Vol. I, No. 24
Covering 6 November - 19 November 2023
Monday, November 20, 2023
Late edition · A Relentless publication
The Relentless Dispatch
All the fortnight that mattered, in technology and in the world, read next to what we were building at the time.
SAN FRANCISCO

OpenAI fires the man who made ChatGPT, and by the weekend nobody knows who runs the most important company in AI

On a Friday afternoon the board of OpenAI abruptly removed Sam Altman. Over 72 hours the company nearly collapsed, Microsoft moved to hire him, and the question of who controls artificial intelligence stopped being abstract.

The board of OpenAI, the company whose ChatGPT started the AI age a year ago, abruptly fired its chief executive, Sam Altman, on the afternoon of November 17, announcing that he had not been "consistently candid" with the directors and that the board no longer had confidence in him. It gave no specifics, and the vagueness detonated. The company's president quit in solidarity within hours. Investors, led by Microsoft, which has poured more than $10 billion into OpenAI and learned of the firing minutes before the public, were furious. Employees revolted. Over a chaotic weekend the board first sought to bring Altman back on new terms, then did not; Microsoft announced it would hire him and his allies to run a new in-house AI lab; and hundreds of OpenAI's roughly 770 employees signed a letter threatening to follow him to Microsoft unless the board resigned. As this issue went to press the outcome was genuinely unknown, and the most important company in the most important technology of the moment had no stable leadership and no clear owner of its future.

Underneath the drama is a structural question the drama made impossible to ignore. OpenAI is not a normal company. It is a capped-profit business controlled by a non-profit board whose legal duty is not to shareholders but to a mission: ensuring that artificial general intelligence "benefits all of humanity." That board, some of whose members are aligned with the movement that worries most about AI's dangers, appears to have concluded that Altman's breakneck commercialisation had drifted from that mission, and used the one lever it had, the power to remove him. The lever nearly destroyed the company, because a mission-driven board and a business worth eighty billion dollars turn out to be bound together by threads that a single Friday can snap. Whoever ends up running OpenAI, the episode exposed the thing the whole industry prefers not to examine: that the governance of the systems everyone says could reshape or endanger civilisation is improvised, fragile, and decided, when it comes to it, by a handful of people in a room over a weekend.

CRICKET

Australia breaks Indian hearts in the final, in front of 92,000 who came to see a coronation

India's cricket team, unbeaten through the entire World Cup, carrying the hopes of a billion people and playing the final at home, lost. Australia beat them by six wickets in Ahmedabad on November 19, in a stadium built for 132,000 and packed with a home crowd that had come to celebrate and instead fell, by the end, into a silence you could hear on television. India had been imperious for six weeks, winning every match, its batting and bowling both dominant; Australia, the tournament's great front-runners, did what they do, absorbed the pressure and struck when it mattered, and a nation that had allowed itself to believe went quietly home. Sport is the cruelest theatre because the script is not written, and the crowd that came for a coronation got a wake, and the Australians, gracious and ruthless, lifted the cup on Indian soil in front of the largest silence in the game's history.

IN BRIEF

Biden meets Xi; Argentina turns to a chainsaw; a former first lady dies

President Biden and China's Xi Jinping met near San Francisco on November 15, their first encounter in a year, and agreed to restore the military-to-military communications that had been severed, a modest thaw in the most consequential rivalry on Earth. Argentina elected Javier Milei, a libertarian economist who campaigned waving a chainsaw and promising to dollarise the economy and abolish the central bank, a rupture born of a country exhausted by inflation above 140 percent. And Rosalynn Carter, the former first lady who redefined the role as a working partner to her husband and an advocate for mental health across four decades, died on November 19 at 96.

The Column

Who actually controls the machine

The board of the most important AI company fired its chief executive on a Friday, and by the weekend no one outside the room could say who runs it. The governance of the technology everyone claims to fear is being improvised, in real time, by a handful of people.

By Daniel Reeve

The most revealing thing about the chaos at OpenAI this fortnight is not any of the personalities, about whom we still know little, but the sheer fragility it exposed at the heart of the industry that keeps telling us it is building the most consequential and potentially dangerous technology in human history. On Friday, the board fired the chief executive. By Sunday, no one, not the employees, not the investors, not the public, could say with confidence who would be running the company by the following week. The organisation that leads the field, whose product started the AI age, whose founders speak in the language of existential stakes, turned out to be governable, or ungovernable, at the whim of a weekend, its future decided in a room the size of a boardroom by a handful of people improvising under pressure.

Consider what this reveals, whatever the outcome. OpenAI was deliberately built with an unusual structure, a business controlled by a non-profit board whose duty was to a mission rather than to profit, precisely because its founders believed that a technology this powerful needed a check on the ordinary commercial drive to move fast and capture markets. This fortnight that structure did something, fired the man at the top, for reasons it would not fully explain, and the result was not sober governance but pandemonium: the company nearly destroyed, the investors in revolt, the staff threatening to walk en masse, the compute provider circling. Whether the board was right or catastrophically wrong, the episode showed that the actual governance of frontier AI, the real mechanism by which the most important decisions get made, is not some careful, robust, deliberative apparatus. It is a few people, a structure no one fully understood until it was tested, and an enormous amount of money exerting pressure on all of it at once.

