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OpenAI CEO Sam Altman speaks during the Microsoft Build conference at Microsoft headquarters in Redmond, Washington, on May 21, 2024. 

Jason Redmond | AFP | Getty Images

A group of current and former OpenAI employees published an open letter Tuesday describing concerns about the artificial intelligence industry’s rapid advancement despite a lack of oversight and an absence of whistleblower protections for those who wish to speak up.

“AI companies have strong financial incentives to avoid effective oversight, and we do not believe bespoke structures of corporate governance are sufficient to change this,” the employees wrote in the open letter.

OpenAI, Google, Microsoft, Meta and other companies are at the helm of a generative AI arms race — a market that is predicted to top $1 trillion in revenue within a decade — as companies in seemingly every industry rush to add AI-powered chatbots and agents to avoid being left behind by competitors.

The current and former employees wrote AI companies have “substantial non-public information” about what their technology can do, the extent of the safety measures they’ve put in place and the risk levels that technology has for different types of harm.

“We also understand the serious risks posed by these technologies,” they wrote, adding that the companies “currently have only weak obligations to share some of this information with governments, and none with civil society. We do not think they can all be relied upon to share it voluntarily.”

The letter also details the current and former employees’ concerns about insufficient whistleblower protections for the AI industry, stating that without effective government oversight, employees are in a relatively unique position to hold companies accountable.

“Broad confidentiality agreements block us from voicing our concerns, except to the very companies that may be failing to address these issues,” the signatories wrote. “Ordinary whistleblower protections are insufficient because they focus on illegal activity, whereas many of the risks we are concerned about are not yet regulated.”

The letter asks AI companies to commit to not entering or enforcing non-disparagement agreements; to create anonymous processes for current and former employees to voice concerns to a company’s board, regulators and others; to support a culture of open criticism; and to not retaliate against public whistleblowing if internal reporting processes fail.

Four anonymous OpenAI employees and seven former ones, including Daniel Kokotajlo, Jacob Hilton, William Saunders, Carroll Wainwright and Daniel Ziegler, signed the letter. Signatories also included Ramana Kumar, who formerly worked at Google DeepMind, and Neel Nanda, who currently works at Google DeepMind and formerly worked at Anthropic. Three famed computer scientists known for advancing the artificial intelligence field also endorsed the letter: Geoffrey Hinton, Yoshua Bengio and Stuart Russell.

“We agree that rigorous debate is crucial given the significance of this technology and we’ll continue to engage with governments, civil society and other communities around the world,” an OpenAI spokesperson told CNBC, adding that the company has an anonymous integrity hotline, as well as a Safety and Security Committee led by members of the board and OpenAI leaders.

Microsoft declined to comment.

Mounting controversy for OpenAI

Last month, OpenAI backtracked on a controversial decision to make former employees choose between signing a non-disparagement agreement that would never expire, or keeping their vested equity in the company. The internal memo, viewed by CNBC, was sent to former employees and shared with current ones.

The memo, addressed to each former employee, said that at the time of the person’s departure from OpenAI, “you may have been informed that you were required to execute a general release agreement that included a non-disparagement provision in order to retain the Vested Units [of equity].”

“We’re incredibly sorry that we’re only changing this language now; it doesn’t reflect our values or the company we want to be,” an OpenAI spokesperson told CNBC at the time.

Tuesday’s open letter also follows OpenAI’s decision last month to disband its team focused on the long-term risks of AI just one year after the Microsoft-backed startup announced the group, a person familiar with the situation confirmed to CNBC at the time.

The person, who spoke on condition of anonymity, said some of the team members are being reassigned to multiple other teams within the company.

The team’s disbandment followed team leaders, OpenAI co-founder Ilya Sutskever and Jan Leike, announcing their departures from the startup last month. Leike wrote in a post on X that OpenAI’s “safety culture and processes have taken a backseat to shiny products.”

Ilya Sutskever, Russian Israeli-Canadian computer scientist and co-founder and Chief Scientist of OpenAI, speaks at Tel Aviv University in Tel Aviv on June 5, 2023.

Jack Guez | AFP | Getty Images

CEO Sam Altman said on X he was sad to see Leike leave and that the company had more work to do. Soon after, OpenAI co-founder Greg Brockman posted a statement attributed to himself and Altman on X, asserting that the company has “raised awareness of the risks and opportunities of AGI so that the world can better prepare for it.”

“I joined because I thought OpenAI would be the best place in the world to do this research,” Leike wrote on X. “However, I have been disagreeing with OpenAI leadership about the company’s core priorities for quite some time, until we finally reached a breaking point.”

Leike wrote he believes much more of the company’s bandwidth should be focused on security, monitoring, preparedness, safety and societal impact.

“These problems are quite hard to get right, and I am concerned we aren’t on a trajectory to get there,” he wrote. “Over the past few months my team has been sailing against the wind. Sometimes we were struggling for [computing resources] and it was getting harder and harder to get this crucial research done.”

