Finance

Nicola Mendelsohn, head of global business group at Meta, reflected on her outlook for artificial intelligence in 2024.
“This is a seismic moment,” Mendelsohn told CNBC at the World Economic Forum in Davos, Switzerland.

The new artificial intelligence era represents a huge moment for the tech industry that has not been seen in a decade, according to a top executive at Facebook parent company Meta Platforms.
Reflecting on 2024, Nicola Mendelsohn, head of global business group at Meta, said it was important to talk about the potential for AI as a force for good, while also paying mind to the dangers of the technology.

“This is a seismic moment,” Mendelsohn said, in conversation with CNBC’s Tania Bryer at the World Economic Forum in Davos, Switzerland. “We will look back on this year seeing a really pivotal year in terms of how it was across society.”
In her role at Meta, Mendelsohn leads relationships with top marketers and agencies. She is also a seasoned advertising executive, with past experience including partner and executive chairman at London advertising agency Karmarama, and non-executive director of alcoholic beverages firm Diageo.
Meta had a banner year in 2023, with shares climbing sharply, while investors praised CEO Mark Zuckerberg’s push for a “year of efficiency” driven by sharp cost-cutting and a change in focus towards more profitable lines of business.
Last year also marked a major pivot toward artificial intelligence for Meta — an area where the company plays a key role with its LLaMA large language model. Meta also remains heavily focused on the metaverse with its Quest 3 headsets.
“From a Meta perspective, we can be a leader and a pioneer,” Mendelsohn said. More

UBS completed its takeover of Credit Suisse in June 2023 after a rescue deal was brokered by Swiss authorities to prevent the 167-year-old institution’s collapse and protect the Swiss economy.
Ermotti was brought back to the helm at UBS to oversee the complex integration of Credit Suisse’s business, a mission thus far deemed a resounding success by the market.

Sergio Ermotti, chief executive officer of UBS Group
Stefan Wermuth | Bloomberg | Getty Images

UBS CEO Sergio Ermotti on Wednesday said people with concerns about the size of the bank’s balance sheet are getting “indoctrinated” by academics and should “do their homework.”
UBS completed its takeover of Credit Suisse in June 2023 after an emergency rescue deal was brokered by Swiss authorities to prevent the then 167-year-old institution’s collapse and protect the Swiss economy.

Ermotti was brought back to the helm of UBS to oversee the complex integration of Credit Suisse’s business — a mission thus far deemed a resounding success by the market. The bank’s share price has recovered from below 17 Swiss francs ($19.69) per share in the aftermath of the deal to over 25 Swiss francs as of Wednesday morning.
However, the new entity’s combined balance sheet is estimated to be around twice the size of the entire GDP of Switzerland, raising concerns about the concentration of risk in the Swiss economy.
Speaking to CNBC on the sidelines of the World Economic Forum in Davos, Switzerland, on Wednesday, Ermotti said he understood why some portions of the Swiss population still have reservations, as they are being “indoctrinated almost daily by a lot of academics” and focusing solely on the size of the bank’s balance sheet versus the national GDP.

“If you look at risk-weighted assets as a percentage of GDP or as a percentage of our balance sheet, you will discover that the new UBS is de facto very low risk, very focused business model. The risk we have is in Swiss mortgages, in Lombard loans, in stuff that is very low risk,” he said.
Ermotti contended that the “new UBS” incorporating its fallen rival to create a globally competitive, low-risk bank is a “reflection of Switzerland.”

“Switzerland is a small country that punches well above its weight in many sectors — in food, in pharma, in innovation — and having a strong bank that can compete, not only in Europe, but globally, is part of our economy,” he said.
He also argued that the focus on the risk to the Swiss taxpayer fails to take into account the scale of the bank’s own tax contributions, urging the public to “look at the risks but also the benefits.”
“In that sense, our role is to help the people who are not convinced, that want to listen to arguments, to inform them so that they come to an opinion that is informed, hopefully the right one. I respect people having other opinions, but I do expect them to do their homework,” he added. More

Economists polled by Reuters had expected a modest decline in the annual headline consumer price index to 3.8%, after November’s sharper-than-expected fall to 3.9%.
The closely watched core CPI figure — which excludes volatile food, energy, alcohol and tobacco prices — came in at an annual 5.1%, above a 4.9% Reuters forecast and unchanged from November.

