Comment by toomuchtodo | Hacker News Reader

Comment by toomuchtodo | Hacker News Reader

Parent Full thread

https://stratechery.com/2023/openais-misalignment-and-micros...

> This is, quite obviously, a phenomenal outcome for Microsoft. The company already has a perpetual license to all OpenAI IP (short of artificial general intelligence), including source code and model weights; the question was whether it would have the talent to exploit that IP if OpenAI suffered the sort of talent drain that was threatened upon Altman and Brockman’s removal. Indeed they will, as a good portion of that talent seems likely to flow to Microsoft; you can make the case that Microsoft just acquired OpenAI for $0 and zero risk of an antitrust lawsuit.

> (Microsoft’s original agreement with OpenAI also barred Microsoft from pursuing AGI based on OpenAI tech on its own; my understanding is that this clause was removed in the most recent agreement)

> Microsoft’s gain, meanwhile, is OpenAI’s loss, which is dependent on the Redmond-based company for both money and compute: the work its employees will do on AI will either be Microsoft’s by virtue of that perpetual license, or Microsoft’s directly because said employees joined Altman’s team. OpenAI’s trump card is ChatGPT, which is well on its way to achieving the holy grail of tech — an at-scale consumer platform — but if the reporting this weekend is to be believed, OpenAI’s board may have already had second thoughts about the incentives ChapGPT placed on the company (more on this below).

Discussed at https://news.ycombinator.com/item?id=38346869

The cited source indicates otherwise, that the license comes with restrictions. Ben didn't read the article.

https://www.wsj.com/articles/microsoft-and-openai-forge-awkw...

Who will fight them?

OpenAI's lawyers? Big tech passes everything through legal anyways.

Except for firing execs it seems. Everybody who remains in charge at OpenAI has so many conflicts of interest now that their best bet is to lay very low. Unless they want to be in lawsuits for the next couple of generations. And so far laying low is exactly what they are doing. Has there been any substantial statement from the new CEO yet?

OpenAI isn't Big Tech? Adam could reasonably argue his interest in Poe doesn't conflict with the nonprofit charter. Sam & Greg saw fit to leave him in place. Uncommunicative boards remain less unusual than you think, unfortunately.

> Adam could reasonably argue his interest in Poe doesn't conflict with the nonprofit charter.

Good luck with that line of argument, I wouldn't want my reputation and my fortune to hinge on that.

> Sam & Greg saw fit to leave him in place.

Bad mistake on their part given the guy's history.

> Nothing from Emmett yet.

I wonder if he'll resign...

I really don't think investors have the case you think they do. They may ultimately pin the board on some technicality but the case looks far from straightforward. Anyways, it looks like Sam has finally started talking with the board again.

https://www.bloomberg.com/news/articles/2023-11-21/altman-op...

Everybody involved has more to gain by patching things up and the 'rogue' board members vacating their seats, the sooner they realize that the better.

As for whether or not investors have a case: Microsoft may not, but the smaller investors probably do because they can fairly easily prove that their interests were harmed by the ill advised actions of the board.

The nonprofit board holds no fiduciary duty to for-profit investors, big or small. In theory, I suppose you could sue the board over undermining the charter but that seems tricky itself, this case aside.

You keep saying that. But only a judge can confirm that that means that they are able to cause harm without consequences. I don't buy that. The charter is not the only thing that governs what a board can and can not do, just like you can't contract out of the law in any other way a non-profit board members does not have automatic and complete immunity from the fall-out of their actions. That would be an interesting device: a full blown corporate armor that exceeds even the degree of insulation an indemnification would offer. It would be the boardroom equivalent of a magic cloak.

Harming investors in order to uphold the nonprofit charter sounds more reasonable than you suggest. Take it from Matt Levine. I don't think investors would win this line of argument.

https://www.bloomberg.com/opinion/articles/2023-11-21/openai...

But there is no proof whatsoever that they did this to uphold the nonprofit charter.

And until that proof surfaces I'm going on the assumption that it doesn't exist because if it does exist they would have certainly used it to bolster their case.

Note Ilya's statement of regret and that none of the board members have said a word and that the current CEO is nowhere to be seen. That does not look like a group of people that are acting boldly in the defense of their corporate charter to me.

It looks like a bunch of weasels that thought they could get away with murdering the chicken while they were unattended for five minutes and they're now all covered with blood and pretending to be innocent.

I think that argument fares even worse. The board only needs to prove to a judge they believed firing Sam would benefit the charter, and the leaks from their camp have stated as much. The board has deliberately stayed silent to avoid legal exposure, not a surprise.

> The board only needs to prove to a judge they believed firing Sam would benefit the charter, and the leaks from their camp have stated as much.

Leaks say whatever they want to say and if I found myself in this position - highly unlikely - and I would have leaked something it would have definitely been something to make me look good. Or did you think that if it made them look bad that it would have been leaked as well? In that case I can see your point.

Regardless, unless discovery finds a smoking gun that the board acted in bad faith vis a vis the charter, which nothing public indicates, a judge would likely tell investors to pound sand.

After many lawsuits I've learned to not pre-empt what I think a judge will think of anything. It's actionable. Whether they will prevail (or whether the counterparty will fold) is up for grabs.

Note this key quote by Nadella:

"“As a partner, I think it does deserve you to be consulted on the big decisions.”"

That's one way to look at what might be grounds for a suit. He could be wrong, but that won't stop them from suing to establish that fact and they have very little to lose.

the people owning the remaining 51% of OpenAI?

You should probably check out who those people are. Hint: they're not the board members that decided to yank the rug out from under the company.

They don't have to be board members to fight. The 51% shareholders are clearly wronged here in my view if MSFT just hires all of OpenAI staff AND takes the existing models and trade secrets.

Again, you should check who those 51% are. If you don't know who they are and what their relationship with Microsoft and the various board members is then you probably won't understand why your comments on this subject don't track.

Hint: the 51% are more likely to go after the board than that they are going to go after Microsoft because the board action is what precipitated this whole mess.

Microsoft is just - conveniently - picking up the pieces and periodically drops hints about what they'll do if anybody gets in their way of doing that.

Reply on news.ycombinator.com