microsoft, whether he'll stay there, how the board structure enabled this, and how the competitive balance in the AI field shifts now. Stay tuned for the end, where we rate winners, losers, and a bold prediction from Primack. --- You can subscribe to Big Technology Premium for 25% off at https://bit.ly/bigtechnology Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Kantrowitz?

  Sam Altman is heading to Microsoft to build an advanced new AI research team along with the former president of OpenAI, Greg Brockman, and what it seems like is going to be many former OpenAI employees. We'll break it down right after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial, to go inside

• 0:40Alex Kantrowitz?

  a large-scale agentic CX transformation, including the business decisions, trade-offs, and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, flexibility, and peace of mind. That's how companies like Razer were able to cut their inference cost by 15 times. Visit akash.network/alex for a free consultation. That's akash.network/alex for a free consultation.

• 1:19Alex Kantrowitz?

  Welcome to Big Technology Podcast. We are apparently a daily show as long as this OpenAI drama is going on. Dan Primack is here. He is the business editor at Axios and the author of the daily Axios Pro Rata newsletter. Dan, welcome to the show. Thanks for having me. It's good to be here. I wasn't expecting to be here, but good to be here. Yeah, I feel like when our listeners hear your voice, it means the shit is hitting the fan in Silicon Valley. And here we are again. Yeah, that's where we are. Absolutely. Let me start with this question. We now know that Sam Altman is apparently going to Microsoft with Greg Brockman and a bunch of other OpenAI employees. There's like 500

• 1:59Alex Kantrowitz?

  or more OpenAI employees who are still trying to get Sam to return to the company. Is this podcast going to be obsolete like the moment that we posted, or do you think he's actually sticking at Microsoft?

• 2:12Speaker 01

  It may be obsolete. I mean, there's basically two schools of thought here. One is that Microsoft has just had it with OpenAI and the board, despite, you know, we support them, et cetera. And just like, you know what? We can build, if not this exact thing in-house, we can build this in-house. We already have access to ChatGPT, you know, there's no patents on it, et cetera. So let's just bring the brains in and let's build our future because AI is obviously going to be part of our future. You know, Microsoft at its core is a productivity company and obviously AI at its core, particularly things like ChatGPT is a productivity tool. The other theory is that Satya Nadella has just basically called the bluff of OpenAI's board and is basically using the hiring of Sam and Greg Brockman as leverage against

• 2:55Speaker 01

  it, which is basically to say, hey, if you don't hire them back, which is what we, we the people who have given you, you know, 12, 13 billion dollars, what we want, we'll take all your people. So, you know, you can maintain and continue to be the board of directors, but the board of directors of what exactly? Because it's not just rank and file, as you said, it's 500 plus of around 700 employees. It's all, almost all the senior executives, including the woman they put in as interim CEO just on Friday, and including the other co-founder who was part of the board coup. He signed a letter basically saying, fire me from the board. Do it, you know, by end of day.

• 3:30Alex Kantrowitz?

  Yep. So I guess there is a possibility that they might still go back. But if you're Microsoft, you're basically just like, this is going to accomplish all of our goals right now. I mean, we'll have to pay some salaries, but we're going to basically intake the world's leading research house. Yes, we did this investment of 13 billion, but a lot of that was Azure credits. So effectively, we can now take them, put them inside Microsoft and have them continue on their work. It's going to take some time to train the next models, but do it without any strings attached. Pretty good outcome.

• 4:02Speaker 01

  It is a good outcome. I'd say the only caveat to that is, though, I had kind of been under the impression that that one of the reasons that Microsoft, for example, hadn't tried to buy OpenAI outright. And I know part of that was Sam didn't particularly want it to be sold. But one of the reasons Microsoft wasn't trying to necessarily buy it was that it gave Microsoft some plausible deniability when it came to this, these safety and guardrails issues, right? You know, Microsoft is one of these legacy big tech companies. They have an ethics bureaucracy which is very strong inside the company. And what Satya Nadella, the CEO of Microsoft, was able to kind of do was let OpenAI kind of make stuff. And I know there was obviously a conflict inside of OpenAI and how fast or how slow they should go. But if there were things that maybe would have been objectionable inside of Microsoft,

• 4:44Speaker 01

  well, Satya was able to let that development go because it was a third party at arm's length, and he could say, well, that's not us. That's them. So now by bringing, particularly by bringing Sam and Greg in house, if that's how this plays out, not only is he kind of bringing that ethics bureaucracy onto them, they're kind of the folks who were go, go, go, go, go. So I could see a conflict there inside of Microsoft.