Leike added that OpenAI must become a “safety-first AGI company.”

“Building smarter-than-human machines is an inherently dangerous endeavor,” he wrote. “OpenAI is shouldering an enormous responsibility on behalf of all of humanity. But over the past years, safety culture and processes have taken a backseat to shiny products.”

The high-profile departures come months after OpenAI went through a leadership crisis involving Altman.

In November, OpenAI’s board ousted Altman, saying in a statement that Altman had not been “consistently candid in his communications with the board.”

The issue seemed to grow more complex each day, with The Wall Street Journal and other media outlets reporting that Sutskever trained his focus on ensuring that artificial intelligence would not harm humans, while others, including Altman, were instead more eager to push ahead with delivering new technology.

Altman’s ouster prompted resignations or threats of resignations, including an open letter signed by virtually all of OpenAI’s employees, and uproar from investors, including Microsoft. Within a week, Altman was back at the company, and board members Helen Toner, Tasha McCauley and Ilya Sutskever, who had voted to oust Altman, were out. Sutskever stayed on staff at the time but no longer in his capacity as a board member. Adam D’Angelo, who had also voted to oust Altman, remained on the board.

American actress Scarlett Johansson at Cannes Film Festival 2023. Photocall of the film Asteroid City. Cannes (France), May 24th, 2023

Mondadori Portfolio | Mondadori Portfolio | Getty Images

Meanwhile, last month, OpenAI launched a new AI model and desktop version of ChatGPT, along with an updated user interface and audio capabilities, the company’s latest effort to expand the use of its popular chatbot. One week after OpenAI debuted the range of audio voices, the company announced it would pull one of the viral chatbot’s voices named “Sky.”

“Sky” created controversy for resembling the voice of actress Scarlett Johansson in “Her,” a movie about artificial intelligence. The Hollywood star has alleged that OpenAI ripped off her voice even though she declined to let them use it.

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Tech founders are shunning IPOs after extended market lull, survey finds

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Tech founders are shunning IPOs after extended market lull, survey finds

Pedestrians pass the Nasdaq MarketSite in New York, US, on Tuesday, Jan. 2, 2024.

Michael Nagle | Bloomberg | Getty Images

Silicon Valley is known for producing tech businesses that start in garages and turn into massive publicly traded companies ubiquitously known across the globe. From Oracle and Microsoft to Google and Facebook, the public markets are responsible for turning ambitious tech founders into billionaires.

But the appeal of the IPO is waning, according to a survey published this week from startup accelerator Techstars. Of the 1,550 entrepreneurs surveyed by Techstars, only 15% said their long-term goal is an IPO. That’s down from 16% a year earlier.

Following an extended bull market in high-growth software and internet stocks, the tech IPO market collapsed in 2022 due to soaring inflation and rising interest rates, which pushed investors out of risk, slashed valuations and led many later-stage companies to delay their plans to go public. 

The prior year was a record period for new offerings, with companies including Roblox, Robinhood, Rivian and UiPath hitting the market. There have been scant few notable tech IPOs in the past two and a half years.

“In combination with the lack of confidence that IPOs will bounce back in short order, this year’s data further underlines the trend that startups are staying private for longer, and IPOs are out of favor with the vast majority of early-stage entrepreneurs,” Techstars said in its report.

For 34% of entrepreneurs surveyed, the preference is to get acquired by a publicly traded company, down from 36% last year, while 30% indicated their goal is to remain private or independent, up from 28% in the prior report.

The trading floor of the New York Stock Exchange (NYSE) prepares for the social media platform Reddit’s initial public offering (IPO) on March 21, 2024 in New York City. 

Spencer Platt | Getty Images

Investment banks have been gearing up for a rebound.

Colin Stewart, the Global Head of Technology Equity Capital Markets at Morgan Stanley, told CNBC in April that “the IPO market’s back,” predicting that 10 to 15 tech companies might go public by the end of the year. Stewart cited high priced and well traded IPOs as “bod[ing] well for the future.” 

Stewart’s comments came after Reddit went public in March, becoming the first major social media company to hold an IPO since Pinterest in 2019. Astera Labs, which sells data center connectivity chips to cloud and artificial intelligence infrastructure companies, went public the same week, followed by data-management company Rubrik in April.

Prior to that, there was a brief jump in activity in September, when chip designer Arm, grocery delivery company Instacart and cloud software vendor Klaviyo debuted.

However, in comparison to the pre-2022 stretch, it’s been mostly quiet for new tech companies on Wall Street. Uncertainty surrounding the presidential election in November is pointing to a dearth of deals for the remainder of the year.

“We have the upcoming election, which is not helping the market in H2,” Athena Theodorou, head of software banking in the Europe region at UBS, told CNBC’s “Squawk Box” on Wednesday. “We do expect the market to remain muted in H2,” Theodorou said, though she said that in Europe the IPO market has started to show signs of life.

