We at this moment, present a snapshot of the week with insights courtesy of the team at Inside Tech and The National.
Meet the new boss, same as the old boss
Sam Altman had a rollercoaster week. EPA
In brief | Unless you've been living under a rock, chances are you've seen the commotion surrounding ChatGPT developer OpenAI and its boss Sam Altman. In that same breath, given the incredibly fast pace at which the news evolved, you'd be forgiven for not knowing the specifics.
Let's take a quick look at how everything unfolded, and, perhaps most shockingly, how it quickly folded back up.
For reasons that are still unclear, on November 18, OpenAI's board decided it was time to part ways with Altman. To call it a thunderclap felt throughout the tech world would be an understatement.
That same day, it was announced that he would be replaced on an interim basis by Mira Murati, the company's chief technology officer.
A day later, it was announced that Emmett Shear, the former boss of video-game streaming platform Twitch, would take the reins.
Meanwhile, over at Microsoft, which has a vested interest in OpenAI, chief executive Satya Nadella announced that he would hire Sam Altman to lead the company's new in-house AI team. This, in turn, caused Microsoft's stock to surge.
Back at OpenAI, hundreds of employees, upset about the abrupt dismissal of Mr Altman, threatened to quit, and suddenly one of the most talked about and treasured tech companies of the year looked like it was on the brink of disaster. Keep in mind, all of this drama was being ratcheted up against a mysterious backdrop, with many still wondering why Mr Altman was axed in the first place.
Finally, in the middle of the week, with OpenAI still reeling from the threat of mass employee defection, and potential concerns that Mr Altman would soon take his talents to Microsoft, the board announced an agreement for him to return, albeit with a drastically different board compared with the one that fired him.
"We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new initial board of Bret Taylor (chair), Larry Summers, and Adam D'Angelo," OpenAI said on social media platform X. "We are collaborating to figure out the details. Thank you so much for your patience through this."
By many accounts, these individuals mostly appear to be allies of Altman.
Even by revolving-door Silicon Valley standards, the drama and the speed at which it unfolded is enough to give even the most seasoned tech observer whiplash.
Why it matters | One of the biggest fears about artificial intelligence revolves around the potential job losses it might create. To have one of the biggest proponents and figures behind AI suddenly find himself without a job, mostly because of human factors, speaks volumes about technology and human nature. Despite all the technological advances at our fingertips, despite all the advantages we have in terms of access to data, and despite all the knowledge we've gained about corporate politics, there's still plenty to be said about the drama and back-room dealing done by human beings. In the end, even with technology growing in leaps and bounds, for better or worse, we still play a role.
Quoted | "I love OpenAI, and everything I’ve done over the past few days has been in service of keeping this team and its mission together. When I decided to join Microsoft on Sunday evening, it was clear that was the best path for me and the team. With the new board and with Satya’s support, I’m looking forward to returning to OpenAI, and building on our strong partnership with Microsoft” – Sam Altman, OpenAI chief executive
Future in focus
New AI large language model focuses on climate issues
Climate intelligence LLM |Jais Climate, the world’s first bilingual large language model dedicated to climate intelligence, has been unveiled at the Mohamed bin Zayed University of Artificial Intelligence in Abu Dhabi, just days before the Cop28 conference in Dubai
Food waste reduction | The UAE has announced a nationwide action plan to cut food waste by 50 per cent by 2030 - here's a closer look at the goals
Carbon capture rocks |Inside Fujairah's carbon capture project that converts CO2 to minerals in rocks
Cryptocurrency conundrum | Binance’s former chief executive, who has pleaded guilty to breaking anti-money laundering laws as part of a $4.3 billion settlement with the US Department of Justice, said he made mistakes and takes responsibility for the fiasco
Predicting the future: Signal or noise?
Does the web have a carbon footprint problem?
Is your website's carbon footprint too big? Does the World Wide Web need an overhaul in this climate conscious world? Those are the questions going through the mind of Ian Chew, 26, the founder of climate-tech start-up Greenie Web. “Coding was never sustainable,” he said, explaining that Greenie Web seeks to update existing websites, code and web infrastructure to make them more efficient, and therefore ecologically friendly.
This is a signal. It’s not going to be easy for every industry to reverse course and change overnight to achieve climate goals. Digital decarbonisation, however, doesn’t take much time at all. As governments look for quick ways to reduce carbon footprints, they’ll inevitably try to find solutions that aren’t labour intensive, yet yield instant results. All climate aspects aside, there is also the never-ending appetite for websites to load as fast as possible for better user experiences, and decarbonising them helps to achieve that. We’re in the early stages of an industry that seeks to make the virtual world where we all reside efficient and sustainable. Greenie Web is in on the ground floor. I expect we'll soon see companies, organisations and individuals regularly announce sustainable websites.
In case you missed it
Beyond Blue encourages learning more about the oceans
Emirates breakthrough: A380 demo flight success using sustainable bio aviation fuel
What's the outlook for dealmaking, corporate and investor sentiment, and markets?
