OpenAI’s valuation surges to $157B after latest investment round
ChatGPT-maker OpenAI’s valuation soared to $157 billion on Wednesday, Oct. 2, after a fresh round of funding. This makes it the second most valuable private company in the world behind TikTok-parent company Bytedance and just ahead of SpaceX.
OpenAI just secured $6.6 billion in funding from investors. Some of the names involved include venture capital investors such as Thrive Capital and Khosla Ventures. It also received bigtime corporate support from Microsoft and a new investment from Nvidia, whose chips are crucial to the processing power needed for artificial intelligence.
Abu Dhabi’s global investment fund MGX along with investment firms Altimeter Capital, Fidelity and Softbank also took part in the latest round.
Since ChatGPT became available to the public, OpenAI has boasted 250 million weekly active users. And its valuation has skyrocketed from $14 billion in 2021 to $157 billion in 2024.
Reuters reported in September that the $157 billion valuation “hinges” on changing OpenAI’s corporate structure. This means the nonprofit would no longer be in control, instead the company would be run with a for-profit mindset, and Altman would get a stake in the company that could be worth $10.5 billion.
Apple was reportedly in talks to make an investment in the tech company, according to Reuters. However, it didn’t happen during this round.
OpenAI shakeup: Top execs leave as Sam Altman hamstrings nonprofit arm
A lot is going on behind closed doors at OpenAI. Longtime Chief Technology Officer Mira Murati announced she is leaving the company, with two other veteran executives following her out the door. Within hours, it came out that CEO Sam Altman is working to restructure the company into a for-profit endeavor, eliminating the nonprofit arm’s control over the for-profit business.
Is the timing coincidental? Here’s what each of the exiting executives had to say:
“I’m stepping away because I want to create the time and space to do my own exploration,” Murati said.
“It is time for me to take a break. There is no better capstone to my work here than shipping o1 to the world,” Chief Research Officer Bob McGrew said.
“Right now feels like a natural point for me to explore new opportunities outside of OpenAI,” Vice President of Research Barret Zoph said.
Long before talks of restructuring to become a for-profit company with a nonprofit arm – instead of the other way around – ChatGPT-creator OpenAI has been accused of abandoning its nonprofit mission. Co-founder Elon Musk sued the company and Altman over it earlier this year.
Murati was asked about the accusations during a Wall Street Journal interview in March.
“Our mission is to develop artificial general intelligence and deploy it in a way that benefits humanity, and I think, up until now, and certainly our plan moving forward, is to deploy the technology in ways that benefit people and are accessible and very concretely with ChatGPT,” Murati said. “We have done that by having a free tier. That’s certainly our plan moving forward, to have ways. We make this technology easily accessible, freely available to anyone in the world, and we’ll figure out new ways to do that and bring the public along as well.”
OpenAI is certainly entering a new era. Since its founding in 2015, the AI innovator has been a nonprofit. In 2019, OpenAI added a “capped profit” arm that was still controlled by the nonprofit’s board of directors.
In November of last year, the nonprofit board fired Altman, without saying much about why beyond that they lost faith and trust in him. Within days, Microsoft had scooped up Altman and any OpenAI employees who wanted to come with. Hundreds of employees threatened to quit if the board didn’t resign. The board did resign, and Altman came back home and installed a new board of directors.
The conflict at OpenAI has long been about this tug-of-war between its core mission and commercial interests.
“We will need huge amounts of capital to complete our mission, and we have been extremely upfront about that,” Altman said weeks before his firing. “But we will need a lot more money. We don’t know exactly how much. We don’t know exactly how it’s going to be structured; what we’re gonna do. But it shouldn’t come as a surprise because we have said this all the way through. It’s just a tremendously expensive endeavor.”
Today, OpenAI is on a new fundraising round that New York Times sources say could value the company at $150 billion. It would make it the second most valuable private company behind TikTok owner ByteDance.
But Reuters sources say that valuation hinges on changing OpenAI’s corporate structure. This means the nonprofit would no longer be in control, the company would be run with a for-profit mindset, and Altman would get a stake in the company that could be worth $10.5 billion.
Investors would welcome the news of OpenAI running more like a tech startup, but for those troubled about AI safety, there are concerns about whether OpenAI can responsibly govern itself in a world that is still largely unregulated.