Andresr | E+ | Getty Images

LONDON — U.K. inflation unexpectedly nudged upwards to 4% year-on-year in December, fueled by a rise in alcohol and tobacco prices.
This was the first month in which the annual consumer price index has risen since February 2023.

Economists polled by Reuters had expected a modest decline in the annual headline CPI to 3.8%, after November’s sharper-than-expected fall to 3.9%.
Month-on-month, the headline CPI rose by 0.4%, above a consensus forecast of 0.2% and up from -0.2% in November.
“The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from alcohol and tobacco while the largest downward contribution came from food and non-alcoholic beverages,” the Office for National Statistics said.

The closely watched core CPI figure — which excludes volatile food, energy, alcohol and tobacco prices — came in at an annual 5.1%, above a 4.9% Reuters forecast and unchanged from November.
The largest upward contribution to the core figure came from travel and transport services, the ONS said.

Inflation still on track for 2%
“As we have seen in the U.S., France and Germany, inflation does not fall in a straight line, but our plan is working and we should stick to it,” British Finance Minister Jeremy Hunt said in a statement.
“We took difficult decisions to control borrowing and are now turning a corner, so we need to stay the course we have set out, including boosting growth with more competitive tax levels.”
U.S. inflation also rose in December to an annual 3.4% from 3.1% in November, while euro zone CPI jumped to 2.9% from 2.4% in the previous month.
The Bank of England will hold its next monetary policy meeting on Feb. 1, after hiking interest rates rapidly over the past two years in a bid to tame runaway inflation.
“This unexpected rise in inflation is a timely reminder that the struggle against soaring inflation is not yet over, particularly given stubbornly high core and services inflation,” said Suren Thiru, economics director at ICAEW.
“While inflation may rise again in January, following the increase in Ofgem’s energy price cap, it should fall at a decent pace thereafter, aided by the expected drop in energy bills from April and lower food inflation.”

Although ongoing tensions in the Red Sea could make core inflation more sticky, Thiru suggested the rate should pull back throughout the year as slower wage growth and a stagnating economy begin to suppress demand.
This was echoed by PwC Economist Jake Finney, who said headline inflation is still on track to return to the Bank of England’s 2% target as early as April.
“It is likely that the Bank of England will respond to easing inflation pressures by materially lowering their projections in the upcoming February Monetary Policy Report,” he added.
“This should pave the way for rate cuts later this year, potentially as early as May if the labour market continues to cool.”
A fresh round of jobs data on Monday also highlighted the tricky path ahead for the British central bank, as it decides when, and how sharply, to cut interest rates in 2024. Markets are currently pricing more than 100 basis points of cuts to the benchmark rate across the year.
The number of vacancies posted declined by 49,000 over the final quarter of the year, while the unemployment rate remained largely flat at 4.2%.
Pay growth, a key data point for the Bank, slowed significantly in the three months to the end of November. As inflation is falling faster than that rate, average pay is still growing in real terms. More

GDP for the last three months of 2023 rose by 5.2%, missing analysts’ estimates of 5.3% in a Reuters poll. GDP growth for the full year was also 5.2%.
Retail sales grew by 7.4% in December from a year ago, also missing expectations for 8% growth.
China resumed reporting the unemployment rate for young people.