• 5:06Alex Kantrowitz?

  Yeah, I got a text from an AI CEO saying that they cannot believe that these guys are going to stay inside Microsoft for too long. Although then they'd have to like, I mean, that'd be crazy, right? Shift the employees again to another company? Like, it was either going to be startup or go.

• 5:21Speaker 01

  It seems nuts. But also, I mean, if you had told me, you know, a couple of days ago, that Sam Altman, you know, forget about the circumstance here, but Sam Altman would want to go work for a big tech company, I would have been stunned. I mean, that that doesn't strike me as him even a little bit.

• 5:34Alex Kantrowitz?

  Yeah, I wrote a tweet that the world's greatest tech leaders are destined to be middle management at Microsoft. And it was only half joking there.

• 5:40Speaker 01

  Absolutely.

• 5:41Alex Kantrowitz?

  That's where he is now. So, okay, let's say everything continues according to plan. They're inside Microsoft, they're building.

• 5:46Speaker 01

  Is there a plan? What's the plan?

• 5:48Alex Kantrowitz?

  The plan is that they're inside Microsoft, they're building this new GPT tool. I mean, plan, as in plan hatched like five minutes ago, but that, that's what it is. They're effectively now going to be operating outside the auspices of this safety-focused AI board that we're running OpenAI. Does that mean that this board was kind of fake all along? Like, the second they took this investment, wasn't that out the window? Like, they had to build to get more money, and they had to get more money in order to build. And so like, this whole idea that you could run a company of this magnitude in a way that like, reports to a nonprofit, yeah, nonprofit board that's focused on AI safety, like, they

• 6:29Alex Kantrowitz?

  tried to enforce their terms, if that's what actually took place, and now they're going to basically have Altman and crew go do this without their oversight?

• 6:37Speaker 01

  Yeah, I mean, look, it was a screwy structure to begin with, and it was, and particularly, because remember, when we think of boards of directors, their primary job, and they have other jobs, but their primary job is to, is to ensure or protect shareholder value, whoever those shareholders may be, public or private. That wasn't this board's job. This board's primary job was to protect the mission, which is a different thing sometimes. And, but, but it was also, it's worth noting, the board that acted last week is not the board that OpenAI began this year with. There were more people who had, for lack of a better term, corporate experience at the beginning of the year, namely Reid Hoffman, who was on the board, leaves in March, you know, either was pushed or left voluntarily because he had launched this competing AI

• 7:22Speaker 01

  company called Inflection. He also was on the board of Microsoft, and for all the talk, including for me, that, you know, how the hell is Microsoft making this investment without some sort of eyes and ears on the board? For a long period of time, Reid Hoffman was those eyes and ears, and I'm sure he, you know, was, you know, maintained the proper rules and compartmentalized. But like, I think Microsoft felt that if all hell was really breaking Lucid OpenAI, Reid was, if not going to tell them, at least be the guy who stood there and put his finger in the dam. But he's not there anymore. So what was left was this weird group that, with the kind of exception of Adam D'Angelo, who's, you know, an early Facebook employee and founder and CEO of Quora, didn't really have any major corporate board experience, major legal experience, major marketing

• 8:05Speaker 01

  experience, major executive experience. And so even if the structure itself was screwy, it could have maybe worked better if they had had better board.

• 8:16Alex Kantrowitz?

  Right. And so this has been a, there's been a through line through this or a meme about this that basically there's people arguing that AI can't be this serious. This would never like be the case on like even like a pharmaceutical company that they would have a board like this. And AI can't be so real if that's the case. What do you make of that?

• 8:34Speaker 01

  I mean Theranos wasn't a pharma company, but it was a medical device company. They had a board, bad board. I mean, you have FTX, which was technically a financial institution, right? It was an exchange. It was an actual security, I mean quasi securities exchange. They had no board at all. Twitter's, you know, one of the most powerful social media platforms in the world. It does not have a board of directors at the moment. So, I mean, I don't think it is a knock or I don't think it's a reflection on the industry. I think it's a reflection on the organization.

• 9:01Alex Kantrowitz?

  Okay, but-

• 9:02Speaker 01

  And again, to a certain extent, and the investors in it who were, once again, and we have now said, had this story a few times, willing to overlook it.