OpenAI-backed nuclear startup receives DOE approval on new project
Nuclear power startup Oklo has made new progress toward its goal of reshaping the energy industry by advancing small modular reactor technology. The company finalized an agreement during the week of Sept. 22 with the U.S. Department of Energy (DOE), allowing it to move forward with plans for its first commercial microreactor, expected to be located in Idaho.
“As the only advanced fission company with a DOE site use permit, along with substantial regulatory progress and a secured fuel supply, Oklo is uniquely positioned to deploy the first commercial advanced fission power plant in the U.S.,” the company said in a statement.
Microreactors, like the one Oklo plans to develop, are seen as a more efficient alternative to traditional nuclear power plants. They are designed to be smaller, making them quicker and cheaper to both build and operate, while providing constant energy, unlike other renewables.
Oklo’s chairman, Sam Altman — CEO of OpenAI, a major player in artificial intelligence — reflects a growing trend of tech companies supporting nuclear power.
With increasing electricity demands on the horizon, particularly from data centers and AI operations, tech giants such as Microsoft and Amazon are exploring nuclear energy as a dependable source to meet their needs.
Oklo must still obtain a permit from the Nuclear Regulatory Commission before construction on its project can begin. However, with the DOE agreement in place, the company is now able to start crucial groundwork, including geotechnical assessments, environmental surveys, and infrastructure planning at the proposed Idaho site. Oklo aims to break ground in 2026, with plans to have the microreactor operational by 2027.
OpenAI to grant authors access to training data in landmark copyright case
OpenAI will allow authors suing the company to inspect data used to train its artificial intelligence models in an ongoing copyright lawsuit. This marks the first time the AI firm has agreed to provide access to this information, potentially setting the stage for a pivotal legal battle over the use of copyrighted works in AI development.
The lawsuit, brought by authors including Sarah Silverman, Paul Tremblay and Ta-Nehisi Coates, alleges that OpenAI used their copyrighted works without permission to train its AI system, ChatGPT.
The authors claim their books were taken from online sources and used to generate summaries of their work.
Invision
As part of an agreement, OpenAI will allow the authors’ representatives to inspect the data at the company’s San Francisco office.
The review will take place under strict security measures, including a no-internet policy and the prohibition of recording devices. Reviewers must sign non-disclosure agreements and will have limited use of a computer for note-taking, under the supervision of OpenAI.
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The lawsuit is one of several high-profile cases against AI companies accused of using copyrighted material to train machine learning models.
OpenAI has previously stated that its systems are trained using publicly available datasets, which may include copyrighted works. The company may argue that this practice falls under fair use, a legal doctrine that allows limited use of copyrighted material under certain conditions.
A U.S. court previously dismissed some of the authors’ claims, including allegations of unfair business practices and negligence. However, their claim of direct copyright infringement remains active.
The outcome of the case could set important legal precedents for the future of AI and the use of copyrighted material in training data.
OpenAI proposes unprecedented data center plan to White House
OpenAI is urging the Biden administration to support its proposal for a vast expansion of data centers across the United States, requiring the same amount of energy as a major city. The company argues it is a necessary move to maintain U.S. leadership in the artificial intelligence arms race.
OpenAI CEO Sam Altman, along with other tech leaders, recently met with White House officials to present the plan. The proposal outlines data centers that would need 5 gigawatts of power, equivalent to the output of five nuclear reactors. In addition to technological advancements, the company highlights the potential for creating tens of thousands of new jobs and delivering a significant boost to the U.S. economy.
However, there are potential hurdles. Power infrastructure projects in the U.S. are already facing significant delays, with long wait times, supply chain disruptions and labor shortages. OpenAI is requesting federal support to help overcome these challenges and meet the energy demands required by the new centers.
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Microsoft, OpenAI’s primary backer, recently signed a deal to restart the Three Mile Island nuclear plant to power its operations for the next 30 years. The U.S. currently has 96 gigawatts of nuclear power installed, but meeting OpenAI’s energy needs will require a combination of new wind and solar farms, battery storage and connections to the national grid.
Experts express concerns about the feasibility of the plan, questioning whether the scale and speed of such a project are realistic. Still, OpenAI insists that the new data centers are vital for maintaining a national competitive edge in AI development.
New ChatGPT model designed to break down problems, ‘think’ before responding
Oprah Winfrey recently aired a special all about AI, titled “AI and the Future of Us.” After noting that “AI is still beyond our control,” Winfrey said humans will be able to adapt, saying, “The stakes could not be higher.”