Construction at China Vanke Co.’s Isle Maison development in Hefei, China, on Monday, Nov. 27, 2023.
Bloomberg | Bloomberg | Getty Images

BEIJING — China missed fourth-quarter GDP estimates on Wednesday, while it resumed reporting the unemployment rate for young people.
GDP for the last three months of 2023 rose by 5.2%, according to China’s National Bureau of Statistics. That’s below the 5.3% growth forecast in a Reuters poll.

GDP growth for the full year was also 5.2%, compared with a 3% increase in 2022.
“Macro data from 2023 shows China’s economy is going through a transition to a new growth model,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note.
“With investment in the property sector falling, the economy is more dependent on the manufacturing sector and service sector,” he said. “This transition will take time to be accomplished. The key question in the market is when the transition in the property sector will finish.”

Property prices in 70 major Chinese cities fell by 0.4% in December from the prior month, maintaining a pace of decline not seen since 2015, according to data released Wednesday and analysis using Wind Information.
Real estate, which makes up well over 20% of China’s economy, has seen a government crackdown on developers’ high reliance on debt for growth.

Investment into real estate fell by 9.6% in 2023, while those into infrastructure and manufacturing rose by 5.9% and 6.5%, respectively.
Overall, fixed asset investment for 2023 rose by 3%, a touch above the predicted 2.9% increase.
China’s property sector is in a process of “adjustment and transformation,” Kang Yi, director of the statistics bureau, told reporters in Mandarin, translated by CNBC.
Looking ahead to 2024, he said the economy faces a number of challenges including insufficient domestic demand, overcapacity in some industries and weak expectations about the future.
Kang said authorities needed to respond to those difficulties in accordance with the directives from China’s top leaders in an annual meeting last month.

Youth unemployment remains high

The statistics bureau on Wednesday also resumed reporting figures on youth unemployment.
Excluding people still in school, the unemployment rate for young people aged 16 to 24 was 14.9%, while the rate in cities in December was 5.1%.

The bureau had temporarily suspended the release of the younger age group’s unemployment rate in summer, citing the need to reassess calculation methods. That unemployment rate had previously climbed to records above 20%.

The statistics bureau said China’s population shrunk by more than 2 million people to 1.41 billion in 2023 from the prior year. The population had declined by 850,000 people in 2022 from 2021.
“The improvement [in youth unemployment] is a bit surprising to me, but I can see that it is a result of government efforts and not so much economic fundamentals,” Dan Wang, chief economist at Hang Seng Bank, said Wednesday on CNBC’s “Street Signs Asia.”
“High income jobs have been difficult to find, but lower-skilled work has not been difficult to find in 2023,” she said.
Uncertainty about future income has weighed on consumption.
Retail sales rose 7.4% in December from a year earlier, missing expectations for an 8% growth. They rose by 7.2% for the full year.
December saw a 29% surge in jewelry and 26% increase in purchases of clothes and shoes.
Sales of daily necessities, medicine, cultural and office products, as well as construction-related materials fell in December.
China had abruptly ended its Covid-19 controls in December 2022 and people had rushed to buy medicine amid widespread illness that month.
Industrial production rose by 6.8% in December from a year earlier, beating forecasts for 6.6% growth.

Questions about stimulus

The economic data was as the market generally expected and already priced in, said Bruce Pang, chief economist and head of research for Greater China at JLL.
He said there’s uncertainty over how much stimulus Beijing will choose to pursue, and how authorities will balance short- and long-term risks. Pang said China will likely focus on fiscal support this year.
The statistics bureau indicated in a release Wednesday that as a part of economic support, Chinese authorities would work to improve policy coordination among different regulatory bodies.
“We must effectively enhance economic vitality, prevent and mitigate risks, improve social expectations, consolidate and boost the sound momentum of economic recovery and growth,” the bureau said, “in a bid to effectively upgrade the quality and appropriately expand the quantity of the national economy.”
China ended its stringent Covid-19 controls in late 2022, but its rebound from the pandemic wasn’t as fast as several economists had expected at the start of 2023.
This year, unless there are significant stimulus measures, China’s GDP growth could slow to 4.6% from 5.2% in 2023, according to an average of five investment firms’ forecasts compiled by CNBC.
“Monetary and fiscal policy last year was actually quite conservative. Given that we (China) is in such an economic downturn, we should have seen lower interest rates and more fiscal money spending in all levels of government,” Hang Seng Bank’s Wang said.
Chinese Premier Li Qiang in speech on Tuesday at the World Economic Forum in Davos noted that “in promoting economic development, we did not resort to massive stimulus. We did not seek short-term growth while accumulating long-term risks.”
“Rather, we focused on strengthening the internal drivers,” he said.

