Philippa Kaur

There is little doubting the dedication of Sam Altman to Openai, the firm at the forefront of an artificial-intelligence (ai) revolution. As co-founder and boss he appeared to work as tirelessly for its success as at a previous startup where his singlemindedness led to a bout of scurvy, a disease more commonly associated with mariners of a bygone era who remained too long at sea without access to fresh food.  So his sudden sacking on November 17th was a shock. The reasons why the firm’s board lost confidence in Mr Altman are unclear. Rumours point to disquiet about his side-projects, and fears that he was moving too quickly to expand Openai’s commercial offerings without considering the safety implications, in a firm that has also pledged to develop the tech for the “maximal benefit of humanity”.The company’s investors and some of its employees are now seeking Mr Altman’s reinstatement. Whether they succeed or not, it is clear that the events at Openai are the most dramatic manifestation yet of a wider divide in Silicon Valley. On one side are the “doomers”, who believe that, left unchecked, ai poses an existential risk to humanity and hence advocate stricter regulations. Opposing them are “boomers”, who play down fears of an ai apocalypse and stress its potential to turbocharge progress. The camp that proves more influential could either encourage or stymie tighter regulations, which could in turn determine who will profit most from ai in the future.Openai’s corporate structure straddles the divide. Founded as a non-profit in 2015, the firm carved out a for-profit subsidiary three years later to finance its need for expensive computing capacity and brainpower in order to propel the technology forward. Satisfying the competing aims of doomers and boomers was always going to be difficult.The split in part reflects philosophical differences. Many in the doomer camp are influenced by “effective altruism”, a movement that is concerned by the possibility of ai wiping out all of humanity. The worriers include Dario Amodei, who left OpenAI to start up Anthropic, another model-maker. Other big tech firms, including Microsoft and Amazon, are also among those worried about ai safety.Boomers espouse a worldview called “effective accelerationism” which counters that not only should the development of ai be allowed to proceed unhindered, it should be speeded up. Leading the charge is Marc Andreessen, co-founder of Andreessen Horowitz, a venture-capital firm. Other ai boffins appear to sympathise with the cause. Meta’s Yann LeCun and Andrew Ng and a slew of startups including Hugging Face and Mistral ai have argued for less restrictive regulation.Mr Altman seemed to have sympathy with both groups, publicly calling for “guardrails” to make ai safe while simultaneously pushing Openai to develop more powerful models and launching new tools, such as an app store for users to build their own chatbots. Its largest investor, Microsoft, which has pumped over $10bn into Openai for a 49% stake without receiving any board seats in the parent company, is said to be unhappy, having found out about the sacking only minutes before Mr Altman did. If he does not return, it seems likely that Openai will side more firmly with the doomers.Yet there appears to be more going on than abstract philosophy. As it happens, the two groups are also split along more commercial lines. Doomers are early movers in the ai race, have deeper pockets and espouse proprietary models. Boomers, on the other hand, are more likely to be firms that are catching up, are smaller and prefer open-source software.Start with the early winners. Openai’s Chatgpt added 100m users in just two months after its launch, closely trailed by Anthropic, founded by defectors from Openai and now valued at $25bn. Researchers at Google wrote the original paper on large language models, software that is trained on vast quantities of data, and which underpin chatbots including Chatgpt. The firm has been churning out bigger and smarter models, as well as a chatbot called Bard.Microsoft’s lead, meanwhile, is largely built on its big bet on Openai. Amazon plans to invest up to $4bn in Anthropic. But in tech, moving first doesn’t always guarantee success. In a market where both technology and demand are advancing rapidly, new entrants have ample opportunities to disrupt incumbents.This may give added force to the doomers’ push for stricter rules. In testimony to America’s Congress in May Mr Altman expressed fears that the industry could “cause significant harm to the world” and urged policymakers to enact specific regulations for ai. In the same month a group of 350 ai scientists and tech executives, including from Openai, Anthropic and Google signed a one-line statement warning of a “risk of extinction” posed by ai on a par with nuclear war and pandemics. Despite the terrifying prospects, none of the companies that backed the statement paused their own work on building more potent ai models.Politicians are scrambling to show that they take the risks seriously. In July President Joe Biden’s administration nudged seven leading model-makers, including Microsoft, Openai, Meta and Google, to make “voluntary commitments’‘, to have their ai products inspected by experts before releasing them to the public. On November 1st the British government got a similar group to sign another non-binding agreement that allowed regulators to test their ai products for trustworthiness and harmful capabilities, such as endangering national security. Days beforehand Mr Biden issued an executive order with far more bite. It compels any ai company that is building models above a certain size—defined by the computing power needed by the software—to notify the government and share its safety-testing results.image: The EconomistAnother fault line between the two groups is the future of open-source ai. llms have been either proprietary, like the ones from Openai, Anthropic and Google, or open-source. The release in February of llama, a model created by Meta, spurred activity in open-source ai (see chart). Supporters argue that open-source models are safer because they are open to scrutiny.