Artificial Intelligence, Real Turmoil (Updated 2X)

Lenin famously said, “There are decades where nothing happens; and weeks where decades happen.” Last week offered a fair approximation of the latter in the world of AI. On Monday, Ed Newton-Rex, the widely respected head of StabilityAI’s audio team, abruptly resigned over a disagreement with the company’s position on the use of copyrighted works to train generative AI models. On Friday, OpenAI even more abruptly sacked its high-profile co-founder and CEO Sam Altman and set a new standard for mangling internal communication and investor relations. And somewhere along the way, Meta reportedly dissolved its Responsible AI team and reassigned its staffers to other units.

The turmoil continued through the weekend. OpenAI president Greg Brockman quit in solidarity with Altman, employees threatened mass resignations and its blindsided investors demanded a restoration and lined up to finance any new AI venture Altman and Brockman might launch. By Saturday evening, talks reportedly were underway between Altman and the company to bring him and his team back into the fold.

On Monday, however, OpenAI’s largest investor Microsoft said Altman and Brockman would join Microsoft to lead a “new advanced AI research team,” whatever that meant.

(Update: As of Tuesday night, OpenAI and Altman had reached an “agreement in principle” for him to return as CEO and the board members that had sacked him were themselves sacked. They will be replaced by former Salesforce CEO Bret Taylor and former Treasury Secretary Larry Summers. Brockman said in a post on X/Twitter that he, too, would be returning to OpenAI but it was unclear whether he will rejoin the board.)

Apart from the StabilityAI case, the conflicts were not directly related to the ongoing controversy around generative AI and copyright. But they could have significant indirect effects on how that controversy unfolds.

For one thing, the sudden moves made a lot of noise. Newton-Rex went very public with his disagreement with the Stable Diffusion-developer, publishing an op-ed in Music Business Worldwide and giving a series of media interviews. The precipitating event that led to his resignation, he confirmed to me in an interview, was Stable Diffusion’s comments to the U.S. Copyright Office in its inquiry into AI and copyright, in which the company baldly declared its view that the use of copyrighted works to train its models is permissible under the fair use doctrine and does not require authorization or remuneration to rights owners. A composer in his own right, Newton-Rex takes strong exception to that view and proudly describes how Stable Diffusion’s music generator that he helped develop was trained on 800,000 fully licensed tracks.

Altman’s sudden defenestration set off near-thermonuclear explosions on Wall Street and Sand Hill, where he has significant ties from his time heading tech startup accelerator Y Combinator. It was also probably noted on Capitol Hill and the Biden Administration where Altman had also nurtured ties through his scrupulously non-confrontational testimony at congressional hearings and private demos for members, and his dutiful appearances at AI-related ceremonial events at the White House.

Whether he intended to or not, Newton-Rex could now well find himself being deposed by plaintiff’s counsel in the pending copyright infringement lawsuit against his former employer and perhaps in other similar cases.

OpenAI’s ChatGPT has been at the center of many of the debates around AI and copyright. While Altman had given lip service to working with rights owners on a system for opting out of AI training and other measures, the company is now likely heading into an uncertain period of internal turmoil, with additional resignations possible and the possibility of major changes in its governance and management structure coming. On Monday, the company named Twitch co-founder Emmett Shear as its new CEO, ending Mira Murati’s 48-hour reign. She will now return to her post as chief technology officer, at least for now. (Update: With Altman’s return, Shear will now step aside, ending his own 48-hour reign. If you’re keeping score at home, that’s three different CEOs and four in total in a span of five days.)

For its part, Meta managed to keep its dismantling of its AI safety team mostly quiet. But as news has trickled out, it will no doubt be noted in Europe, where the European Union is grinding away at enacting major safety-focused AI regulation.

Even with Altman’s restoration, OpenAI’s future is uncertain. As of Wednesday morning, it was unclear whether Microsoft, which owns 49% of OpenAI, will also get a seat on the new board. But it emerges from the fracas with a clear claim to the leadership mantle of the AI industry, along with Google. Amazon, which is the largest investor in OpenAI rival Anthropic, and Meta are also racing to close the gap.

In other words, generative AI is rapidly being subsumed into an explicitly commercial contest among incumbent technology giants and likely to become just another pillar of Big Tech’s digital hegemony. And the debate around AI and copyright is in danger of becoming just another battle between rights owners and technology companies, with the usual players arrayed in their usual formations.

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