Despite a challenging global economy and geopolitical landscape, the outlook for dealmaking, IPOs, and corporate and investor activity is expected to improve in 2024, according to Jim Esposito, Dan Dees, and Ashok Varadhan, the co-heads of Goldman Sachs' Global Banking & Markets business, on Goldman Sachs Exchanges.
For one, the market for IPOs, which started to pick up in recent months, should accelerate in the back half of 2024, especially if the Federal Reserve starts cutting rates next year, says Dees. “When you step back even further, I think the environment for capital raising will be very robust because it has to be in the years ahead,” he says. “We are in the age of innovation, of accelerating innovation. All that innovation needs to be funded.”
M&A activity should also improve. While private equity's dealmaking velocity is expected to slow with the rise in interest rates, companies are starting to step up their strategic activity, says Esposito. “I think corporates in some places were getting priced out of the market, and I do expect to see corporates starting to step in and fill the void,” he says. “We do expect to see a reasonable pickup in dealmaking activity, especially now that we seem to be through the other side of this interest rate hiking cycle.”
However, what's different about the current market cycle is the long-term debt dynamic, says Varadhan. Long-term yields have risen at a time when some buyers for that debt are pulling back. “It's hard to see long-term rates coming down meaningfully. Our base case on the trading desk is we expect a more normalized yield curve, a steeper yield curve, but really more with normalized and lower rates in the front end and not a lot of relief in the back end,” says Varadhan.
US and Japanese stocks are expected to rally in 2024
The S&P 500 index is expected to rise to 4,700 by the end of 2024, representing a price gain of about 5% and a total return of around 6% including dividends. Our economists' forecast for US GDP growth in 2024 is already reflected in stock prices.
Cash, with a 5% risk-free return, remains a competitive alternative to stocks. Three-month Treasury bills yield around 5.5%, similar to the earnings yield of the S&P 500 index.
Our analysts think there may be investment opportunities beneath the surface. "Quality" stocks — with higher profitability, stronger balance sheets, and stable sales and earnings growth — could outperform in an environment of persistent investor concern about an impending recession. Growth stocks, which have a higher expected growth rate than the rest of the market, may be attractive given stable economic growth and interest rates. Lagging cyclical stocks that are sensitive to a downturn may rally, given our economists' prediction that recession risk is lower than feared.
The TOPIX is projected to rise about 13% to 2,650 by the end of 2024.Japanese companies' earnings momentum also remains strong, Goldman Sachs Research strategists Bruce Kirk and Kazunori Tatebe write in the team's report.
They forecast 12% growth in TOPIX earnings per share in 2023, 8% in fiscal year 2024, and 7% in fiscal year 2025.
A key part of our analysts' forecast is the Tokyo Stock Exchange's corporate governance reforms, which they say “have been a game changer for the Japanese equities market.”
How private equity strategies are changing amid higher-for-longer rates
The next era is expected to be defined by slower economic growth, shrinking labor forces, and higher inflation — leaving investors and operators to contend with headwinds to topline real growth, margin compression, and a structurally higher cost of capital.
For private equity, operational value-creation levers — revenue growth and margin expansion — are poised to become the main determinants of success in the new regime. While M&A may be more challenging, organic growth may be more important. Margin enhancement is likely to rely on optimizing processes, enhancing supply chains, and rationalizing the cost structure.
New technology tools could be especially valuable for businesses and industries that are performing well but below potential. But “cautionary tales abound of companies that spent heavily on technology without reaping the full benefits due to organizational frictions,” Gelfer and Hadas point out.
Microsoft has hired ex-OpenAI CEO Sam Altman and co-founder Greg Brockman to lead a new advanced AI research team. Altman's sudden firing from OpenAI on Friday shocked the tech world as well as Microsoft, a key OpenAI investor, sparking a weekend of uncertainty and speculation about the fate of the ChatGPT creator.
More:
OpenAI's board ended Altman's employment on Friday following a "breakdown of communications."
Reports said Ilya Sutskever, OpenAI's chief scientist, spearheaded a board revolt to oust Altman amid a culture clash between the two over the speed of AI commercialization.
Soon after, supporters and investors, including Microsoft and Thrive Capital, pushed for Altman's reinstatement as CEO.
However, talks between the parties failed, leading to OpenAI's announcement late Sunday that Altman would not be returning.
Microsoft CEO Satya Nadella later revealed that Altman, Brockman, and some of their colleagues are joining the tech giant, while reaffirming Microsoft's commitment to its partnership with OpenAI.
Altman, 38, a founding co-chair of OpenAI, has been the face of the company since 2019, and his sudden departure sent shockwaves through the tech community.
In the past year, he has testified before Congress and become a spokesman for the rapidly growing AI industry.
Since his firing, OpenAI employees expressed strong support for Altman, with many posting on social media.
Over 500 of OpenAI's 700-plus employees have threatened to resign in an open letter if Sutskever and other board members do not step down.
Sutskever later wrote in a message that he "deeply regret[s] his participation in the board's actions" and "never intended to harm OpenAI."
What's next:
Shear, OpenAI's third CEO in days, stated that "the process and communications around Sam’s removal has been handled very badly, which has seriously damaged our trust."
He outlined a three-point plan including the hiring of an independent investigator to examine what led up to Altman's firing.