The comments came with guests including OpenAI CEO Sam Altman, tech influencer Marques Brownlee and current FBI Director Christopher Wray. Winfrey noted that she was ready for what AI could do for humanity, as the new o1 model is released for ChatGPT.
Nicknamed “Strawberry,” the new model is designed to think before responding. With hype around the new model, there is already debate on whether it lives up to those abilities.
Living up to the hype may be important for Altman, as this model is four times more expensive than the previous model GPT-4o. OpenAI admits that the older version may still be a better option for most everyday tasks.
What sets the new model apart is the ability to break down big problems into smaller steps and “think” through each one. This new feature can be powerful for tackling complex questions, but it’s not always the right fit for simpler tasks.
One user tested ChatGPT o1 by asking for help planning a Thanksgiving dinner for 11 people. The model paused to think, then gave a detailed 750 word response. It even suggested renting a portable oven, showing that it can give advice for a complex scenario.
However, when given a simple question, it delivered an 800 word essay. Given the same question, GPT-4o answered in just a few sentences.
That is where cost comes into play. The new ChatGPT model charges for what are called “reasoning tokens,” the extra steps it takes when thinking through a problem, which can quickly add up. This makes it less practical for quick, straightforward questions.
Experts are intrigued by the model’s potential for solving complex issues through step-by-step reasoning, but even Altman is managing expectations. The new o1 model is now available, and Altman said they are planning to bring a miniature version to all ChatGPT users for free.
OpenAI said it plans to continue to develop new models in the GPT series.
OpenAI partners with Conde Nast to enhance ChatGPT, SearchGPT
OpenAI has announced its latest agreement with a media outlet — a multi-year partnership with Conde Nast. In a blog post Tuesday, Aug. 20, OpenAI said the partnership will enable the company to display content within its products using information from Conde Nast’s brands including Vogue, The New Yorker, Conde Nast Traveler, GQ, Architectural Digest, Vanity Fair, Wired and Bon Appetit.
OpenAI has previously announced partnerships with Time magazine, Vox Media, People magazine owner DotDash Meredith, The Associated Press and Reddit. A deal with NewsCorp allowed OpenAI access to current stories and archives from The Wall Street Journal, the New York Post and other NewsCorp publications.
OpenAI said these agreements will enhance its chatbot ChatGPT and its AI-powered search engine SearchGPT launched in July to compete with Google for web traffic.
OpenAI is not alone in striking agreements with media groups. Another player in the AI industry, Perplexity AI, has partnered with Time, Fortune, the Texas Tribune and others to grow its revenue-sharing publishers’ program.
But not every outlet is all in on AI. The New York Times, Chicago Tribune and the New York Daily News have all sued OpenAI and its lead investor Microsoft over copyright issues. In response, OpenAI and Microsoft have said using the copyrighted works to train AI programs falls under “fair use.”
Here’s what happened when Americans received $1,000 a month in 3-year study
Years ago, OpenAI CEO Sam Altman set out to discover what would happen if people were given cash every month with no strings attached. This week, the results are in from the largest universal basic income study in the U.S., though how it went depends on how one interprets the findings.
Right-leaning Reason writes, “Bad News for Universal Basic Income: Researchers found that giving people $1,000 every month for three years resulted in decreased productivity and earnings, and more leisure time.”
Keeping in tune with Straight Arrow News‘ mission of unbiased, straight facts, let’s take a look at the facts from the research paper itself.
The ground rules
Researchers randomly selected 1,000 low-income people to receive $1,000 per month with no conditions for three years. A separate control group of 2,000 people received $50 per month to participate in the research.
The people in this study had an average household income of $29,900 in 2019, so $1,000 a month translated to a 40% increase in household income.
In 2016, Sam Altman wrote about launching the Basic Income Project and his desire to answer some theoretical questions about it.
“Do people sit around and play video games, or do they create new things?” Altman asked. “Are people happy and fulfilled? Do people, without the fear of not being able to eat, accomplish far more and benefit society far more? And do recipients, on the whole, create more economic value than they receive?”
The results
Excluding the free money received, individual income fell by about $1,500 per year, or 5%. It led to a 2 percentage point decrease in labor market participation and people worked roughly 1.3-1.4 fewer hours per week.
So what did they do with that extra time? Researchers saw the largest increase in leisure time, followed by smaller increases in transportation – people are driving around doing more – and time spent on finances.
Researchers found no impact on the quality of employment. They did see hints that people were thinking about entrepreneurial endeavors and there were some signs younger participants were investing more in education.