• 9:09Alex Kantrowitz?

  Right. There's a, I gotta cite this piece of warning that they gave to OpenAI investors. They basically said, investing in OpenAI is a high-risk investment and investors could lose their investment and should see it as a donation. You know, but yet, yet Thrive Capital, Sequoia, Microsoft put-

• 9:29Speaker 01

  Sequoia, by the way, who now, this is three for them.

• 9:32Alex Kantrowitz?

  Right.

• 9:32Speaker 01

  They were in FTX and they were, and they are in Twitter, you know, two companies with no boards. And now they do this one, which has a quasi-board. I mean, they are, look, they are the best historically venture capital firm in the valley. If I was asked to put my life savings in a VC firm, I would probably give it to them. But good God, how many times can you make the same mistake?

• 9:50Alex Kantrowitz?

  Well, what the, I mean, when you have three like that, there's obviously some systemic problem there. What do you think it is?

• 9:55Speaker 01

  I think the systemic problem is that they are valuing the founder over the governance or they're, or they're not considering governance as, as a significant enough risk factor when they're making their final decisions.

• 10:10Alex Kantrowitz?

  Is there a zero interest rate policy component to this that like all this stuff was made where like, you know, companies were much looser with their money? Do you think this is going to change?

• 10:18Speaker 01

  I mean, some, but I, some, but I think this was more a FOMO issue, right? You know, OpenAI is the lead, you know, if, if you believe, and most people I think in the valley do, if you believe that AI is the next great platform shift and maybe a more important platform shift than was mobile, or maybe even the internet, depending on who you are, well, you've, you've got to make your bets and, and, and it is, it is, it is a bigger problem to not be on the ship than to be on a ship that happens to crash.

• 10:42Alex Kantrowitz?

  So I had this thought that like now, maybe companies will be more careful about investing, but your perspective seems to be no.

• 10:51Speaker 01

  I mean, not yet. And look, and part of that might be how this whole OpenAI thing plays out, right? If Sam and Greg and basically most of these important employees at OpenAI end up at Microsoft, then OpenAI for the investors, for the VC investors, Thrive, Sequoia, Coastal, etc., then they're holding a bag that's worth basically nothing and they get absolutely screwed. I mean, all the talent walks out the door and what exactly, so they're quasi shareholders in a small nonprofit think tank like that, that's not good for them. On the other hand, if this is Microsoft putting the screws on the board, really with Thrive and Sequoia, etc., cheering them on and as a piece of this too, and Sam and Greg end up back and then, you know, by this Friday, kind of everybody's there and the board is gone. And then maybe it works out well for them, maybe even works out better for them because the folks who are

• 11:35Speaker 01

  advocating for those guardrails are gone. That might not be good for the world, but it's probably good for these investors.

• 11:41Alex Kantrowitz?

  Right. Reid Albergotti had this like interesting thread about what, when you talked about this shell that's going to be left. I mean, Sam and Greg are going to be at Microsoft. So, you know, if everything continues. And so therefore, when OpenAI, OpenAI can only use Microsoft to train their models as part of the deal. So therefore, when they're training, that data will go to Sam and Greg. It's like, what does?

• 12:05Speaker 01

  Microsoft is playing, is playing hardball right now. I mean, for all of these statements of we value our partnership, I mean, with friends like these.

• 12:15Alex Kantrowitz?

  Right. Do you think, one of the things that I've heard is that, you know, this kind of shows an interesting look into Microsoft culture, how fast they were able to move. Like, people have been telling me, listen, like Sundar would never move this fast. Even Apple might not move this fast. It's so funny because Microsoft is looked at as this like big, clunky company, but their speed and their execution here is pretty impressive.

• 12:36Speaker 01

  And it really has been since Satya took over, right? I mean, you even think of some of the stuff he's done in gaming. Yeah, this is very impressive and let's also not diminish the idea that they're angry, like anger is a good motivator for people, right? Like they, they found out, you know, Ina Fried of Axios, my colleague. She wrote that Microsoft was given a heads up of Friday's announcement, Sam, by a minute, one minute. That, you know, we gave you $12 billion, granted some in credits, but like, and you, and you give us 60 seconds heads up that this guy is gone? You don't, you don't even have the courtesy to tell us. I mean, F you and we're, we're, we're angry and we're going to work the weekend to fix this.

