Unpacking the studies in OpenAI

More questions for OpenAI

Sam Altman is three months back as CEO of OpenAI, leading one of the world’s most important technology companies at the forefront of the artificial intelligence boom.

But a report from The Wall Street Journal that the SEC is investigating The question of whether Altman misled investors is a reminder that OpenAI and its hyper-ambitious chief face a level of scrutiny that could derail their global plans.

The SEC’s investigation emerged in the wake of Altman’s brief ouster. and is linked to claims by former OpenAI executives that he was not “consistently candid in his communications,” The Journal reported, citing unidentified sources. (It’s unclear whether the investigation will lead to a full investigation; the agency’s involvement was all but a given, given the nature of the allegations.)

The SEC isn’t the only regulator watching the Altman drama: Federal prosecutors in Manhattan have also raised questions, according to the Journal.

Meanwhile, law firm WilmerHale is almost done with its investigation into Altman. The Times reports this. Altman had agreed to have outside attorneys review the circumstances of his brief departure; Since then, they have interviewed OpenAI executives and directors. WilmerHale could present the findings next month to the company’s board of directors, which Altman is no longer a member of.

OpenAI is facing more legal challenges. Digital media outlets including Raw Story and The Intercept sued the company in Manhattan federal court on Wednesday, saying ChatGPT was trained in their work without consent or compensation. The case adds to a growing number of lawsuits by media companies (including The Times) and content creators over whether OpenAI’s tools infringe on their copyrights.

Perhaps even more consequential are investigations by US and European regulators into OpenAI’s relationship with Microsoft, and whether the tech giant’s latest investment in the startup is an acquisition.

All this comes at an inopportune time for Altman, even though he has a history of it bouncing back from adversity. OpenAI’s success has made him the AI ​​industry’s de facto global ambassador. But the company is locked in a race with competitors to innovate – while avoiding innovation kind of pitfalls that threaten to undermine trust between users and regulators.

Meanwhile, Altman is thinking even bigger. He is looking to investors from the Middle East and elsewhere to fund a hugely ambitious initiative to produce new AI chips. (Altman has pushed back against reports that he wants to Raise $7 trillionbut no one disputes that he has great goals.)

The project, and more specifically the secrecy surrounding it, was one of the reasons why OpenAI’s previous directors staged a coup against him.

HERE’S WHAT’S HAPPENING

Donald Trump is having a mixed day in some of his many lawsuits. The Supreme Court has agreed to Trump’s claim that he would be immune from prosecution on allegations that he plotted to undermine the 2020 election. An appeals court in New York has rejected Trump’s request to suspend the more than $450 million fine he faces in a civil fraud case; His lawyers have said he may have to sell some properties to pay for it.

Congressional leaders reach a stopgap for government funding. The agreement, which provides funding to some agencies until March 8 and others until March 22, avoids a partial shutdown that would have started on Saturday. That said, lawmakers may still struggle to reach consensus on a final spending bill. Meanwhile, Mitch McConnell said he would step down as Senate Republican leader after the November election.

Shares of two companies are plummeting after a high-profile departure. Shares in WW International are down nearly 24 percent in premarket trading after Weight Watchers’ parent company said Oprah Winfrey left the board. (It also announced an earnings forecast that fell short of Wall Street expectations.) And shares in Snowflake are down 23 percent in premarket hours after the cloud software maker said Frank Slootman, its highly regarded CEO, was retiring effective immediately.

Bitcoin is back

Crypto trading officially entered the mainstream financial sector last month when the SEC greenlit a number of new Bitcoin investment products. The move came with a warning from SEC head Gary Gensler that investors should remain cautious about the famously volatile assets, but that appears to have done little to spoil a torrid rally.

Bitcoin has risen by about 35 percent since then, fueled in part by investor demand for the new exchange-traded funds. The value of a Bitcoin token hit $63,000 on Thursday, about 10 percent away from the November 2021 record.

Investor enthusiasm for these new fund products has been sky high since day 1, driving up prices for the token, the funds that trade it, and crypto stocks like Marathon Digital, a crypto mining company. MicroStrategya software company that owns nearly $12 billion worth of Bitcoin.

The numbers to watch: More than 1 billion shares of spot Bitcoin ETFs were traded in the first month. according to Morningstar Direct. And on Tuesday alone, $520 million flowed into BlackRock’s new Bitcoin ETF. Bloomberg reports.