​ Detractors worry that making these powerful ai models public will allow bad actors to use them for malicious purposes.But the row over open source may also reflect commercial motives. Venture capitalists, for instance, are big fans of it, perhaps because they spy a way for the startups they back to catch up to the frontier, or gain free access to models. Incumbents may fear the competitive threat. A memo written by insiders at Google that was leaked in May admits that open-source models are achieving results on some tasks comparable to their proprietary cousins and cost far less to build. The memo concludes that neither Google nor Openai has any defensive “moat” against open-source competitors.So far regulators seem to have been receptive to the doomers’ argument. Mr Biden’s executive order could put the brakes on open-source ai. The order’s broad definition of “dual-use” models, which can have both military or civilian purposes, imposes complex reporting requirements on the makers of such models, which may in time capture open-source models too. The extent to which these rules can be enforced today is unclear. But they could gain teeth over time, say if new laws are passed.Not every big tech firm falls neatly on either side of the divide. The decision by Meta to open-source its ai models has made it an unexpected champion of startups by giving them access to a powerful model on which to build innovative products. Meta is betting that the surge in innovation prompted by open-source tools will eventually help it by generating newer forms of content that keep its users hooked and its advertisers happy. Apple is another outlier. The world’s largest tech firm is notably silent about ai.  At the launch of a new iPhone in September the company paraded numerous ai-driven features without mentioning the term. When prodded, its executives lean towards extolling “machine learning”, another term for ai.That looks smart. The meltdown at Openai shows just how damaging the culture wars over ai can be. But it is these wars that will shape how the technology progresses, how it is regulated—and who comes away with the spoils. ■ More

HOW QUICKLY the mighty fall. Ever since the release of ChatGPT a year ago, Sam Altman has been the human face of the generative artificial-intelligence revolution. As recently as November 16th the co-founder and boss of OpenAI was touting the virtues of AI to executives and world leaders at the Asia-Pacific Economic Co-operation summit in San Francisco. The very next day he was out on his ear. A blog post on OpenAI’s website said the board “no longer has confidence” in Mr Altman’s leadership because “he was not consistently candid in his communications with the board”. Another shock came hours later. Greg Brockman, chairman of the firm’s board and another co-founder, resigned in response to Mr Altman’s sacking.The defenestration was all the more surprising because Mr Altman seemed at the peak of his powers. He had recently completed a world tour where everyone from Narendra Modi to Emmanuel Macron jockeyed to meet him. On November 6th he had launched a suite of new AI tools at OpenAI’s developer day, drawing comparisons with Steve Jobs—a parallel that now seems ironic, considering that in 1985 Jobs too was booted out of the company he had founded. One startup boss says Mr Altman’s and Mr Brockman’s departures are as serious as if Larry Page and Sergey Brin had been kicked out of Google during its early years.OpenAI’s employees and investors were blindsided by the move. Mr Brockman later tweeted that he and Mr Altman had not been aware of what was happening until minutes before the ousting. According to Axios, a news website, Microsoft, which has a 49% stake in the firm, was also in the dark until the last minute. Microsoft’s stock fell by 2% on the news, probably because the firm’s AI ambitions, including a hotly anticipated “copilot” for its Office suite, hinge on access to OpenAI’s technology.The ousting raises three big issues: what led to the surprise sacking; what it means for the firm that has been at the frontier of generative AI; and what it means for the future of the technology itself. How OpenAI’s employees, the tech world and society writ large respond to the situation will be critical to what happens next.The board has yet to offer a detailed explanation for its decision. The leading theory, put forward by Kara Swisher of New York Magazine, says that the rest of the board, assembled by chief scientist Ilya Sutskever, disagreed with Mr Altman on how the firm should balance making money with the safe release of its models. An employee at OpenAI flatly calls the situation a “coup d’état”. In a meeting with employees held shortly after the announcement, though, Mr Sutskever denied this characterisation, saying that the board was just doing its duty.If it is true that Mr Altman’s defenestration resulted from