Read more about China from CNBC Pro

The statistics bureau also said Wednesday that retail sales in services surged by 20% in 2023 from a year ago.
Online retail sales of physical goods rose by 8.4%, accounting for nearly 28% of overall retail sales.
Analysis of digital payments transactions by BigOne Lab found the low-income segment — earning 5,000 yuan ($700) or less — rapidly increased their average spending per person in 2023 from a year ago.
The low income segment is mostly made up of young people ages 18 to 24, the report said.
That contrasts with the high-income segment — making 10,000 yuan ($1,400) or more a month — whose spending tapered off in the second half of 2023.
— CNBC’s Shreyashi Sanyal contributed to this report. More

OpenAI CEO Sam Altman speaks out on being fired by his board in November.
The unusual corporate structure of OpenAI is what led to Altman’s surprise ouster.
The night that the board of OpenAI voted out its founder and CEO, Sam Altman said he thought it was “wild,” felt “super confused” and was “super caught off guard.”

Sam Altman, CEO of OpenAI, during an interview at Bloomberg House on the opening day of the World Economic Forum in Davos, Switzerland, on Jan. 16, 2024.
Chris Ratliffe | Bloomberg | Getty Images

DAVOS, Switzerland — OpenAI founder and CEO Sam Altman said the night he was pushed out by the board was “wild,” and he felt “super confused” and was “super caught off guard.”
“But this is the structure, and I immediately just went to go thinking about what I was going to do next,” Altman, OpenAI’s CEO, said in a private gathering convened at the Bloomberg House on the Davos Promenade on Tuesday.

“It was not until some board members called me the next morning that I even thought about really coming back,” continued Altman, reflecting on the dramatic turn of events that led to his ouster — and subsequent re-instatement — in November. “But, like, the board did have all of the power there.”
Indeed, the unusual corporate structure of OpenAI — the creator of the buzzy A.I. tool ChatGPT — is what led to Altman’s surprise ouster.
Typically, it’s rare to see a founder forced out of their company, but Altman’s power differs to that of other major tech founders, in part because he has no actual ownership of the entity itself.
“I have no equity in OpenAI,” Altman said in a May Senate hearing on artificial intelligence.
“You need a lawyer or an agent,” Senator John Kennedy quipped, in a remark that proved prescient.

The organizational chart of the generative AI startup, valued by private investors at $86 billion, is decidedly confusing. It ultimately proved to be bad for its founder, both in terms of safeguarding control and holding a financial stake in the firm.
OpenAI’s board of directors sits at the top of the power pyramid, and they are the consortium of voices responsible for controlling the 501(c)(3) charity, OpenAI Inc.
Between the board and the non-profit sits a capped-profit company dubbed OpenAI Global, which Microsoft inked a $10 billion investment deal with in January last year. There are also a few other entities, including a holding company, that comprise the somewhat convoluted organization behind the biggest name in generative AI tech.

I would like to make all of our shareholders a bunch of money, but it was very clear to me what people’s priorities were.

