Silicon Valley’s ‘scale at all costs’ model: A profile of OpenAI

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Silicon Valley’s ‘scale at all costs’ model: A profile of OpenAI

00:00 Speaker A

OpenAI is eyeing global expansion, partnering with UAE’s G42 to build an AI data center in Abu Dhabi. This comes as the company is also making a move to buy Johnny Ive’s AI device startup company, making a push into hardware. For more on the ChatGPT maker’s strategic moves, we have investigative journalist Karen Hao, who began covering OpenAI back in 2019, and recently came out with a new book. It’s called Empire of AI: Dreams and Nightmares in Sam Altman’s OpenAI. Karen, great to have you here on set. I don’t think, Karen, you could have picked a better week to come out with a new book on OpenAI. The news flow has been constant. I want to get your take on some of that news, but first, just broadly, you’ve got this new book. Why did you write the book, Karen? The point and purpose? What was the message you were trying to get across to readers?

01:55 Karen Hao

Yeah, absolutely. I think everyone, a lot of people in the public, their introduction into AI was really a ChatGPT moment. And there was sort of a lot of contextlessness around the discourse of AI where it sort of felt like this technology just landed from the sky and it wasn’t really clear where it came from, who it came from, what it was going to do to society. And because I’ve been covering the company since 2019, and AI since 2018, I really wanted to put some context behind this moment, and really show that technology is not actually inevitable. And that the way that it’s being developed right now, we should actually have serious concerns about, but we have a role to shape the way AI will continue to be developed in the future.

03:05 Speaker A

And I want to get to some of those concerns you outline. But first, I do want to get your take because I’m just curious, the news flow this week, and there’s been a lot of it. We had, as we mentioned, OpenAI, they decided to buy one of Johnny Ive’s startups for an impressive price tag. Then this morning they announced Stargate UAE. You add it up, as someone who’s thought a lot about Altman and the company, what is Altman trying to achieve here? When you see that news, what does it tell you about where the company is, where he wants to take it?

04:02 Karen Hao

Altman said recently in an interview that his strategy is to cover the field. He’s trying to do as much as possible. And with the Johnny Ive thing, I mean, he’s been a Steve Jobs fanboy for a really long time. He’d been talking with Johnny Ive because he’s the icon that worked with Steve Jobs, and he’d been trying to close the deal. So that’s kind of the culmination of those two intersecting forces, Altman really trying to put his tentacles in all of these different spaces and trying to really get closer to that Jobs dream. Um, but with the UAE stuff, I mean, this really goes back to some of the things that I highlighted in my book about the costs of the technology where there is so much computational resources, data centers, supercomputers that need to be built to serve Silicon Valley’s particular conception of what AI should be, which is very much a model of scale at all costs. And that’s why they are starting to move all around the world to build these huge pieces of infrastructure such as in the UAE.

05:50 Speaker A

By the way, it’s a very interesting take you had on Johnny Ive because the take that’s out there as well, he wants to move into hardware, so of course he goes with Sir Johnny Ive, Silicon Valley titan, legend. But also it’s your point, maybe to get closer to the legend that is Steve Jobs as well. That’s interesting. Let me ask you this, when you think about OpenAI’s role and kind of place in that broader LLM market, large language market, is it still, is Altman still in number one? He has the gold and everybody else is still trying to fight for number two, or is the market evolving?

06:54 Karen Hao

It’s a great question because if you think about OpenAI’s lead in terms of household name recognition, it’s number one. You know, everyone knows ChatGPT. But from a research capabilities perspective, I talk with application developers now who use these technologies all the time, and they’re trying to build their applications to be model vendor agnostic because they don’t actually think any company has a lead anymore. And they want to be able to plug into OpenAI one day, plug into Anthropic the next day, and plug into

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the third day.

07:43 Speaker A

And what does that mean, Karen, then ultimately for that market? It becomes all commoditized?

07:48 Karen Hao

It’s going to be completely commoditized. But all of these companies are now moving towards a strategy where instead of differentiating themselves from the research and the capabilities, they’re trying to differentiate themselves from products. And that is again, kind of leads us back to why he’s trying to strike up this partnership with Johnny Ive. He’s really trying to move into even more intuitive user interfaces that hook people into his company.

08:30 Speaker A

I have to ask you, after researching this book, reporting this book, writing it all out, do you use ChatGPT?

08:42 Karen Hao

I don’t use ChatGPT.

08:45 Speaker A

Which is, that is interesting. Why, Karen? Why don’t you use that?

08:51 Karen Hao

First of all, I investigate the company, so I’m not going to willingly give a lot of my data to this company. But secondly, I really focus on how this particular vision of AI development has a supply chain that contains a lot of environmental, social, and labor harms. It’s sort of…

09:20 Speaker A

So what do you mean by that, the environmental, social, labor harms? Karen, spell that out.

09:28 Karen Hao

Yes, so because they are trying to pursue models that are really, really large, and have to train on an internet’s worth of data, and have to train on these huge supercomputers that are now hundreds of football fields in size, there are huge energy draws that these data centers use. They have to use a lot of water. They are now being powered by a lot of fossil fuel resources. Um, and ultimately, many of these technologies are labor-automating technologies. OpenAI’s definition of artificial general intelligence is highly autonomous systems that outperform humans in most economically valuable work. And so they’re trying to create something that will erode away job opportunities for people.

10:25 Speaker A

Given those concerns then, Karen, how do you address some of that? Is the smart way to address it, is it regulators, policymakers, lawmakers?

10:39 Karen Hao

I think it’s all of that. And I like to draw an analogy to the fashion industry, which also, for a very long time, had huge environmental, social, and labor harms in their supply chain. And not only was it top-down regulation, legislation, international human rights organizations drawing a limelight to this issue, but also consumers choosing to actually change their behaviors, not buy clothes from brands that might not care about these things, and thereby creating entire markets for ethical and sustainable fashion.

11:18 Speaker A

Final question is, you were reporting this out, did OpenAI, did they cooperate with you, Karen, in this? Did they participate in this project?

11:27 Karen Hao

They did not.

11:29 Speaker A

They did not. Did they give a reason why not?

11:32 Karen Hao

They, we’ve had a long history. I was the first journalist to ever profile the company. They did not like the profile because I drew my own conclusions. And since then, it’s, they haven’t really given access, but I’ve continued to report, and I’ve continued to talk to insiders. And insiders continued to talk to me because they said that my profile was actually really accurate.

12:00 Speaker A

Well, listen, Karen, congrats on the book, and we appreciate your time today. That was great.

12:05 Karen Hao

Thank you so much for having me.

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