Sam Altman, Chief Executive Officer of OpenAI, and Mira Murati, Chief Technology Officer of OpenAI, speak during The Wall Street Journal’s WSJ Tech Live Conference in Laguna Beach, California on October 17, 2023.
Patrick T. Fallon | Afp | Getty Images
Sam Altman’s sudden ouster from OpenAI on Friday shocked Silicon Valley. Not only was Altman, 38, CEO of the hottest startup on the planet, but he had emerged as the face of generative AI after his company’s ChatGPT chatbot went viral late last year.
From the outside, there were some signs of technological challenges at OpenAI, but no indications that tensions were emerging in the boardroom and the C-suite. Altman was still out and about, proselytizing the value of advanced artificial intelligence while also warning of its potential harms and advocating for regulation.
Just last month, reports surfaced that OpenAI was in talks with investors to sell employee shares at an astonishing $86 billion valuation. That’s after tech valuations corrected dramatically over the past 18 months from the decade-long bull market that was fueled by cheap money and a whole lot of FOMO (fear of missing out).
OpenAI was the industry darling in a time of difficulty. Microsoft was pouring in billions of dollars. The company topped CNBC’s Disruptor 50 list, which was published in May. Shortly before the list came out, Altman told CNBC, “I do think we are deep into a new technological wave and this is, I think, the biggest one in a while.”
That all made Altman’s exit hard to fathom and had some in the tech community comparing the move to Apple’s firing of Steve Jobs in 1985. In a statement on its website, OpenAI said, “The board no longer has confidence in his ability to continue leading OpenAI.” The company named Mira Murati, who was the chief technology officer, as interim CEO.
If you followed Altman for the past two weeks, you would’ve seen an industry leader in the center of the action. Here’s an abbreviated timeline of the days leading up to Altman’s departure:
Altman took the stage at OpenAI’s DevDay event in San Francisco, where he announced GPT-4 Turbo, the company’s most powerful AI model. Users were also given access to all of OpenAI’s tools, such as its image-generator DALL-E and PDF upload, within ChatGPT.
At the event, Altman said prices for OpenAI’s software would be cut and individual users could customize ChatGPT. He also unveiled an OpenAI app store, an additional way that the company and its investors could monetize its products.
In a surprise appearance, Microsoft CEO Satya Nadella joined Altman on stage to discuss the future of OpenAI and their partnership. Microsoft committed an additional $10 billion earlier this year, the largest AI investment of 2023, according to PitchBook.
“I think we have the best partnership in tech,” Altman told Nadella onstage. “I’m excited for us to build AGI together,” he said, referring to artificial general intelligence.
ChatGPT temporarily crashed in the morning. The chatbot told users that “ChatGPT is at capacity right now” and the update page called it a “major outage.” After a little over an hour, the issue was fixed before experiencing difficulties again later in the day.
OpenAI said in the evening that its issues were related to a denial-of-service (DDoS) attack.
“We are dealing with periodic outages due to an abnormal traffic pattern reflective of a DDoS attack,” the company said.
Issues persisted into the next day before being fixed.
Altman posted on X, formerly Twitter, that there would be a pause in signing up for ChatGPT Plus. He said there had been a surge in requests after the DevDay announcements and that usage “has exceeded our capacity and we want to make sure everyone has a great experience.”
Altman appeared at the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, speaking on AI.
At 3:28 p.m. ET on Friday, OpenAI published the blog post announcing Altman’s dismissal. At the same time, the company said Greg Brockman, OpenAI’s president, was being stripped of his role as chairman of the board but would stay on as an executive.
Here’s what happened next:
Altman made his first public statement about his departure, writing on X that his experience at the company was “transformative for me personally, and hopefully the world a little bit.”
Brockman announced on X that he’d quit the company “based on today’s news,” and said he was “super proud of what we’ve all built together since starting in my apartment 8 years ago.”
In an X post, Brockman provided a detailed account of Altman’s removal.
He said that on Thursday night, Altman received a text from OpenAI co-founder Ilya Sutskever asking if they could talk the next day at noon. On Friday afternoon, Brockman wrote, Altman joined a Google Meet with OpenAI board members Sutskever, Tasha McCauley, Adam D’Angelo and Helen Toner. Brockman, who was chairman of the board at this time, wasn’t there.
In the meeting, Sutskever told Altman he was out as CEO. Shortly after that, Sutskever informed Brockman he was being removed as chairman but could remain president. OpenAI’s blog post was released at “around the same time,” Brockman wrote.
He said that it appeared Murati only knew of the move the night before. Altman reposted Brockman’s chronicling of the events.