Sam Altman
CEO, OpenAI

In November, the board said it had lost confidence in its leader and expelled the chief executive from the organization. The events that followed in the subsequent hours were messy and involved virtually the entire staff of OpenAI threatening to resign after their founder’s departure.
Concerns over AI safety and OpenAI’s role in protecting were at the center of Altman’s brief ouster from the company.
Despite Microsoft’s sizable investment in the startup, the tech giant neither had a board seat nor a say in Altman’s firing.
Within days, Altman was reinstalled to his original post, but speculation ran amok over the OpenAI drama that dominated the news cycle during Thanksgiving week.

Altman told the afternoon gathering in Davos that “in the middle of that crazy few days,” roughly 98% of the company had signed a letter saying they would resign if Altman was not restored to his position of CEO.
“That would have torched everyone’s equity, and for a lot of our employees, like this is all or the great majority of their wealth, and people being willing to go do that, I think is quite unusual,” Altman said of his team, adding that OpenAI’s investors were also about to watch their stakes go to zero, including Microsoft.
“I would like to make all of our shareholders a bunch of money, but it was very clear to me what people’s priorities were,” Altman said of the solidarity of his staff and investors.
Altman, who has demurred countless invitations from the press to speak out about his surprise firing and re-hiring, questioned the moderator over pursuing the line of questioning in the first place.
“Is [this] really what we want to spend our time on, like this soap opera rather than what AGI is going to do?” Altman asked in earnest.
When asked whether OpenAI would reform its structure and become a traditional Silicon Valley for-profit company, Altman was adamant that his startup wouldn’t go that way.
“We will never be a traditional company,” he said. “But the structure, I think we should take a look at the structure. Maybe the answer we have now is right, but I think we should be willing to consider other things.”
Altman added that now was not the time to reconsider company structure. Instead, he said the focus was on the board first.
“I think one of the things that’s difficult to fix for us about OpenAI is the degree to which our team and the people around us, invest in us or whatever, are committed to this mission,” Altman said.
— CNBC’s Rohan Goswami contributed to this report. More

Major international investment banks expect China’s economy to grow at a slower pace in 2024 than in 2023, according to annual forecasts released in the last few months.
The average prediction among five firms, including Goldman Sachs and Morgan Stanley, pointed to a 4.6% increase in real GDP this year, down from 5.2% expected for 2023.
The world’s second-largest economy has slowed from the double-digit growth of past decades, weighed down during the pandemic restrictions and, more recently, a slump in the real estate market.

MEISHAN, CHINA – JANUARY 15: A textile worker works at the workshop of Sichuan Renshou Jin’e Textile Co., Ltd. on January 15, 2024 in Meishan, Sichuan Province of China. (Photo by Pan Jianyong/VCG via Getty Images)
Vcg | Visual China Group | Getty Images

BEIJING — Major international investment banks expect China’s economy to grow at a slower pace in 2024 than in 2023, according to annual forecasts released in the last few months.
The average prediction among five firms, including Goldman Sachs and Morgan Stanley, pointed to a 4.6% increase in real GDP this year, down from 5.2% expected for 2023.

China was due Wednesday to release GDP figures for 2023, and previously announced an official target of around 5% growth for the year. Speaking at the World Economic Forum in Davos on Tuesday, Premier Li Qiang said the Chinese economy grew by around 5.2% last year.
Beijing is set to reveal this year’s target at an annual parliamentary meeting in early March.

China GDP forecasts

Firm
2024
2023

Goldman Sachs
4.8
5.3

UBS
4.4
5.2

Citi
4.6
5.3

JPMorgan
4.9
5.2

Morgan Stanley
4.2
5.1

Average
4.6
5.2

Among the five bank forecasts CNBC looked at, JPMorgan had the highest at 4.9%, while Morgan Stanley had the lowest at 4.2%.
“An important task in 2024 is to manage the downside risk in the economy, particularly from the housing market correction and its spillover risks,” JPMorgan’s Chief China Economist and Head of Greater China Economic Research Haibin Zhu and a team said in a report earlier this month.
“Deflation pressure will likely fade in 2024, with the turnaround in global commodity prices and domestic pork prices, but low inflation will stay along with insufficient domestic demand,“ the analysts said, noting that new tech and other sectors have grown rapidly, but not enough to offset housing and other drags on growth.

