Why OpenAI Isn’t Open Anymore

Key Takeaways

open AI started as open source and a non-profit yet today open AI is closed Source for-profit company now how did this happen what's the reason behind this controversial shift and why did Elon Musk one of the founders leave the company my name is David Andre and this is the untold story of open AI the company was created in 2015 and there are a lot of co-founders but the five most important ones are Elon Musk Sam Altman Greg Brockman Elia satskiver and Andre carpathi the company started with 1 billion dollars worth of funding and it came from people like Peter Phil Reed Hoffman Elon Musk Sam Altman but also companies like Amazon web services now as you can see there were a lot of people involved in open ai's creation but who was the most important one well this is what Elon thinks I am the recent open AI exists how much money did you give them I'm not sure the exact number but it's some some number on the order of 50 million dollars the final straw is Larry calling me a species for being pro-human conscious this instead of machine Consciousness and I'm like well yes I guess I am so why was open AI even created what what article on their website introducing open AI openai is a non-profit artificial intelligence research company our goal is to advance digital intelligence in the way that is most likely to benefit Humanity as a whole now here is the important part unconstrained by a need to generate Financial return yeah that didn't age well to put it simply open AI was created to make sure that AI doesn't wipe us all out but there was a second reason back then Google had a virtual monopoly on all AI Talent they controlled something like 75 of all AI researchers which is absolutely unheard of when openai was created it did shift things from unipolar world where Google demand controlled you know like I said three quarters of all AI challenge even though open AI started with a billion dollars that proved not to be enough and soon the company started running into a bunch of issues but the two most significant problems were securing more funding and acquiring Talent remember the company it was still a non-profit at that time so convincing investors to give you money when they can't generate a return is very difficult especially when you're in a super expensive industry such as AI that requires data storage computing power expensive Engineers yeah that's the second problem expensive and great talent because openai had to compete with Google and Google has billions billions of dollars which means they can also offer much better salaries than a simple non-profit startup as a result open AI was forced to pay competitive salaries which means the funding issue got even worse now one of the most pivotal moments in open ai's history is when Elon Musk left the company the official reason is that Elon wanted to avoid conflict of interest since Tesla is also working on their own AI systems meaning if he was on the board of open AI as well as being the CEO of Tesla that could cause some problems but the unofficial reason well there's a bunch of those some people speculate that Elon wanted to be the CEO of open Ai and when he didn't get his way he decided to leave others say that it's because of some feud between Sam Altman and Elon Musk which eventually caused their relationships to deteriorate and cause conflict within the company but honestly the most realistic explanation is that Elon was just overloaded with a bunch of responsibilities from Tesla SpaceX the boring company SolarCity like the guy is doing everything and actively participating in yet another company maybe that was just too much soon after Elon left open AI made the decision to become a for-profit company which makes it seem like Elon was the main reason why openai was non-profit in the first place right after openai stopped being a non-profit organization Microsoft came knocking with a one billion dollar investment now why is it even an issue that open AI is no longer a non-profit well think about it like this if open AI actually manages to create AGI or a super Intel Legend artificial being then that will create billions if not trillions of dollars worth of value for the company now if it is a non-profit that's not an issue because it's doing all of that for the good of humanity but when it is a for-profit all of that money will go straight to investors to be fair openai isn't a completely for-profit company it has a unique corporate structure which is called a capped profit meaning that the investors can only earn a capped amount but in this case it's 100 x the investment now I don't know about you but I think the reason for a capped profit is to discourage or deter money-hungry people but 100x return isn't deterring anyone despite all the controversy the original one billion dollar investment from Microsoft was absolutely huge it showed that Microsoft had a serious level of confidence in open Ai and that it believed that this little team which was at the time only a couple hundred people maybe even less than 100 could actually achieve the ambitious goal of creating an AGI but this investment wasn't just Financial it was very strategic both for Microsoft who increased its presence in the AI space and for openai who got access to Microsoft Azure the supercomputers from Microsoft however the investment also came with some downsides Microsoft started to influence openai strategy the investment began to shift openai's approach from being a purely research lab to starting to focus more and more on Commercial products another huge downside of Microsoft's involvement was the controversial reactions from the AI Community this spark debates about the ethics of proprietary Ai and the concentration of power in the hands of the few just imagine if they actually create AGI who is in control is it Sam Altman is it Greg Brockman or is it Satya from Microsoft either way it's not the humanity and the general public who has to decide it's a bunch of people who will have incredible power okay so that was the switch from non-profit to for-profit but when did the company become closed Source because if you remember the company was open source like it's even in the name open AI so what happened there now it's important to understand what open source even means open source is a term used to describe something usually a software that is freely available for everyone to modify use and distribute imagine a cooking recipe not only can you use that recipe you can also tweak it and share that tweak version with anyone without worrying about legal implications that's exactly how open source software works when openai created gpt1 its very first language model it was completely open source everything was publicly available including the source code and even the model weights but something happened with the release of gpd2 see the switch to closed Source was much more sneaky than the switch to for profit when gpt2 was released it wasn't publicly available until many months later when openai decided that that it was finally safe to release however it was the release of gpt3 when things started to get really weird in 2022 openai granted Microsoft exclusive licensing thus Microsoft had access to gpt3's underlying model and no open source code or model weights were ever released to the public this also marked openai's first commercial product the gpt3 API this was a massive change from open ai's previous statement which said that they weren't focused on Commercial products instead they were just a research lab okay so why is closed Source an issue well first off the company is named openai which is now very misleading and it makes a lot of people feel like the company is still open source when that's definitely not the case but the bigger issue is that nobody can see inside of a closed Source company meaning that if the AI is really sentient or conscious or if they actually have AGI nobody will know until openai does something with it or until the AGI decides to do something itself alright let's put all of the public backlash aside how did the partnership with Microsoft actually impact open AI well I think there are five big changes that happened number one open AI started to shift towards commercialization because the company was bleeding money left and right number two the partnership greatly Amplified openai's resources like imagine going from a new startup to having the access to trillion dollar companies super computers like that has to be insane number three open AI could use Microsoft's infrastructure to make all of their products safer and more robust mitigating potential misuse while at the same time making it more accessible to other organization and small businesses number four the two companies started doing exclusive deals for example when Microsoft wanted to create co-pilot which is a coding assistant built on top of GitHub and the app Microsoft also owns GitHub and number five this partnership gave openai massive credibility ability and reputation boost since before it was just a small AI startup but now it is partnered with Microsoft one of the biggest companies in the world overall working with Microsoft had a massively positive effect on open ai's growth the question is at what cost and we might have gotten the answer earlier this year where Microsoft invested another 10 billion into open AI which means that Microsoft now owns 49 of open Ai and it receives 75 of all profits that openai makes until all of the Investments are repaid in full on top of that openai is paying Microsoft for the use of Microsoft Azure honestly this was a genius business move by Satya Nadella but what's even crazier is that Microsoft has access to all of openai's models code and weights meaning they could effectively cut them off at any point Microsoft as part of the Microsoft's investment they have rights to all of the soft where all of the model weights and everything necessary to run the inference system now if you'd like me to interview people like Sam Altman or Ahmad mustak then follow me on Twitter that way I can actually get in contact with them because right now I have like 12 followers the link is in the description