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OpenAI is disbanding its “AGI Readiness” team, which advised the company on OpenAI’s own capacity to handle increasingly powerful AI and the world’s readiness to manage that technology, according to the head of the team.

On Wednesday, Miles Brundage, senior advisor for AGI Readiness, announced his departure from the company via a Substack post. He wrote that his primary reasons were that the opportunity cost had become too high and he thought his research would be more impactful externally, that he wanted to be less biased and that he had accomplished what he set out to at OpenAI.

Brundage also wrote that, as far as how OpenAI and the world is doing on AGI readiness, “Neither OpenAI nor any other frontier lab is ready, and the world is also not ready.” Brundage plans to start his own nonprofit, or join an existing one, to focus on AI policy research and advocacy. He added that “AI is unlikely to be as safe and beneficial as possible without a concerted effort to make it so.”

Former AGI Readiness team members will be reassigned to other teams, according to the post.

“We fully support Miles’ decision to pursue his policy research outside industry and are deeply grateful for his contributions,” an OpenAI spokesperson told CNBC. “His plan to go all-in on independent research on AI policy gives him the opportunity to have an impact on a wider scale, and we are excited to learn from his work and follow its impact. We’re confident that in his new role, Miles will continue to raise the bar for the quality of policymaking in industry and government.”

In May, OpenAI decided to disband its Superalignment team, which focused on the long-term risks of AI, just one year after it announced the group, a person familiar with the situation confirmed to CNBC at the time.

News of the AGI Readiness team’s disbandment follows the OpenAI board’s potential plans to restructure the firm to a for-profit business, and after three executives — CTO Mira Murati, research chief Bob McGrew and research VP Barret Zoph — announced their departure on the same day last month.

Earlier in October, OpenAI closed its buzzy funding round at a valuation of $157 billion, including the $6.6 billion the company raised from an extensive roster of investment firms and big tech companies. It also received a $4 billion revolving line of credit, bringing its total liquidity to more than $10 billion. The company expects about $5 billion in losses on $3.7 billion in revenue this year, CNBC confirmed with a source familiar last month.

And in September, OpenAI announced that its Safety and Security Committee, which the company introduced in May as it dealt with controversy over security processes, would become an independent board oversight committee. It recently wrapped up its 90-day review evaluating OpenAI’s processes and safeguards and then made recommendations to the board, with the findings also released in a public blog post.

News of the executive departures and board changes also follows a summer of mounting safety concerns and controversies surrounding OpenAI, which along with Google, Microsoft, Meta and other companies is 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.

In July, OpenAI reassigned Aleksander Madry, one of OpenAI’s top safety executives, to a job focused on AI reasoning instead, sources familiar with the situation confirmed to CNBC at the time.

Madry was OpenAI’s head of preparedness, a team that was “tasked with tracking, evaluating, forecasting, and helping protect against catastrophic risks related to frontier AI models,” according to a bio for Madry on a Princeton University AI initiative website. Madry will still work on core AI safety work in his new role, OpenAI told CNBC at the time.

The decision to reassign Madry came around the same time that Democratic senators sent a letter to OpenAI CEO Sam Altman concerning “questions about how OpenAI is addressing emerging safety concerns.”

The letter, which was viewed by CNBC, also stated, “We seek additional information from OpenAI about the steps that the company is taking to meet its public commitments on safety, how the company is internally evaluating its progress on those commitments, and on the company’s identification and mitigation of cybersecurity threats.”

Microsoft gave up its observer seat on OpenAI’s board in July, stating in a letter viewed by CNBC that it can now step aside because it’s satisfied with the construction of the startup’s board, which had been revamped since the uprising that led to the brief ouster of Altman and threatened Microsoft’s massive investment in the company.

But in June, a group of current and former OpenAI employees published an open letter 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 at the time.

Days after the letter was published, a source familiar to the mater confirmed to CNBC that the Federal Trade Commission and the Department of Justice were set to open antitrust investigations into OpenAI, Microsoft and Nvidia, focusing on the companies’ conduct.

FTC Chair Lina Khan has described her agency’s action as a “market inquiry into the investments and partnerships being formed between AI developers and major cloud service providers.”

The current and former employees wrote in the June letter that 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 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.”

OpenAI’s Superalignment team, announced last year and disbanded in May, had focused on “scientific and technical breakthroughs to steer and control AI systems much smarter than us.” At the time, OpenAI said it would commit 20% of its computing power to the initiative over four years.

The team was disbanded after its leaders, OpenAI co-founder Ilya Sutskever and Jan Leike, announced their departures from the startup in May. Leike wrote in a post on X that OpenAI’s “safety culture and processes have taken a backseat to shiny products.”

Altman said at the time on X he was sad to see Leike leave and that OpenAI had more work to do. Soon afterward, co-founder Greg Brockman posted a statement attributed to Brockman and the CEO on X, asserting 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 at the time. “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 that 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 at the time. “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 on X. “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.”