The world’s second-largest economy has slowed from the double-digit growth of past decades, weighed down during the pandemic by Covid-19 restrictions and, more recently, a slump in the real estate market.
Despite significant growth in sectors such as tourism and electric cars, China’s economy last year did not rebound from the pandemic as quickly as many banks had initially expected.
“The Chinese economy did not follow the script in 2023,” Goldman Sachs analysts said in their 2024 outlook in November.
They highlighted that in October, Beijing made the rare decision to increase the official fiscal deficit.
“Overall, we expect macro policy to ease notably [in 2024], particularly by the central government, in order to support the economy and to prevent real GDP growth from decelerating too much from 2023 to 2024.”

The International Monetary Fund in November also cited China’s policy announcements as a reason for its decision to raise the 2023 growth forecast to 5.4%, from 5% previously.
However, the IMF said it still expected China’s growth to slow in 2024 to 4.6% “amid continuing weakness in the property market and subdued external demand.”

It remains unclear to what extent China is willing to stimulate its economy.
Premier Li said Tuesday in Davos that the country “did not resort to massive stimulus. We did not seek short-term growth while accumulating long-term risks.”
In the long term, analysts generally expect China’s economy to slow further from a high base.
UBS expects annual GDP growth to slow to around 3.5% in the years following 2025 due partly to the housing slump, which they also expect to restrict how much China can deploy stimulus.

Read more about China from CNBC Pro

According to UBS analysts, there’s still growth potential China, specifically in further movement of workers from rural to urban areas, as well as investment in manufacturing, services and renewable energy.
Even at 3% to 4%, the pace of China’s growth remains faster than that of developed economies.
The IMF in October forecast U.S. real GDP would slow to 1.5% growth in 2024, down from 2.1% in 2023. The fund is set to release an update to its global predictions on Jan. 30. More

WHEN JAMES GORMAN took the helm of Morgan Stanley it was barely afloat. His tenure as the bank’s chief executive began on January 1st 2010, in the teeth of the global financial crisis. After the failure of Lehman Brothers, in 2008, fear had spread that other dominoes would soon topple. Morgan Stanley seemed a likely candidate. Hank Paulson, then treasury secretary, is rumoured to have offered it up to JPMorgan Chase for free (Jamie Dimon, JPMorgan’s boss, apparently declined). The firm then took a government bailout. In 2009 its return on equity, a benchmark measure of profitability, was just 4%.Fourteen years later Mr Gorman has handed the wheel of a far finer vessel to Ted Pick, the former head of its investment-banking and trading arms. “We had our moment before the abyss,” said Mr Pick on January 16th, during his first earnings call in charge. “We are determined never to face anything like those days again.”Mr Pick described Morgan Stanley’s progress after 2009 as a “classic ‘self-help’ story”. It started out as a highly leveraged, volatile outfit specialising in trading and investment banking. In the years since it has transformed itself into Wall Street’s pre-eminent wealth manager, through a series of well-chosen deals.Mr Gorman has often described this strategy as building a “ballast” to balance the “engine room” of the traditional investment-banking business. He started by scooping up Smith Barney, a wealth-management business, from Citigroup for a song during the financial crisis. In 2019 a small stock-plan administration company followed. Then in 2020 Mr Gormon pulled off two mammoth deals in just three months, buying E*TRADE, a brokerage firm, and Eaton Vance, an asset manager.The result is that Morgan Stanley is sitting on $6.6trn in client assets, the biggest pot of wealth in the world. It now earns almost two-thirds of its profits from that pot, and has posted a juicy return on equity, averaging 16% a year since 2020. Other global banks are now aping its push into wealth management. Analysts making the bull case for UBS’s recent acquisition of Credit Suisse, a firm with a large wealth business that ran into trouble in 2023, point to Morgan Stanley as an example of how such a merger can pay off.Could the firm become a victim of its own success? On the earnings call on January 16th one analyst asked Mr Pick if he anticipated fiercer competition in wealth management, as other banks attempt to beef up their operations. Margins in Morgan Stanley’s wealth-management business in 2023 were around 25%, a drop from the 30% or so the firm has posted in prior years. The share price fell by some 4.5% in the hours following the earnings call.Mr Pick himself seems set to stay the course. Those who have worked with him describe a disciplined, straight-talking, no nonsense kind of man—a steady pair of hands who can keep things sailing smoothly. “There may have been a change in leadership,” he told investors, “but there has not been a change in strategy.”He did not rule out that Morgan Stanley might grow through acquisitions, either. “We have made five different acquisitions. The view inside the house is: that’s good for now.” But if opportunities come up, especially outside America where the firm has lower market share, “we could staple them on,” he said.In a sign of how far Morgan Stanley has shifted from its past identity, Mr Pick added that he thinks the “ballast” and “engine room” analogy Mr Gorman favoured might need updating. “At one point we called the wealth and investment management business ‘the ballast’, which was the right word because we wanted to convey stability,” he said. But now he thinks “it is actually the engine for future Morgan Stanley growth.” ■ More