• 13:12Alex Kantrowitz?

  Yeah, and it made Satya look, look silly in the outset, but then

• 13:15Speaker 01

  It absolutely did.

• 13:16Alex Kantrowitz?

  Kind of a rebound.

• 13:18Speaker 01

  Yeah, so far and you're right, look, Microsoft, Microsoft has kind of always been in the background and they, they, you know, they've obviously always been a big tech company in terms of market cap and stuff, but they were viewed for a very long time as the sleepy company when, you know, there was Meta and Google, et cetera, and, and Apple, and, and they are absolutely, or Amazon, they're absolutely at the forefront now. The, the Satya has done that. It is probably the most, to me, the most impressive kind of big tech CEO tenure that, that's existed outside of founders.

• 13:48Alex Kantrowitz?

  So just thinking again about OpenAI, do they just kind of wither now? Seems like that's the case.

• 13:54Speaker 01

  Come back to me at 5:00 PM today when we see do 500 employ, like do our, does the board, do 500 employees really quit? And, and the board has an interesting decision to make here because if their job is to protect the mission.

• 14:05Alex Kantrowitz?

  Yep.

• 14:06Speaker 01

  The mission isn't safety. The, the mission is the advancement of AI. Safety is a piece of that. So does the board decide that it existing in its current form is basically more important than those 500 and change employees staying with the company? I mean, if so, I would suggest that's a pretty narcissistic point of view, considering that none of these people, with the exception of Ilya, are AI engineers and Ilya, the AI engineer, says the board should resign.

• 14:32Alex Kantrowitz?

  But how does Satya even let this, you know, go back now like?

• 14:36Speaker 01

  Oh, because it would be great for Satya because they've already made the investment. They already get to have the partnership with ChatGPT. And again, if OpenAI is at arm's length, they don't need to deal with all the thorny ethics issues. Let Sam and Greg deal with those and they don't have to be. Satya doesn't have to be the one who gets called in front of a Senate committee to talk about this crap. Sam does.

• 14:54Alex Kantrowitz?

  But there's no embarrassment of like, oh, I said they were coming in and now they're actually not coming in. And there's still going to be, well, I guess if you rearrange the board, then you don't have to deal with that issue.

• 15:01Speaker 01

  If you rearrange the board and if you, and assuming this is true, if you get out the narrative that Satya organized this, that Satya knew exactly what he was doing and he forced their hand and it worked.

• 15:12Alex Kantrowitz?

  Yeah, that will be, you know.

• 15:14Speaker 01

  Because we do, one thing we do know, Alex, is that over the weekend, and maybe I guess actually starting Friday night, Satya slash Microsoft and the major investors in OpenAI have been pressuring the board to bring Sam and Greg back. And it really looked as of Sunday afternoon, like that's exactly what was going to happen. Then OpenAI's board named somebody else, Elliot Shearer, CEO. And then the Microsoft announcement of Greg and Sam comes, what, 12 hours later or something like that? So I think this was, I do get the sense that this is Microsoft's attempt to put them back in. And the worst thing that happens for them is that they work in house.

• 15:48Alex Kantrowitz?

  Oh, my goodness. Yeah, if this, I mean, I feel like we are just ready for one more twist. That'll be, the podcast feed will be like Sam fired, what we know about Sam's firing, Sam to Microsoft, Sam back to OpenAI.

• 16:01Speaker 01

  I mean, the lesson is don't invest in startups founded by guys named Sam. It is messy, it is complex.

• 16:06Alex Kantrowitz?

  Do you, what do you think about this, speaking of which, this like through line of the effective altruists in both arenas?

• 16:14Speaker 01

  Yeah, that's an interesting piece of this that I, and I guess again, like everything else, let's see how this all plays out. But I find that to be an interesting piece that obviously OpenAI and FTX are very different organizations with very different people. But yeah, the EA thing has once again kind of reared its head in. Call it a very counterproductive way.

• 16:36Alex Kantrowitz?

  Yeah. And then what about the, again, about the safety thing like doesn't seem, you know, let's say they do go through with this and, and either they go to Microsoft or they go back to OpenAI where, um, you know, there's a new board in place. Like, actually, there was really no mechanism to, if there were real safety concerns, like Sam Altman last week was telling Lurie Powell Jobs, like, you're not going to believe what we have coming up. It's like, sort of changes the barrier of comprehensibility and all these things. Like, are we even able to develop this stuff safely? Doesn't seem like it.