disagreements over AI safety, it would be the most dramatic expression yet of a longstanding debate at the heart of OpenAI’s history and indeed the wider industry. OpenAI was founded as a non-profit in 2015 by Mr Altman, Mr Brockman and Mr Sutskever, a superstar AI researcher, among others. But in 2019, in need of cash to train models that were demanding ever more computer power, Mr Altman spearheaded the creation of a “capped-profit” company inside the non-profit and raised $1bn from Microsoft. In 2021 a handful of senior employees at the firm grew disillusioned with the firm’s more commercial focus and left to form a rival startup called Anthropic. The launch of ChatGPT was only one chapter in Mr Altman’s quest to turn what was once a tiny research lab into a nimble product-oriented company.What does Mr Altman’s ousting mean for OpenAI? The immediate effect is chaos. In addition to Mr Brockman, three other senior engineers have left. Others could follow, especially if the ousting resulted purely from a strategic disagreement. There could also be financial repercussions. Speaking to your correspondent in August, an investor in OpenAI called Mr Altman the “only irreplaceable person” at the startup because of his top-notch recruiting and fundraising abilities. “Sam is the greatest fundraiser of all time…after Elon,” he said. But perhaps OpenAI no longer needs Mr Altman to hire staff and raise money, now that the firm is so well known, and has the backing of Microsoft. That is why the departure of Mr Brockman, widely considered the engineering brains of the startup, is even more stinging.OpenAI is currently in talks to raise funds at a valuation of nearly $90bn, which would make it one of the most valuable private tech companies in the world. A private-markets broker says that before the announcement there had been “nothing but demand” for OpenAI’s shares. That valuation will now be tested, he says.The impact on the wider industry is less clear. Mr Altman pushed OpenAI to “ship” new products into the world which gave it a first-mover advantage. Its competitors were forced to move faster to keep pace. A more safety-focused OpenAI will therefore slow down the whole industry, allowing competitors to catch up. AI startups that were building products with OpenAI’s technology may now think twice before tying themselves too closely to one company. And Mr Altman himself is a wildcard. Writing on X he promised he would “have more to say about what’s next later”. If what’s next is a new company, the drama could just be getting started.■ More

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From Korean horror to Palestinian romance, Netflix covers every genre—almost. Among tens of thousands of hours of video on its servers, the world’s largest streaming platform is missing the category that draws bigger audiences to television than anything else: live sport.That will change at 3pm on November 14th in Las Vegas with the Netflix Cup, a celebrity golf tournament which will be streamed live to the company’s 250m subscribers. The unconventional show, featuring teams made up of professional golfers and Formula One racing drivers, is billed as a one-off. It may turn out to be a warm-up for something bigger.Netflix says the purpose of the cup is to promote “Full Swing” and “Drive to Survive”, its successful docu-series about golf and racing. Lately the company has been active in a niche in what it calls sports shoulder-programming, commissioning factual series such as “Break Point” (following professional tennis players) and “Unchained” (tracking the Tour de France), as well as profiles of stars such as David Beckham.Showing sport itself has not tempted the streaming giant. Rights are wildly expensive—America’s National Football League (nfl) earns more than $10bn a year from its media deals—as well as low margin: the more value broadcasters get out of the games, the more the leagues demand when the rights come up for renewal. Last year Ted Sarandos, Netflix’s co-chief executive, said the company was “not anti-sports, we’re just pro-profit”.That wording left the door open to a different approach—and the Netflix Cup suggests one. By owning the tournament, Netflix will keep any upside. “If they create value, they will enjoy the fruits of that, as opposed to creating value for another sports league who might turn around and ask them for an increase,” says Brandon Ross of LightShed Partners, a research firm. Netflix has reportedly explored buying small sporting outfits such as the World Surf League on this basis.The bigger question is whether the company might one day bid for rights to established leagues. Analysts increasingly believe that it will, though they disagree on when. “Netflix’s next frontier has to be more sports rights,” says Michael Nathanson of MoffettNathanson, another research company, who sees the golf cup as a test of sport’s ability to attract viewers to the platform, and of Netflix’s ability to execute live content. He sees rights to America’s National Basketball Association, which come due for renewal in 2025, as a possible target. Mr Ross thinks that is too soon.Netflix downplays all such talk. But it has more reason than in the past to bid for sports. Since its subscriber growth stalled early last year, leading to a plunge in its share price, Netflix’s executives have racked their brains for new ways to expand. Last year the company introduced advertising, which it had previously dismissed. This year it has cracked down on users sharing passwords, which it once