OpenAI CEO Sam Altman said artificial general intelligence, or AGI, could be developed in the “reasonably close-ish future.”
AGI is a term used to refer to a form of artificial intelligence that can complete tasks to the same level, or a step above, humans.
Altman said AI isn’t yet replacing jobs at the scale that many economists fear, and that it’s already becoming an “incredible tool for productivity.”

Sam Altman, CEO of OpenAI, at the Hope Global Forums annual meeting in Atlanta on Dec. 11, 2023.
Dustin Chambers | Bloomberg | Getty Images

OpenAI CEO Sam Altman says concerns that artificial intelligence will one day become so powerful that it will dramatically reshape and disrupt the world are overblown.
“It will change the world much less than we all think and it will change jobs much less than we all think,” Altman said at a conversation organized by Bloomberg at the World Economic Forum in Davos, Switzerland.

Altman was specifically referencing artificial general intelligence, or AGI, a term used to refer to a form of AI that can complete tasks to the same level, or a step above, humans.
He said AGI could be developed in the “reasonably close-ish future.”
Altman, whose company burst into the mainstream after the public launch of the ChatGPT chatbot in late 2022, has tried to temper concerns from AI skeptics about the degree to which the technology will take over society.
Before the introduction of OpenAI’s GPT-4 model in March, Altman warned technologists not to get overexcited by its potential, saying that people would likely be “disappointed” with it.
“People are begging to be disappointed and they will be,” Altman said during a January interview with StrictlyVC. “We don’t have an actual [artificial general intelligence] and that’s sort of what’s expected of us.”

Founded in 2015, OpenAI’s stated mission is to achieve AGI. The company, which is backed by Microsoft and has a private market valuation approaching $100 billion, says it wants to design the technology safely.
Following Donald Trump’s victory in the Iowa Republican caucus on Monday, Altman was asked whether AI might exacerbate economic inequalities and lead to dislocation of the working class as the presidential elections pick up steam.
“Yes, for sure, I think that’s something to think about,” Altman said. But he later said, “This is much more of a tool than I expected.”
Altman said AI isn’t yet replacing jobs at the scale that many economists fear, and added that the technology is already getting to a place where it’s becoming an “incredible tool for productivity.”
Concerns about AI safety and OpenAI’s role in protecting it were at the center of Altman’s brief ouster from the company in November after the board said it had lost confidence in its leader. Altman was swiftly reinstated as CEO after a broad backlash from OpenAI employees and investors. Upon his return, Microsoft gained a nonvoting board observer seat at OpenAI.
WATCH: OpenAI, Microsoft and NYT will likely reach a settlement

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