Chief Operating Officer Brad Lightcap sent a memo to OpenAI employees addressing the firing. Lightcap said everyone was caught by surprise at the board’s decision and said Murati “has our full support as CEO.”
“We can say definitively that the board’s decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices,” Lightcap wrote.
— CNBC’s Jordan Novet contributed to this report
China’s EV carmaker Nio jumps 4% after reporting narrower-than-expected losses
Nio’s ET5 stands on display at the Central China International Auto Show on May 25, 2023, in Wuhan, China.
Getty Images | Getty Images News | Getty Images
Nio on Tuesday reported narrowing losses in the third quarter, but gave a revenue forecast below market expectations.
Here’s how Nio did in the third quarter, according to LSEG consensus estimates:
- Revenue: 19.1 billion Chinese yuan ($2.7 billion) versus 19.4 billion yuan expected.
- Loss per share: 2.67 yuan per share loss versus 2.91 yuan loss expected. That was smaller than the 3.7 yuan per share loss recorded in the second quarter of the year.
Revenue rose 47% year-on-year.
Nio shares were around 4% higher in pre-market trade in the U.S., reversing earlier losses that followed the results.
Investors are focusing on the Chinese electric carmaker’s ability to be more disciplined in its spending, as it charts a path to profitability.
Nio CEO William Li reiterated the company’s focus on being more efficient.
“We have identified opportunities to optimize our organization, reduce costs and enhance efficiency,” Li said Tuesday.
Some of those efforts are already bearing fruit. Nio reported a net loss of 4.6 billion yuan in the third quarter, down 24.8% from the second quarter of 2023, but still higher than the same period of 2022.
The company also cut 10% of its workforce last month, citing “fierce competition.”
On top of that, Chinese consumers remain cautious on spending, which could weigh on Nio’s strategy to appeal to the premium segment of the local EV market.
The company said fourth-quarter revenue will be between 16.1 billion yuan and 16.7 billion yuan, representing a year-on-year increase of between 0.1% to 4.0%. Analysts expected a forecast of 22.4 billion yuan in the December quarter.
Nio also anticipates it will deliver between 47,000 and 49,000 vehicles in the fourth quarter — a hike of approximately 17.3% to 22.3% year-on-year.
Nio’s gross margin was 8% in the third quarter, down from 13.3% in the same period last year.
As Nio is yet to turn a profit since it was founded in 2014, the company is trying to show investors that it can balance the need for investments, while also being more disciplined with costs.
Li said on Tuesday that Nio would defer or terminate any projects that won’t bring a financial contribution in the coming three years. He added that the company will make sure that it doesn’t “dilute” investments in core areas like technology and its sales and service network, as it prepares “for the more intense competition in the coming two years.”
As part of this push, Nio on Tuesday announced that it has entered into an agreement to acquire certain manufacturing equipment and assets from Anhui Jianghuai Automobile Group Corp. (JAC) for 3.16 billion yuan. JAC currently manufactures Nio cars.
Li said that bringing manufacturing entirely in house could reduce the costs of such operations by 10%, but that the company would exclude battery manufacturing from being drafted in-house, as the measure would not improve gross margin.
Nio CFO Steven Wei Feng said that the company’s vehicle margin, which was 11% in the third quarter, can rise to 15% in the fourth quarter, helped by lower material and component costs, as well as better manufacturing capacity.
In 2024, the company is targeting a vehicle margin of between 15% and 18%, the CFO said.
Reproductive startup launches test to identify an embryo’s genetic defects before an IVF pregnancy begins
Noor Siddiqui, founder and CEO of Orchid, during the web summit for careers during Day 2 of the 2014 Web Summit in Dublin, Ireland, Nov. 5, 2014.
Stephen McCarthy | Getty Images
Reproductive technology startup Orchid on Tuesday announced a comprehensive new genetic test that may help many prospective parents across the U.S. breathe a little easier.
The company is launching the first commercially available whole genome sequencing report for embryos, designed for couples undergoing in vitro fertilization, which is a type of treatment for people experiencing infertility or who are at risk of passing on genetic problems.
With IVF, after a woman has had around two weeks of daily hormone injections, her mature eggs are extracted and fertilized in a lab, and the viable embryos are later transferred into the uterus.
Orchid said its new test will help couples identify whether their embryos present genetic risks such as birth defects, neurodevelopmental disorders, chromosomal abnormalities, or pediatric and adult-onset cancers that were previously only detectable after birth.
“This is a major advance in the amount of information parents can have,” Noor Siddiqui, Orchid’s founder and CEO, told CNBC in an interview. “The way that you can use that information is really up to you, but it gives a lot more control and confidence into a process that, for all of history, has just been totally left to chance.”
Orchid’s technology sequences more than 99% of an embryo’s genome, while existing tests typically read around .25%, the company said in a release.