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Jeff Bezos, Sam Altman, Sundar Pichai and other tech leaders congratulate Trump on election win

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November 6, 2024

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Jeff Bezos, Sam Altman, Sundar Pichai and other tech leaders congratulate Trump on election win

Sam Altman, CEO of OpenAI, attends the 54th annual meeting of the World Economic Forum, in Davos, Switzerland, January 18, 2024 (L), and Amazon CEO Jeff Bezos speaks during the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain, November 2, 2021.

Reuters

Leaders of major technology companies congratulated President-elect Donald Trump and Vice President-elect JD Vance on their victory in the U.S. presidential election Wednesday.

The messages were similar, with CEOs remarking that they wish Trump success when he returns to the Oval Office, and look forward to working with his administration.

Amazon founder and executive chairman Jeff Bezos celebrated Trump’s win in a post on X, calling it an “extraordinary political comeback and decisive victory.”

Bezos, who also owns The Washington Post and founded space company Blue Origin, has had a rocky relationship with Trump and was a frequent target of the former president during his first term. Trump repeatedly took aim at Bezos’ ownership of the Post, Amazon’s tax record and its relationship with the Postal Service. Bezos also took swings at Trump, remarking in a 2015 social media post, “#sendDonaldtospace.” Bezos recently struck a more conciliatory tone and in July praised Trump for his “courage under literal fire” following the attempted assassination of Trump at a Pennsylvania rally that month. Bezos has posted twice on X this year, with both posts mentioning Trump.

Andy Jassy, who took the helm from Bezos when he stepped down as Amazon’s CEO in 2021, also extended his congratulations to Trump.

“Congratulations to President-elect @realDonaldTrump on a hard-fought victory,” Jassy wrote in a post on X. “We look forward to working with you and your administration on issues important to our customers, employees, communities, and country.”

OpenAI CEO Sam Altman said in a post on X that he hopes Trump will see “huge success in the job.” In a follow up post, he wrote, “it is critically important that the US maintains its lead in developing AI with democratic values.”

Meta CEO Mark Zuckerberg called Trump’s election win a “decisive victory” and said he looked forward to forward to working with the Trump administration. “We have great opportunities ahead of us as a country,” Zuckerberg wrote in a post on Threads, Meta’s rival to Elon Musk’s X app. The two men have also had a rocky relationship at times. In 2021, Facebook banned Trump for two years shortly after the Jan. 6 insurrection.

Musk, who also runs electric vehicle maker Tesla, space exploration company SpaceX, and brain tech startup Neuralink, also unsurprisingly cheered Trump’s win.

Musk has been a key ally for Trump in his campaign for the White House, with the former president promising prior to his election to appoint Musk as the head of a government efficiency commission. Musk also contributed nearly $75 million to America PAC, a pro-Trump super political action committee that he established earlier in the year. Tesla shares rallied more than 13% on Wednesday afternoon as investors were optimistic that a Trump win would benefit the vehicle maker.

Sundar Pichai, CEO of Google parent Alphabet, also congratulated Trump on his victory and said he’s committed to working with the president-elect’s administration.

Microsoft CEO Sundar Pichai said: “Congratulations President Trump, we’re looking forward to engaging with you and your administration to drive innovation forward that creates new growth and opportunity for the United States and the world.”

Cisco founder and CEO Chuck Robbins wrote in a post on X that the company looks forward to working with Trump and Congress on policies around “connectivity, innovation, cybersecurity, and more.”

Box CEO Aaron Levie also sent his good wishes to Trump. He wrote in a post on X, “Wild ride. Congrats to @realDonaldTrump on becoming President again. What’s great about America is that we’re on a rocket ship right now and can keep accelerating with the right policies and execution.”

Michael Dell, CEO and chairman of Dell Technologies, added his own congratulations in a post on X.

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Super Micro shares plummet 22% after financial update heightens investor concerns

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November 6, 2024

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Super Micro shares plummet 22% after financial update heightens investor concerns

Charles Liang, chief executive officer of Super Micro Computer Inc., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024. The trade show runs through June 7. 

Annabelle Chih | Bloomberg | Getty Images

Super Micro shares plunged 22% on Wednesday to their lowest level since May of last year after the embattled server maker issued disappointing unaudited financials and failed to provide specifics plans to keep its Nasdaq listing.

The stock dropped to $21.55 as of early afternoon and is now down 82% from its high in March, a selloff that’s wiped out about $57 billion of market cap.

Super Micro had its worst week on the market on record last week after the resignation of its auditor, Ernst & Young, the second accounting firm to bow out in under two years. The company faces accusations from an activist of accounting irregularities and that it’s shipped sensitive chips to sanctioned nations and companies, violating export controls.

Super Micro hasn’t filed audited financials since May and is at risk of being delisted by Nasdaq if it doesn’t report results for the latest fiscal year to the SEC by mid-November. The company said late Tuesday, in reporting preliminary results for the first fiscal quarter, that it doesn’t know when it will file annual financials.

