The OpenAI Saga, AI Shortcomings and Apple’s Opportunity

Happy Monday.

The tech news flow had no interest in taking a breather ahead of Thanksgiving this year.

In today’s update, we will talk about the OpenAI situation which is still unfolding as of Monday afternoon. There are some connections to Apple when it comes to the broader AI space.

Let's jump into today's update.

The OpenAI Saga

There are some tech news stories that simply need time to pass before taking a deep dive into them. That applies to OpenAI, the AI start-up responsible for kicking off the generative AI buzz/hype cycle with ChatGPT. Some of the OpenAI drama ends up being irrelevant to these updates. However, there is enough here, especially with Microsoft’s involvement that would be of interest to Apple. Once more time passes, we can revisit the takeaways.

Here’s a very quick recap of what happened.

This past Friday, OpenAI's board fired co-founder and CEO Sam Altman. As part of the board’s decision, co-founder Greg Brockman, who was Open AI’s chairman and president, was booted off the board. He quit instead. This kicked off something of a social-media fueled frenzy involving Altman and Brockman trying to return to OpenAI via an employee and investor uprising. Instead, both announced they would head to Microsoft. OpenAI employees are now pledging to do the same.

Here are a few of my prevailing thoughts:

1) Blindspot. In what may end up being the biggest lesson from this drama, Sam Altman had a major blindspot in terms of not having firm control over the OpenAI board. While there is an unusual governance hierarchy at play when it comes to the OpenAI board and its responsibilities (described below), Altman should have known that the possibility of being fired existed. This was not a Black Swan event, although most will say it was. The fact that the OpenAI board was not reinforced after key departures (Reid Hoffman etc.) to be closely aligned with Altman was a huge mistake on his part.

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Microsoft’s Copilot Event, Microsoft (Quietly) Pulling the Surface Plug, Apple Is Thinking Differently

Hello everyone. Last Thursday, we talked about Amazon's product event. Today, we focus on the Microsoft event that took place last week.

Let's jump right in.

Microsoft’s Copilot Event

For Amazon’s product event, the overall theme was a smarter, more conversational Alexa with the company betting on voice as the medium to push generative AI in the home. Last Thursday, Microsoft held its annual fall event for new products in NYC. A video of the presentation is available here.

Out of the two, Microsoft’s event came across as weaker. Some people wondered if Panos Panay’s surprise departure complicated Microsoft's event plans. It's not clear how much advanced notice Panay provided Microsoft. The event did have the vibe of being thrown together at the last moment. Coming in at only 58 minutes, a good portion of which went to demos and CEO Satya Nadella's opening monologue, the presentation was lean. One wonders why Microsoft even bothered to hold an actual in-person event.

Without Panay's energy, the audience seemed to be asleep for much of the presentation.

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