IVF is a taxing process that can cost an average of more than $12,000 in the U.S., according to the Institute for Reproductive Health. Success is not guaranteed, and some people go through multiple rounds of IVF before a pregnancy develops.
Orchid’s genetic test will cost couples an additional $2,500 per embryo sequenced, but it does not add any new steps or risks to the IVF process, Siddiqui said. She added that the cost of the report should come down as the company is able to scale up its operations and introduce more automation.
“We want to make this something that’s accessible to everyone,” Siddiqui said.
Beginning Tuesday, Orchid’s technology will be available at IVF clinics in major cities such as Los Angeles, Chicago, Miami and Austin, and Siddiqui said Orchid can be made available at additional clinics at the request of patients.
Couples will receive their report back from Orchid after about three weeks, the company said, and a board-certified genetic counselor will help them understand the results.
Orchid’s whole genome embryo report
Orchid has secured $12 million in funding from investors such as Prometheus Fund and Refactor Capital. Anne Wojcicki, the co-founder and CEO of 23andMe; Dylan Field, the co-founder and CEO of Figma; Fidji Simo, the CEO of Instacart; Brian Armstrong, the co-founder CEO of Coinbase, and others are also backers.
For many hopeful parents, the peace of mind is worth Orchid’s steep price.
Roshan George, a 35-year-old engineer in San Francisco, began the IVF process with his wife, Julie, in the fall.
George said they were feeling some anxiety about having a baby at an older age, and their nerves were amplified after their IVF clinic discovered they are both carriers for nonsyndromic hearing loss, which can result in a partial or total loss of hearing.
George had heard of Orchid through some friends, he said, and the couple decided to sequence all three of their viable embryos with the company. He said getting the embryos tested was very straightforward, and when the results came back, they discovered that two out of the three embryos were healthy.
“We were super relieved right off the bat,” George told CNBC in an interview. “That was very gratifying to hear.”
“Just having some degree of certainty — you’re going to make sure they’re not sick when they’re born and all that sort of stuff — it’s a huge amount of anxiety that’s been lifted off,” George said.
George Church, a professor of genetics at Harvard Medical School, is an investor and an adviser at Orchid. Church developed the first direct genome sequencing method, he said, and Orchid’s technology will give parents the ability to access a hundred times more information about their baby than they could attain previously.
Church said it is “perfectly logical” for parents to care about helping their children, whether it pertains to their genetic health, the quality of their food or whether they get enough sleep and exercise.
He added that people often think that genetic risks don’t apply to them, or that there’s nothing they can do if something is wrong. But with Orchid, Church said parents have the detailed information they need to make informed decisions.
“If you went to Las Vegas with a 97% chance of winning, you would definitely go to Las Vegas,” Church told CNBC in an interview. “But it’s different when you’re talking about quarters as opposed to children.”
Orchid’s primary focus after the launch Tuesday will be on scaling up its technology and making it more accessible, Siddiqui said.
She said Orchid has spent an “enormous amount of effort” identifying the mutations that will cause severe disease during pregnancy or early childhood or result in serious chronic conditions. She wanted to ensure the company is able to provide parents with information that is “super meaningful.”
“I think this has the potential to totally redefine reproduction,” Siddiqui said. “I just think that’s really exciting to be able to make people more confident about one of the most important decisions of their life, and to give them a little bit more control.”
Take-Two shares tumble as Rockstar Games publishes Grand Theft Auto trailer early after leak
Strauss Zelnick, CEO of Take Two Interactive.
Adam Jeffery | CNBC
Shares of video game publisher Take-Two Interactive Software fell 4% in extended trading on Monday after the company released its trailer for the next version of the Grand Theft Auto game, which will come out in 2025. The company had originally planned to put out the trailer hours later, at 6 a.m. ET. on Tuesday, Dec. 5, but a leak caused Take Two to move up its timeline.
The video was originally leaked on X, formerly known as Twitter. After that, Rockstar Games, a subsidiary of Take-Two, published the trailer on YouTube.
Grand Theft Auto VI is likely to impact Take Two shares upon its release. Grand Theft Auto V debuted in 2013, and it’s now the second best-selling video game in history, having sold more than 190 million copies. It’s only behind Microsoft-owned Minecraft, of which over 300 million copies have been sold.
Gamers have been eager for details about the new game for years. Sam Houser, Rockstar’s founder, announced in early November that the trailer would come out in December.
“As the label approaches its 25th anniversary next month, we congratulate Rockstar Games on their constant innovation in the pursuit of the highest quality interactive entertainment,” Take-Two CEO Strauss Zelnick told analysts on a November conference call.
You can watch the new trailer below:
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