encouraged. Sport could help to attract new subscribers, particularly in foreign markets where the streamer has struggled to break through. Cricket turbocharged the growth of Disney+ in India—though it proved so expensive that Disney eventually dropped it.Netflix’s newish ad business also makes sport more attractive. Sport appeals to advertisers, who say that it engages audiences like nothing else, while being reliably brand-safe (some advertisers balk at showing off their products alongside, say, “Squid Game”). Live action means ad breaks can’t be skipped; fans are loth to slip out to put the kettle on for fear of missing the action. And sport offers unmatched scale, with nfl games regularly drawing 20m concurrent viewers in America on Sunday nights.If Netflix were to take to the field it could be game-changing. Sports-rights holders have cashed in following interest from deep-pocketed streamers such as Apple, Amazon and Google (which last year bought nfl rights for YouTube). But they are nervous that old-media bidders are tightening their belts. Disney (which owns espn, a giant sports network) and Warner Bros Discovery are both aggressively economising as their legacy cable networks shrink. “The entire [sports] content world right now…is hoping that Netflix gets involved in bidding for sports rights,” says Mr Ross. “And all of the traditional media buyers are praying that Netflix doesn’t.”Netflix, meanwhile, is simply praying that its live-streaming technology holds up. Its first live show, a comedy special with Chris Rock in March, went well. But in April a live episode of “Love is Blind”, a dating contest, was a technical fiasco. As the Netflix Cup tees off, the people behind the camera may be more nervous than the players.■ More

Tourists on Mallorca might now marvel at a new attraction on the Mediterranean island: a miniature economy entirely energised by “green” hydrogen. At its heart, two solar plants power an “electrolyser”, which splits water into oxygen and hydrogen, creating carbon-free fuel. The hydrogen can propel buses, be injected into the island’s gas grid and power fuel cells at hotels and the port. “The project shows what is possible,” says Belén Linares, head of innovation at Acciona Energía, a renewable-energy firm that is one of the project’s investors.There is one snag: the hydrogen has yet to materialise. Because of a design flaw, the electrolyser, which is made by Cummins, an American firm, has been recalled. Importing green hydrogen, which is derived from renewable sources, is impractical. Buses and fuel cells stand unused. A newly elected local government also appears less interested. The previous administration talked “a lot of hot air”, according to a quote in the local press by the new mayor of Palma, the island’s capital.Boundless possibilities, or hot air? The same question also hangs over a wider green-hydrogen economy, which European governments hope to see emerge in the Mediterranean basin, turning the region into a sun-fuelled counterpart to a wind-driven northern dynamo already taking shape around the North Sea. The prize is large. If plans for Europe’s southern powerhouse go well it will give the continent access to cheap renewable energy and allow it to clean up its carbon-spewing heavy industry.The Mediterranean has always been a conduit for energy. From the days of Roman dominance to the 19th century it was manpower in the form of enslaved Africans. Today it is mostly natural gas. Half-a-dozen pipelines connect Europe to Africa and the Middle East. The EU depends on the region for over a third of its natural-gas imports. In the age of renewable energy, countries on the shores of the Med boast some of the best conditions on Earth for harvesting natural forces.Solar capacity shows vast potential. Spain on average basks in an annual 4,575 kilowatt-hours (kWh) of sunlight per square metre and Morocco in 5,563 kWh, double what Germany can expect. Sparse populations mean that Spain and Portugal have ample land for such plants, as do the deserts of northern Africa and the Middle East. In some parts of Morocco and Mauritania both sun and wind are abundant, forming rare sweet spots where hydrogen electrolysers can run virtually non-stop. “There are only ten such locations around the world,” explains Benedikt Ortmann, who runs the solar business of BayWa, a German energy and construction company.Tapping this reservoir of renewable energy is not a new idea. In the early 2000s an association backed by dozens of corporations, mostly German, came up with the idea of plastering the Sahara with giant solar plants. But support for Desertec, incorporated in 2009, quickly evaporated mainly because of the cost of the technology. The development of better and cheaper means of harvesting the sun’s rays is behind a revival of the idea. According to the International Renewable Energy Agency, the average cost of electricity of utility-scale solar plants has declined from $0.45 per kWh in 2010 to $0.05 last year.Transporting the energy north, to where it is needed, is now also more feasible. Desertec’s plan involved undersea cables, which have limited capacity. But now cheaper and efficient electrolysers can convert electricity into hydrogen at source. This can then be transported as a gas or a derivative, such as liquid ammonia. Analysts expect that in a few years green hydrogen from north Africa will cost under $1.50 per kilogram, probably making it cheaper than “blue” hydrogen, which is derived from natural gas but requires the resulting carbon to be