On a call with analysts, the company said it wouldn’t discuss any questions related to Ernst & Young’s decision to resign and didn’t address corporate governance issues. CEO Charles Liang said Super Micro was actively in the process of hiring a new auditor.

Analysts at Mizuho suspended coverage of the stock on Wednesday “due to a lack of full financial detailed and audited statements.” Wedbush analysts, who have the equivalent of a hold rating on the stock, said the report left “more questions than answers.”

“Management seems fully focused on finding an auditor and resolving its late filing status,” the Wedbush analysts wrote. “However, we don’t know how significant the hurdles might be in achieving this goal.”

Liang said on the call that the company is “working with urgency to become current again with our financial reporting.”

For the quarter ending Sept. 30, Super Micro said it generated net sales of between $5.9 billion and $6 billion. That’s under analyst expectations of $6.45 billion, but is still up 181% on an annual basis. The company’s business has been booming of late because it ships servers packed with Nvidia’s processors for artificial intelligence.

NVIDIA founder, President and CEO Jensen Huang speaks about the future of artificial intelligence and its effect on energy consumption and production at the Bipartisan Policy Center in Washington, D.C., on Sept. 27, 2024.

Chip Somodevilla | Getty Images

Super Micro shares soared 246% last year after jumping 87% in 2023. The stock peaked at $118.81 in March, shortly after being added to the S&P 500.

Liang said demand is strong for the latest Nvidia GPU, called Blackwell, which started shipping in recent weeks.

When asked by an analyst when Blackwell revenue might show up in Super Micro’s financials, Liang said that “we are asking Nvidia every day,” adding that the companies continue to work together closely.

“Our capacity is ready, but not enough new chips,” Liang said.

Analysts asked if the company’s plans for building Blackwell-based servers had changed, which could suggest that other server makers might receive additional capacity or allocations of Nvidia GPUs at Super Micro’s expense.

“To clarify one of the comments from earlier with respect to Nvidia, we have the deepest of relationships with Nvidia,” CFO David Weigand said. “Now we have multiple state-of-the art-projects in progress and we’ve spoken to Nvidia and they’ve confirmed they’ve made no changes to allocations. We maintain a strong relationship with them, and don’t expect that to change.”

Super Micro’s forecast for the December quarter was also below estimates. The company said revenue will be between $5.5 billion and $6.1 billion, trailing the $6.86 billion average analyst estimate, according to LSEG. Adjusted earnings per share will be 56 cents to 65 cents. Analysts were looking for EPS of 83 cents.

Super Micro said its board of directors had commissioned a special committee to look into Ernst & Young’s concerns. In a three-month investigation, the committee found there was “no evidence of fraud or misconduct” from management, the company said.

“The Committee is recommending a series of remedial measures for the Company to strengthen its internal governance and oversight functions, and the Committee expects to deliver the full report on the completed work this week or next,” Super Micro said, adding that it intends to take all steps to keep its listing on Nasdaq.

WATCH: Super Micro shares down on earnings

Super Micro shares down on earnings, says investigation finds 'no evidence of fraud or misconduct'

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Nintendo jumps 6% as it says current Switch games will be playable on the console’s successor

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November 6, 2024

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Nintendo jumps 6% as it says current Switch games will be playable on the console's successor

The Nintendo Switch game console store in Shanghai, Feb 25, 2024. 

Cfoto | Future Publishing | Getty Images

Nintendo on Wednesday said it will allow current Switch games to be played on the hit console’s successor as it looks to drum up excitement among its current user base for the highly-anticipated device.

Shares of Nintendo closed 5.8% higher in Tokyo on Wednesday, after the announcement.

“Investors think this is a sign Nintendo’s next device will not be a risky experiment but rather a continuation,” Serkan Toto, CEO of Tokyo-based games consultancy Kantan Games, told CNBC.

“I believe investors want Nintendo to adopt the iPhone approach of gradually improving a winning product instead of trying to reinvent the wheel with every new console generation.”

Backward compatibility of games is critical for console makers for several reasons: firstly, when new consoles launch, they often do not have a huge amount of games to choose from. Making older games available for the new Switch will boost the device’s appeal on this front.

Secondly, current Switch users who are thinking of purchasing new games ahead of the new console launch may hold off until after its debut. Making current games playable on the Switch’s successor removes that concern.

The Switch is Nintendo’s second-best selling console in history, behind the Nintendo DS.

But demand for the Nintendo Switch, which was first released in 2017, is slowly beginning to fade — albeit from high levels. Investors have been waiting for more details about the console’s successor, which the company said it will announce in its fiscal year ending March 2025.

Nintendo managed to breathe new life into the nearly eight-year-old console last year by releasing games involving top brands like Zelda and Pokemon, as well as expanding into areas like movies.

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