And that should unsettle anyone, on any side of the debate about whether AI is overhyped or genuinely dangerous, because both positions assume there is some grown-up in charge, some stable structure making the weighty calls. This fortnight suggested there is not, or at least that the structure is far more brittle than its architects claimed. The people building the thing they describe as civilisation-altering cannot reliably govern their own boardroom. However this particular drama resolves, it has already delivered its lesson: the control of this technology is not a solved problem being managed by serious institutions. It is being worked out on the fly, by a small number of people, under the crushing weight of the money that wants it to go faster, and the safeguards we have been told to trust are exactly as strong as one bad weekend reveals them to be. We are about to find out how strong that is.

Field Notes
A Relentless build, told plainly

Building a lead-management system from scratch, and learning that the money is in the follow-up nobody does

This issue's front page is about the governance of the most valuable company in AI. This is about something humbler and, for most businesses, more immediately profitable: making sure that a person who raises their hand as a potential customer is not quietly lost. No client is named.

By Alosh Paul

For a large rental-housing operator I once built, from nothing, the system that handles a lead: a person who has expressed interest in renting a home, from the moment their interest first appears to the moment they become a resident. It sounds like the most basic thing in the world, and in a sense it is, which is exactly why it is so often done badly. Almost every business believes it manages its leads. Very few actually do, in the sense of knowing where every interested person is in the process and making sure not one of them falls through a crack. The cracks are where the money goes, and they are almost invisible, because a lost lead does not complain. It just quietly rents somewhere else, and no one ever knows the revenue that walked out the door.

The system tracked every lead and every application through every stage, automatically, so that a person who inquired on a Monday and heard nothing by Wednesday was not forgotten but flagged, and the follow-up that turns interest into a signed lease was a step the process insisted on rather than a thing a busy leasing agent might or might not get to. That last distinction is the whole of it. The difference between a good lead system and a bad one is not the database; anyone can store leads. It is whether the follow-up is something the system makes happen or something it merely makes possible. Interest is perishable. A person excited about a home on Monday is a different, cooler person by Friday, and the business that reaches them Monday afternoon converts them and the business that reaches them next week does not, and both businesses had the exact same lead.

What that build taught me, and what I have carried into everything since, is that the unglamorous middle of a process is almost always where the value hides. Everyone wants to work on getting more leads, the marketing, the ads, the top of the funnel, because it is visible and exciting and you can point to the number. Almost nobody wants to work on the nurture, the boring, patient, automated follow-up in the middle, because it is tedious and invisible and no one gets a bonus for a lead that did not leak away. But I have seen, with my own numbers, that fixing the leaky middle is usually cheaper than buying more leads and worth more, because you already paid to get those people to raise their hands and you are simply, currently, dropping them. The revenue that changed hands when we built this was not new demand. It was demand the business already had and had been quietly losing, caught at last by a system that refused to let a raised hand go unanswered.

The Ledger
AI
The OpenAI drama is a governance story dressed as a soap opera. Beneath it: the control of frontier AI is improvised and fragile, and a non-profit mission and an $80 billion business are bound by threads a weekend can snap. Whoever wins, the fragility is the finding.
Data centers & power
Microsoft's willingness to absorb OpenAI's entire staff in a weekend is a reminder of where the leverage sits: with the company that owns the compute and the cash. The infrastructure layer holds the power, again.
Rates
A softer inflation reading and the Fed's pause have markets convinced the next move is down; bond yields fell sharply and stocks rallied. The soft-landing narrative, once a hope, is becoming the base case.
Real estate
Mortgage rate 7.44 percent (November 16), easing slightly from the peak as yields fall. The first faint hope of thaw, if the rate cuts the market now expects actually arrive next year.
India tech
The World Cup loss is a fortnight's heartbreak, not a trend. The trend underneath, a confident, capable, ascendant Indian technology and sporting culture, is intact, and a final lost at home does not change it, whatever it felt like on the night.
What we called wrong
Nothing to retract, but the OpenAI chaos underlines a caution we made in No. 11: when we warned that AI governance was being drawn by the incumbents who would live inside it, we assumed the incumbents were stable. This fortnight the most important one nearly destroyed itself over exactly the mission-versus-money question we said would define the field.
The Back Page

The steel magnolia

Rosalynn Carter, who died on November 19 at 96, was married to Jimmy Carter for 77 years, the longest presidential marriage in American history, and she was never only the wife of the president. She sat in on cabinet meetings, took notes, was called by her husband his "equal partner," and drew criticism at the time for a first lady who so plainly shared the work. She made mental health her cause when it was a subject people did not discuss in polite company, and stayed on it for fifty years, long after the White House, when she and Jimmy went home to the small Georgia town they never really left and built houses for the poor with their own hands into their nineties. She was called the "steel magnolia," soft-spoken and unbendable, and the pairing was exact. Her husband, 99 and in hospice care, outlived her by a whisper, holding her hand at the end of a marriage that had lasted longer than most people get to live. They met when she was a newborn and he was three; he is said to have told his mother, the day he first took her out, that he had met the girl he would marry. He was right for the next seventy-seven years.