captured and stored.Demand for energy from the south is much more likely to materialise than in the days of Desertec, too. Hydrogen and its derivatives will be badly needed as carbon-free feedstocks for Europe’s steel and chemicals industries. Of the 20m tonnes that the eu has set as a consumption target by 2030, much will come from its southern fringe and northern Africa.The region’s position as Europe’s southern powerhouse is, however, not a given. Europe has to jump-start a market for a new energy source and do so in a deregulated arena with many competing players. “It’s a chicken-and-egg problem,” says Kirsten Westphal of the German Association of Energy and Water Industries, a lobby group. Simultaneously ramping up demand and supply is a delicate balancing act. Companies are hesitant to commit to long-term offtake agreements if they are unsure about the availability and pricing of hydrogen. This, in turn, discourages producers from making crucial investment decisions. It doesn’t help that political instability in northern Africa increases risks and thus the cost of capital.Yet the biggest problem is linking both sides of the market, which starts with establishing physical connections. Most of the hydrogen will first need to be transported by ship, probably in the form of ammonia (liquid hydrogen, which has to be kept at -253°C, is tricky to move around). But shipping capacity is limited. James Kneebone of the Florence School of Regulation estimates that, even if it were technically possible, repurposing the entire existing global fleet of vessels able to transport liquefied natural gas could only deliver some 6.5m tonnes per year. That leaves a reliance on pipelinesExperts are divided over whether existing gas networks can be upgraded for hydrogen and building new pipelines is expensive. Geopolitical turmoil may deter investments in pipelines as well as hydrogen production. All three corridors identified by the eu through which hydrogen could flow in the Mediterranean basin cross troublesome territory. Hydrogen piped from Mauritania would ideally go through Western Sahara but Morocco’s control of the region is disputed. An alternative under consideration is an offshore route via the Canary Islands.Once built, pipelines are vulnerable to political interference. In November 2021 Algeria’s rocky relations with Morocco led to a cutting off of diplomatic relations and an interruption of gas flows through the Maghreb-Europe pipeline, which connects Morocco’s gasfields with Spain, via its neighbour’s territory.Closer to home, things are no less complicated. An agreement for an underwater pipeline connecting Barcelona to Marseille, from where hydrogen could be transported from Spain through existing infrastructure via France to Germany, could still get caught up in a spat between Germany and France over whether nuclear power should be considered “green”. Moreover, Air Liquide, a French firm that is the world’s largest producer of industrial gases, is lobbying hard against a project that would devalue its own network of hydrogen pipelines.Europe has no choice but to confront these problems if it wants to meet its ambitious targets to reduce carbon emissions. Some steps have already been taken. They include the launch by the European Commission of half a dozen initiatives, from a “hydrogen accelerator” to spread the use of the gas, to a “European hydrogen bank” to jump-start trade. More importantly, the commission has allowed subsidies to flow by relaxing state-aid rules, so member countries can support firms in their efforts to decarbonise. Funds have also been earmarked for hydrogen pipelines, such as a 3,300km link from Algeria and Tunisia to Austria and Germany. And hydrogen projects in northern Africa will benefit from investment from institutions such as the European Bank for Reconstruction and Development.Some member states want to move faster. Spain and Portugal have embarked on ambitious national strategies, aiming to transform the Iberian peninsula into a green-hydrogen hub. But it is Germany, which will have to import up to 70% of the hydrogen needed to decarbonise its mighty heavy industry, that is keenest to see it thrive. Germany has already set aside more than €8bn ($8.6bn) to help its firms go green. In a show of zeal, a couple of years ago, the country’s foreign office embarked on “hydrogen diplomacy”, complete with half a dozen “hydrogen embassies” in key countries. More recently, the ministry of economic affairs spawned H2Global, a platform for trading hydrogen.Above all Germany seems to acknowledge that it needs to give in order to get. It appears not just happy to see the erection of solar plants and electrolyser farms in Africa, but is ready to help create local jobs, upgrade grids and build desalination plants (electrolysers need a lot of pure water). In time Germany may even accept that parts of its heavy industry could migrate to where the hydrogen is produced. “The industrial map always follows the energy map,” observes Simone Tagliapietra of Bruegel, a think-tank.Such schemes are vital if Germany is to avoid a situation in which it depends on unpredictable authoritarian regimes for energy, as it did with Russia and natural gas. “To avoid a repeat with hydrogen, Germany needs to build true partnerships,” says Andreas Goldthau of Erfurt University. If all goes to plan and Europe’s southern dynamo gets up to speed, spots like Mallorca will buzz not just for their beaches and nightlife, but for the energy sparked by hydrogen electrolysers. ■ More