• 17:08Speaker 01

  I don't, I don't think so. I mean, to me, that horse has already left the barn. I mean, no matter what happens at OpenAI and happens at Microsoft. I mean, and, and even, even this talk about responsible and safe development. Like, look, there, there is value in putting guardrails in place as things are getting built, right? Because when you build a foundation more safely, then the rest of the house is less likely to fall down. However, that said, there are so many different organizations working on this stuff that, that I'm not sure, I'm not sure that one organization going slower or faster is necessarily, you know, maybe, maybe this year, next year, and the year after. But, you know, if we're talking about this in 10, 15 years from now, I think this will be looked at a kind of quaint conversation.

• 17:46Alex Kantrowitz?

  Exactly. So, um, a couple of questions for you about the broader AI world. So first of all, Ser Guo, the VC at Conviction, has talked about how it's now going to be open season on AI and that everyone's going to like now think that they didn't have a chance against OpenAI. And now they will, you have like Mustafa Suleyman, uh, who was, uh, the co-founder of Deep Minds. He tweets, utterly insane weekend. So sad. Wishing everyone involved the best. One sentence later, in the meantime, we finished training Inflection 2 last night. It's now the second best LLM in the world and we're scaling much further. So is it now going to like, kind of level the playing field, given that they've had this turbulence?

• 18:24Speaker 01

  I mean, it may, although, you know, Inflection raised a ton of money. Anthropic, which is founded by some people who left OpenAI in part because they thought Sam was kind of moving too quickly on the commercialization side. You know, Anthropic has raised an enormous amount of money, including from Google, including from Amazon. Uh, and, and there's a bunch of, you know, other companies out there on the infrastructure side, you know, the hugging faces of the world. I, I think it's a, uh, it's a, it's a gold rush right now. There's a lot of companies out there. Some are going directly at each other, kind of with these foundational models. Some are playing on other pieces of it. I don't think. That OpenAI, whether it, you know, this is a little bit to me like kind of the early dot com internet days where some very, very big players, like kind of fundamental foundational players, think Netscape,

• 19:07Speaker 01

  right? You know, disappear eventually or get diminished, not for reasons like this, not with all the soap opera drama, but like kind of disappear, but, but the, but the trend, the revolution, the platform shift goes on anyway, because there's so many people working on it in so many different ways that, that no one organization owns this.

• 19:26Alex Kantrowitz?

  Right. And then also just like from an infrastructure perspective, I would imagine now you're having this, um, this great model agnostic movement where any company, you know, think about like the companies that built on top of OpenAI. Now they're going to do whatever they can to hedge because they realize they can't tie their ship to this, you know, one, one company. So

• 19:44Speaker 01

  I do think that's kind of an under covered so far part of this in part because it's only been a couple of days, but you know, company, you're right. Companies have built, if not their entire business models, definitely products on top of ChatGPT, on top of OpenAI. And look, by the way, that stuff's still working. It's not like the thing shut down and now, you know, all their, you know, they're getting, you know, four or four codes on everything. Stuff's still working. Microsoft's still, you know, Azure's still powering everything, but it definitely has to give people pause. And candidly, anytime you as a company build on someone else's platform, look, we're in the media space. I think we have learned this lesson over and over again from Facebook and others, you have a massive, massive risk and, and diversification in some way is essential.

• 20:27Alex Kantrowitz?

  Well, I've been thinking about Meta's research lab. I mean, they are trying to get to AGI. They're not worried about existential risk, you know, and they're building open source. Did they end up coming out like looking even better now than they did before? Not to mention that Zuck, you know, look at all these other CEOs that have had their issues, Zuck stays in place.

• 20:44Speaker 01

  Yeah, I think Facebook, and I've written this a couple of times, I, I think Facebook is kind of the dark horse in this because, and, and not because of the kind of all this personnel tumult, but there, there is to me this existential risk for, for OpenAI, for Anthropic, for others, which is that a lot of the data that they are building their models on is potentially legally questionable, right? That, you know, stuff they've basically pulled off the web, you know, that is in some ways copyrighted, et cetera. There are a couple lawsuits about this, you know, from some music publishers, from Sarah Silverman, the comedian. And, and if someone like a Silverman won, or some of these music publishers won, every news organization, et cetera, would file a similar suit to try to, you know, get their piece of the pie. Facebook is different, though. Facebook is training its model on its own data. Every

• 21:28Speaker 01

  time you or I ever publish anything to Facebook or Instagram, Facebook owns that. That's in the terms of service. There's no legal question whether Facebook owns that stuff. So Facebook, if these other big LLM companies end up having legal problems and end up financially having to pay huge amounts for this stuff, Facebook with Llama is going to be sitting there pretty on this.