Shear said he also plans to reform OpenAI's management and leadership team.
"I'm not crazy enough to take this job without board support for commercializing our awesome models," Shear said.
2
The CEOs of major tech companies are expected to testify at a Dec. 6 Senate hearing about online child sexual exploitation. The Senate Judiciary Committee has issued subpoenas to the CEOs of Discord, Snap, and X, formerly Twitter, after their “repeated refusals" to appear at the hearing. The committee expects voluntary testimony from Meta CEO Mark Zuckerberg and TikTok's Shou Zi Chew.
More:
In a joint statement, Senate Judiciary Committee chair Dick Durbin and its top Republican Lindsey Graham announced plans to compel the executives to testify about their failures in protecting children online.
"Hearing from the CEOs of some of the world’s largest social media companies will help inform the Committee’s efforts to address the crisis of online child sexual exploitation," they wrote in the statement.
Subpoenas have now been issued to CEOs of Discord, Snap, and X.
According to the committee, X and Discord declined to accept subpoenas on their CEO's behalf, forcing the committee to ask the U.S. Marshals Service to serve them personally.
3
Apple's planned January launch for Apple Vision Pro is now delayed, with a likely release in March of next year, writes Bloomberg's Mark Gurman. Apple Vision Pro, the company's first mixed-reality headset, was unveiled at its June developer conference. Expected in 2024, analysts project Apple to ship 350,000 devices in year one, surging to 1.48 million in year two.
Details: Gurman reports the delay in the $3,499 headset's launch is due to Apple finalizing distribution plans and conducting last-minute device testing. The headset will debut in the U.S. at first, with plans to expand to Canada, the U.K., and other markets by the end of the year.
Zoom out: Meanwhile, some Apple retail employees have undergone Vision Pro training at Apple's HQ and will train others at their stores. Flagship stores will feature dedicated "Vision Pro" areas for people to try out the headsets, while others will have a few units for customer demos.
4
Cruise co-founder and CEO Kyle Vogt has resigned from the GM-owned company following a voluntary recall of 950 of its robotaxis. General Motors has since appointed Mo Elshenawy, formerly the executive VP of engineering at Cruise, as president and CTO, with no replacement named for the CEO role.
More:
In an X post, Vogt said the startup he launched in his garage 10 years ago "has given over 250,000 driverless rides across several cities, with each ride inspiring people with a small taste of the future."
He did not provide a reason for his resignation.
Cruise recently recalled 950 of its robotaxis and temporarily halted all vehicle operations on public roads.
The move came after the California DMV suspended Cruise’s permits for deployment and testing for its self-driving vehicles after an Oct. 2 incident.
In the incident in San Francisco, one of Cruise's cars struck and dragged pedestrian who had already been hit by another car.
5
U.K.-based phone maker Nothing has removed the "Chats" beta app from the Google Play store, citing a need for bug fixes and postponing its launch "until further notice." The app would allow Nothing's Android phone owners to text iMessage users via a blue bubble, offering a workaround in the “Android versus Apple” texting wars.
More:
Developed in collaboration with Sunbird's universal messaging platform, the Nothing Chats app aimed to bring iMessage functionality to Android users, specifically Nothing Phone (2) users.
However, the app was removed post-launch after a blog post highlighted that messages sent through Sunbird's system lacked the promised end-to-end encryption and the app was not secure.
Texts.blog pointed out that both Sunbird and the Chats app require users to share their Apple ID info, which is then authenticated using a virtual machine running MacOS on their servers.
Messaging platform Discord announced it will shut down its experimental AI chatbot, Clyde, by Dec. 1. Discord first introduced Clyde, which runs on OpenAI technology, back in March. During its testing phase, the chatbot could respond to questions and engage in conversations with Discord users.
More:
Discord did not provide a reason for the shutdown.
A spokesperson said Clyde has been "an experiment shared with a small percentage of servers," and Discord is always working to launch new experiences and features.
By Dec. 1, those who had access to the bot will no longer be able to use it in DMs or server chats, the company said.
Raising capital? Fundingstack’s DB of 200k investors is your secret weapon. Use code “Inside” for 30% off x 3 months. Start your trial here and get funded, faster.*
Apple is expected to incorporate its own in-house custom modem into cellular MacBook models as early as 2028, according to Bloomberg's Mark Gurman.
Some YouTube users are reporting a five-second delay when loading videos in non-Chrome browsers like Mozilla Firefox and Microsoft Edge.
UnitedHealth Group faces a lawsuit for allegedly employing a flawed AI algorithm to unfairly deny Medicare patients' rehab care coverage.
Meta has launched Quest For Business, a program offering mass device management for its VR headsets, replacing Oculus For Business.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/thenational/NMQCSXXYTDY2NE7KIWPKMVPL6E.jpg)
:quality(70):focal(2123x1883:2133x1893)/cloudfront-eu-central-1.images.arcpublishing.com/thenational/PXYEMFJBNQSICYQ74R666KUBW4.jpg)
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/thenational/A44C7DY7LFBWBBTHDDYCHPMBYM.jpg)
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/thenational/S55BRPBJGZAQNKFBQY4FHRG4ZM.png)