There are more results in the paper.
Overall, the negative effects on labor supply do not appear to be offset by other productive activities, and we do not observe people getting better jobs over the 3-year duration of the program. 33/https://t.co/KqT7Z9pw3Upic.twitter.com/neOXj135eF
Researcher Eva Vivalt wrote, “Overall, the negative effects on labor supply do not appear to be offset by other productive activities, and we do not observe people getting better jobs over the 3-year duration of the program.”
The study concluded, “While decreased labor market participation is generally characterized negatively, policymakers should take into account the fact that recipients have demonstrated–by their own choices–that time away from work is something they prize highly.”
Universal basic income is a hot topic in Silicon Valley. That’s because the tech world is actively developing AI that could make some jobs obsolete.
“There will be fewer and fewer jobs that a robot cannot do better,” Elon Musk said in 2017. “What to do about mass unemployment? This is gonna be a massive social challenge. And I think, ultimately, we will have to have some kind of universal basic income. I don’t think we’re gonna have a choice.”
“These are not things I wish would happen,” Musk continued. “These are simply things that probably will happen.”
Altman, who was behind this study, said that while UBI is not a full solution, it’s a component that should be pursued in the face of AI advancement.
“As a cushion through a dramatic [employment] transition,” he said of UBI. “And the world should eliminate poverty if able to do so. I think it’s a great thing to do as a small part of the bucket of solutions.”
The idea of paying people with no conditions is incredibly expensive – the Tax Foundation said Andrew Yang’s $1,000-per-month proposal would cost $2.8 trillion per year. And many believe it’s an affront to capitalism.
“This is straight out of the Karl Marx playbook. This is not out of the Adam Smith playbook,” radio host Dave Ramsey said during his show last year. “Karl Marx, Father of Communism. Adam Smith wrote the Tome that we were all required to read on capitalism if we took economics. My friend Art Laffer, one of the leading economists in the world, says, ‘If you pay people not to work, please expect them to not work.’”
Again, the people from this study did still work – try living off $12,000 a year – but they did take off a little more than an hour per week.
Toys‘R’Us uses OpenAI’s text-to-video model Sora to create short film
Toys”R”Us is known for the slogan “I don’t want to grow up,” but now the toy brand is growing with the times. It used AI to make its latest promotional video.
Kim Miller, CMO of Toys“R”Us Creative Studios, told CNN that the concept originated after she attended a brand storytelling group. She shared with the host her desire to do something “fun” and “different” for their next project, which focused on the founder’s origin story.
Toys”R”Us released the video at an advertising event in France, saying it is the first ever brand film created by the technology. While Sora is not yet publicly available, the toy chain partnered with creative agency Native Foreign, an early tester of the AI model.
Supreme Court to deliver rulings on presidential power, abortion, social media
The Supreme Court is set to issue rulings on several high-profile cases. And the closed-door trial for a Wall Street Journal reporter begins in Russia. These stories and more highlight The Morning Rundown for Wednesday, June 26, 2024.
SCOTUS to deliver rulings on presidential power, abortion, social media
It’s decision time at the Supreme Court. Over the next three days, the high court is set to deliver rulings on 14 argued cases — including high-profile ones on subjects like presidential power, abortion care and social media.
As President Joe Biden and former President Donald Trump prepare for the first presidential debate on Thursday, June 27, the court is poised to deliver a ruling on Trump’s claims of “absolute immunity” from criminal prosecution. With Trump facing federal charges accusing of him of attempts to overturn the 2020 election, the court will decide if a former president can be prosecuted for “official acts” taken while in the White House.
During oral arguments in April, the justices seemed open to the idea of some immunity for presidents when conducting official acts, while questioning what exactly falls under that category.
The Supreme Court will also tackle the legality of a felony obstruction charge used by the Justice Department against 300 people who stormed the capitol on Jan. 6, 2021. A former Pennsylvania police officer has challenged that charge — stemming from a law to prevent the destruction of evidence during financial crimes — which originated during the Enron accounting scandal.
The obstruction charge is one of four former President Trump faces in his federal election subversion case.
Then, for the first time since Roe v. Wade was overturned, the court will issue a ruling on state-level abortion restrictions. The question before the justices is whether doctors can perform abortions in medical emergencies despite a state’s strict near-total abortion ban.