• 21:48Alex Kantrowitz?

  Exactly. Okay, one more, a couple more things I want to check in on. I mean, one is like, there's this meme that's been going on about how like these, the board was supposed to be like predicting what AI was going to kill us, but couldn't think three steps in advance in terms of what they did. What do you make of that? I mean, I guess going back to the

• 22:09Speaker 01

  Yeah, I am desperate for the, for an actual interview with any board member on what really happened here and kind of what thinking at all they did, because I mean, they weren't even playing checkers. I mean, they were like, they weren't even playing Candy Land. I mean, this, this was kind of, unless there's really something we don't know, but I would say that we're now what, three-ish days after this. And these board members each do know reporters. I can, you know, I know that we've reached out individually to some, if there was a real good story to tell from their point of view, if nothing else, just to protect their own reputations, something would have leaked by now. Something would have leaked by now from

• 22:50Speaker 01

  one of them. And nothing has to any reporter. I mean, for all the, you know, billions of words that have been written by tech press and general press and Twitter and blogs, there's not been a really good defense of what they went about doing. And that's not to say that their concerns weren't valid or legitimate. I think, I think it's possible you can make that case. But the way they went about it was, was so ham handed and, and again, really shot themselves in the foot.

• 23:17Alex Kantrowitz?

  Do you think it had more to do with the ambition of using like the AI research? Or was it Sam trying to, you know, raise money for other companies?

• 23:25Speaker 01

  I don't, I can't imagine it was the Sam trying to raise money. I mean, the, the, the story that's coming out is that Sam was trying to raise money for kind of for a chip making thing. And, and I know that Sam's perspective on this for a while, this, this has been that we, we as a, as America, but also kind of AI as an industry is highly, highly reliant on Taiwan. Um, as being this chip making hub. And I understand we make some chips here and Intel's building factories in, in Arizona, but you know, if Taiwan disappeared tomorrow, the AI industry stops tomorrow. Uh, and OpenAI for sure stops tomorrow. And I think Sam's perspective was if there can be another global chip making hub, and if that's Saudi Arabia, so be it. I don't, I don't think he was trying, Sam was trying to create a chip making company to build chips in Palo Alto and have Saudi PIF fund it.

• 24:07Speaker 01

  I think he wanted Saudi Arabia to become that next place really is a redundancy. So that if something happens with Taiwan, namely China invades it, well, the industry wouldn't grind to a basically a complete and total halt. You can't just put up a semiconductor fab overnight. Um, he, did he mislead the board about that? Maybe we don't know, although we keep hearing, quote, no malfeasance. Was he just not fully honest? Do you really? And, and again, this all goes back to the, if it was so bad, like the only reason CEOs usually get fired instantaneously in the dead of the night, you know, on a Friday afternoon is something. You know, we found out that he stole money. We found out he slept with the wrong person and lied about it, you know, something really extraordinary as opposed to really a strategic disagreement.

• 24:51Speaker 01

  Well, then if, if we want to get rid of you, fine, but we work out a, you know, a transition plan that everybody's on board with. By the way, we don't tell the chairman that you're staying on as president when you haven't told him that. You sure as hell don't do that. You don't promote someone to the new CEO role who seems to actually be more in line with the people you just fired. Like it's, it's mind numbing how they went about this. And, uh, and in the end, if they really wanted things to go slower, um, I think the result is things are going to go faster.

• 25:19Alex Kantrowitz?

  Exactly. And okay. So Ilya Sitskaver, he was part of the coup you mentioned. Now he's regretting it. Um, what, what do you think's possibly going on there?

• 25:27Speaker 01

  I think he's trying to save his job. Or let me rephrase. I think he's trying to save his job in the perspective of working with this group of people, whether that is at OpenAI or whether that's at Microsoft. I mean, look, he is not, for lack of a better term, a politician. And I mean that from a corporate perspective. He's not a corporate politician. I don't know him personally, but from those who do, I don't think he necessarily appreciated the gravity of what he was doing. I think he believed in the, in the, called the strategy thinking, right? Which is that Sam and Greg were not doing what he would want to have done on the technology side. But I don't think he, you know, I don't think he played any game theory from a, you know, a boardroom drama perspective. I don't think he ever watched Succession, is what I guess I'm saying. I don't think he ever figured what was coming next.