WATCH: IPO market is coming back in Europe

IPO market is coming back in Europe — but not in tech, UBS says

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Amazon beefs up AI development, hiring execs from startup Adept and licensing its technology

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Amazon beefs up AI development, hiring execs from startup Adept and licensing its technology

The front desk of the Amazon office is pictured in New York, May 1, 2019.

Carlo Allegri | Reuters

Amazon is ramping up its development of artificial intelligence technology, hiring top talent from AI agent startup Adept and licensing the company’s technology.

Rohit Prasad, a senior vice president and head scientist who oversees Amazon’s artificial general intelligence unit, wrote in a memo to employees on Friday that the company hired Adept co-founder and CEO David Luan and “a few other deeply talented team members to our AGI team.”

Luan will oversee Amazon’s “AGI Autonomy” division, and report to Prasad, he wrote in the memo, which CNBC obtained. Amazon confirmed the contents of the memo. Geekwire was first to report on it.

Amazon faces fierce competition in AI, as rivals Microsoft and Google rapidly add new features into their core products while also giving businesses more ways to access large language models in their public cloud offerings. Amazon’s cloud unit has launched a range of AI services, including its own models, which are generally viewed as lagging behind the top competitors.

Amazon has also pumped billions of dollars into OpenAI competitor Anthropic, and it’s planning to overhaul its Alexa voice assistant with a new paid version that has generative AI capabilities. Prasad, who previously served as a head scientist for Alexa, was tapped in August to steer Amazon’s development of AGI, or software that’s significantly more advanced than current AI and starts to approach human-level capabilities.

Last month, Amazon announced Adam Selipsky, the head of Amazon Web Services, would be stepping down and succeeded by Matt Garman, the head of sales at marketing at AWS.

Microsoft AI CEO Mustafa Suleyman on what's ahead for AI & humanity

Talent wars are heating up across the industry.

Microsoft in March hired Mustafa Suleyman, a cofounder of Google’s DeepMind who went on to lead startup Inflection AI. Microsoft also brought on several of Inflection’s top executives and is licensing some of its technology. The arrangement caught the attention of the Federal Trade Commission, which is probing whether Microsoft structured the deal to avoid antitrust review, The Wall Street Journal reported.

Adept was founded in 2022 by a group of former OpenAI and Google engineers. The company quickly attracted the backing of Microsoft and Nvidia and was valued at more than $1 billion in early 2023.

Adept is a player in the burgeoning space of AI agents, which refers to AI tools that are equipped to complete complex tasks without human assistance. The startup was reportedly developing an agent that can perform actions on a computer on the user’s behalf, like navigating webpages and logging data.

As part of Friday’s agreement, Amazon will license Adept’s technology, multimodal models and some datasets, which “will accelerate our roadmap for building digital agents that can automate software workflows,” Prasad wrote. Amazon is using the technology under a non-exclusive license, the company said.

“David and his team’s expertise in training state-of-the-art multimodal foundational models and building real-world digital agents aligns with our vision to delight consumer and enterprise customers with practical AI solutions,” Prasad said.

Adept confirmed the move in a blog post. The company noted that developing its own AI models would’ve required more capital, and said the Amazon deal will allow it to focus on building agents. Adept will continue to operate as a standalone company after Luan and other execs join Amazon.

WATCH: Amazon Web Services CEO Adam Selipsky to step down

Amazon Web Services CEO Adam Selipsky to step down on June 3

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SoftBank shares rise on $1.86 billion debt offering as CEO talks up ‘super’ AI

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SoftBank shares rise on .86 billion debt offering as CEO talks up 'super' AI

Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., speaks during the company’s annual general meeting in Tokyo, Japan, on Friday, June 20, 2024. Son sketched out ambitions to help create AI thousands of times smarter than any human, making his most grandiose pronouncements since the Japanese conglomerate began taking steps to shore up its finances following a series of ill-timed startup bets. 

Kosuke Okahara | Bloomberg | Getty Images

SoftBank on Friday announced plans to issue euro and dollar-denominated bonds as it looks to pay down debt and focus its investments on artificial intelligence.

The huge Japanese holding company said it will issue around $900 million in U.S. dollar-denominated bonds in two tranches, and 900 million euros ($962.8 million) worth of bonds, also in two tranches. These will have interest rates ranging from 5.4% to 7% per annum.

SoftBank said the money raised will be used for “repayment of indebtedness and for general corporate purposes.”

Its shares closed up 2.5% after news of the bond issuance.

The raising of money via debt comes as SoftBank’s overall financial losses have begun to narrow as it logs some successes, including the initial public offering of chip designer Arm.

Meanwhile, the company, which runs a massive technology investment arm called the Vision Fund, has also suggested it is looking to ramp up investments in artificial intelligence companies.

In a rare public appearance this month, Masayoshi Son, founder and CEO of SoftBank, talked of a concept he called artificial super intelligence, or ASI. He said this refers to AI that is 10,000 times smarter than humans, which he expects to exist within 10 years.

SoftBank is likely looking to capitalize on improving investor sentiment toward the company, highlighted by a 65% year-to-date rise in its shares.

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