The topic of social media is also on the docket. First, the Supreme Court will determine whether state laws restricting how social media platforms moderate content violate the First Amendment. In another case, the justices will decide whether the Biden administration violated the Constitution in its communication with social media companies to remove misinformation on COVID-19 and the 2020 election.
While the Supreme Court justices usually look to complete their work by the end of June, there is a possibility the opinions may continue to early July.
Wall Street Journal reporter’s espionage trial starts in Russia
The espionage trial of Wall Street Journal reporter Evan Gershkovich is now underway in Russia behind closed doors. Gershkovich appeared in a courtroom the morning of Wednesday, June 26, inside a glass cage before the proceedings began.
Falsely accused WSJ reporter Evan Gershkovich appeared in a Russian court as proceedings started in a secret trial that will offer him few legal protectionshttps://t.co/CnygQ1pxLJhttps://t.co/CnygQ1pxLJ
He is the first western journalist to be arrested on espionage in post-Soviet Russia.
Gershkovich was arrested while reporting for the Wall Street Journal in March 2023, just weeks before Russia launched its full-scale invasion of Ukraine, accused of spying for the CIA.
The U.S. government, Wall Street Journal and Gershkovich himself all deny the allegations. The State Department has declared him “wrongfully detained.”
His trial is expected to last months. If convicted, Gershkovich faces up to 20 years in prison.
WikiLeaks founder Julian Assange free after guilty plea
WikiLeaks founder Julian Assange returned to his home country of Australia on Wednesday, June 26, a free man. He was released from U.S. custody after pleading guilty to violating espionage law.
— Free Assange – #FreeAssange (@FreeAssangeNews) June 26, 2024
As part of the deal with the Justice Department, Assange will get no more prison time since he already spent the last five years in a London prison fighting extradition to the U.S.
He had originally been facing 18 criminal charges relating to WikiLeaks’ release of sensitive information into the public domain, but only had to plead guilty to one charge as part of the agreement.
Judge partially lifts Trump gag order from New York criminal trial
The judge in former President Donald Trump’s New York criminal case has partially lifted a gag order put in place during the trial.
For the entire trial, Trump was barred from talking about potential witnesses, jurors, or court staff and their families. Now, the former president is allowed to comment publicly about witnesses and jurors.
The judge also left a separate order in place prohibiting Trump and his lawyers from disclosing the identities of jurors or their addresses.
In May, Trump became the first president to be convicted of a felony when the jury found him guilty of 34 felony counts of falsified business records. He’s set to be sentenced July 11.
House committee to vote on holding Biden’s ghostwriter in contempt
The House Judiciary Committee plans to vote on a measure to hold President Biden’s ghostwriter, Mark Zwonitzer, in contempt of Congress. The vote stems from Zwonitzer refusing to hand over documents and other materials tied to his work on the president’s memoirs.
The vote is set for Thursday morning, just hours before Biden and Trump’s debate.
The resolution to hold Zwonitzer in contempt is expected to advance on party lines.
The White House on Tuesday called the vote an attempt “to harass and intimidate a private citizen.”
Results for New York, Colorado, Utah primary elections
Results are in for several states that held primary elections on Tuesday, June 25. In the most expensive congressional primary in history, incumbent Democratic Congressman Jamaal Bowman lost to George Latimer in New York’s 16th district.
While this race garnered a lot of headlines, tomorrow we turn a new page. We must come together, united to defend our Democratic values from MAGA extremism.
Bowman became the first member of the progressive group in the House known as “the squad” to lose in the primaries this year. During the race, a pro-Israeli lobbying group spent nearly $15 million in efforts to stop Bowman, who had been critical of Israel’s operations in Gaza.
In Colorado, after switching districts, Republican Congresswoman Lauren Boebert won the House primary in the state’s 4th district. Boebert has previously received the endorsement of former President Donald Trump.
And in Utah, Rep. John Curtis, R-Utah, won the GOP primary to fill Mitt Romney’s open Senate seat. Curtis is favored to win in November since Utah has not elected a Democrat to the Senate since 1970.
Toys ‘R’ Us uses OpenAI’s Sora to create brand film
Toys”R”Us is known for the slogan “I don’t want to grow up,” but now the toy brand is growing with the times. It used AI to make its latest promotional video.
The retail toy company used OpenAI’s text to video tool called Sora to create the video.
Toys”R”Us released the video at an advertising event in France, saying it is the first ever brand film created by the technology. While Sora is not yet publicly available, the toy chain partnered with an agency that is an early tester of the AI model.