• 26:12Alex Kantrowitz?

  Okay, so let's do, let's end with a couple of winners and losers and then a quick prediction. So I'll just go through some of the main players here and kind of get your perspective, winner or loser. And imagining that things stay the same. OpenAI, imagine that's a loser.

• 26:27Speaker 01

  Loser.

• 26:28Alex Kantrowitz?

  Microsoft?

• 26:31Speaker 01

  I'd say loser, but, but, but not a huge loss. They're, they're making the best of their situation.

• 26:37Alex Kantrowitz?

  Okay, basically like they were betting on the stability, but this is sort of going to set them back, but they should be okay.

• 26:43Speaker 01

  Yeah, and they do look dumb not having some sort of protections on themselves for this. I mean, again, they're, I think they're playing the last couple of days very smartly, but like, I think it's kind of like, all right, that's a really good basketball coach. His team's down 10, but he's figuring out how to get him back in the game.

• 26:57Alex Kantrowitz?

  Yeah, okay, Google.

• 27:01Speaker 01

  God, I guess at the moment winner.

• 27:03Alex Kantrowitz?

  Yeah, sounds like a winner. Amazon, do they, do they?

• 27:06Speaker 01

  Same thing. At the moment, a winner, but I think, you know, TBD. Winner by not being, winner by not being part of this mess. Like winner by not playing.

• 27:14Alex Kantrowitz?

  And how does Sam Altman come out looking from all this?

• 27:17Speaker 01

  Right now is a winner, which is kind of remarkable. I mean, I don't know any CEO, founding CEOs who get fired from their company overnight and, and they're looking really good three days later. Sam has all the optionality. And the main reason I think Sam's coming out looking good, Sam has a tricky reputation. He definitely likes the spotlight, et cetera. You know, he obviously, you know, ran Y Combinator, and then there's always been questions about what really happened at the end there. But look, the vast majority of OpenAI employees just threatened to quit basically in solidarity with him.

• 27:47Alex Kantrowitz?

  Yeah.

• 27:47Speaker 01

  I would say that there are very few companies that if the CEO was fired, that most people would be willing to quit in solidarity with their CEO. That shows remarkable loyalty from the people he was overseeing.

• 27:59Alex Kantrowitz?

  Okay. And prediction, where does this go? Is this the end of the story?

• 28:03Speaker 01

  No, my prediction is that Sam Altman and Greg Brockman are working at OpenAI in some way very, very soon. I do think they probably come back.

• 28:17Speaker 01

  I wouldn't bet any money on it, but that's my guess. And no, I think there's going to be more twists and turns. And I don't know what happens with Elliot Shear.

• 28:25Alex Kantrowitz?

  Yeah, well, I hope that it wraps before Thanksgiving. It's been fun working through one weekend, but I don't want it to go through two.

• 28:31Speaker 01

  I mean, can we say, I think they have to get that. I think this has to be done by Thanksgiving, just for everybody's sanity, including sanity of the board. This cannot be fun for them.

• 28:40Alex Kantrowitz?

  Exactly.

• 28:41Speaker 01

  And could you, by the way, let me add, these board members don't, they're not founders of this company. They're not employees of this company. They can walk away and they'll feel bad about it, but like there are times when it's worth walking away because A, you've screwed up and you don't really have anything invested in it except time. They could just say, you know what? This is someone else's problem.

• 29:02Alex Kantrowitz?

  Exactly. Dan, this has been great. Where can people find your work?

• 29:05Speaker 01

  Axios.com and the newsletter, getprorata.axios.com.

• 29:10Alex Kantrowitz?

  Awesome, Dan. Great having you on. Thanks for joining for another emergency show. I mean, it's always, I feel like we break down these big news events, we speak with you and come away feeling way more informed than we started. So thank you for being here and thanks, everybody for listening. Well, we'll see how this goes. We may have another show tomorrow, another show Wednesday, or we might wait till Friday, just depending on the cadence of the news. If Dan's right, we'll be back on the air quite, quite soon. So stay tuned and thanks so much for listening. We'll see you next time on Big Technology Podcast.

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