Expect more volatility. A relatively small percentage of investment advisors are now allowed to invest client money in these products, analysts say, even though crypto has vastly outperformed the S&P 500 over the past 18 months.

Meanwhile, investors are getting bigger used crypto betting to take part in the promotion.

Bitcoin scarcity could shock prices. Analysts note that Bitcoin will undergo a “halving” in April, an event that happens about every four years where coin production shrinks. Bitcoin boosters see this as another catalyst for higher prices.

The demonstration caught the bears off guard. Investors who have shorted the new Bitcoin ETFs since their inception are down a combined $97 million on Wednesday as they face pressure, Ihor Dusaniwsky, director of data provider S3 Partners, told DealBook. (Shorts make profits when the price of an asset falls.) “We should expect more short coverage in these ETFs as crypto prices rise,” he added.

Putting the brakes on Chinese EVs

Western carmakers have warned Washington and Brussels about the threat of Chinese rivals upending their markets – and regulators on both sides of the Atlantic are listening.

President Biden on Thursday called Chinese-made electric vehicles a threat to national security and announced that the Commerce Department would open an investigation to assess their impact.

The measures could trigger a larger crackdown. They are designed to prevent cheap electric vehicles made in China or assembled in Mexico by Chinese companies from flooding the U.S. market. (Chinese automakers are already subject to a Trump-era 25 percent tariff.) The new investigation will examine whether internet-enabled vehicles expose Americans’ data to authorities in Beijing.

The move could calm American automakers and workers. The Alliance for American Manufacturing, a lobbying group for automakers, and the United Steelworkers Union, said in a report last week that cheap Chinese electric cars are a problem. “existential threat.” Chinese rivals, the report added, were building production capacity in Mexico to avoid Trump tariffs.

The Biden administration has also held talks with unionized auto workers and automakers, including Tesla.

EVs are the driving force behind China’s ambition to become a leading automaker and exporter. BYD, a Warren Buffett-backed company, overtook Tesla as the world’s best-selling EV maker last quarter. Analysts say the company did it to keep the costs low and making many of its own components.

European car manufacturers are feeling the pressure more acutely. While The US industry is somewhat isolated by the Trump tariffs, Chinese cars are sold in the EU in increasing numbers.

The The European Commission has started an investigation in Chinese imports last year, but some manufacturers warn this may not be enough. Luca de Meo, CEO of Renault, said this week that governments may want to… state-backed, pan-continental entity such as Airbus to curb the Chinese threat.

Game, Saudi, match

Lawmakers may be stepping up their scrutiny of the Saudi Arabian business community, but that is not slowing the country’s growing push on the sports and global business world. The oil-rich kingdom’s massive sovereign wealth fund has signed a deal with the professional men’s tennis tour, showing that growing ties between Western business and the regime are alive and well.

The Saudi stamp will be everywhere at the sport’s biggest events. Financial details of the deal were not disclosed. But the Association of Tennis Professionals said on Wednesday that the multi-year collaboration would include on-court branding for the Saudi Public Investment Fund during major tournaments, starting next month at Indian Wells in California. The ATP ranking and the annual prize for the best-ranked player will also be named after the PIF.

The Saudis see sports as the key to expanding their reach. The Saudi-backed LIV Golf posed an existential threat to the PGA Tour. It lured away top players with huge salaries before rival golf leagues agreed to negotiate a peace deal. That started a congressional investigation.

The kingdom has also spent billions on football, boxing and Formula 1.

Saudi’s investments are intended to achieve two goals. Crown Prince Mohamed bin-Salman’s Vision 2030 plan is a… trying to diversify the economy away from the oil sector. The kingdom also sees global investments as a way to expand its geopolitical power, deepen ties with the West and rebuild its reputation after its agents killed journalist Jamal Khashoggi in 2018.

The kingdom fills a gap previously occupied by China. As tensions increased between Washington and its allies and Beijing, it became more difficult for American companies to do business and raise money in China. American companies are increasingly looking to the Middle East instead. To wit: Many members of America’s corporate elite attended PIF’s Future Investment Initiative conference in Miami last week, eager to network and even praise the regime in hopes of tapping into its wealth.

READING THE SPEED

Offers

• Disney agreed to merge its Indian operations with a media company controlled by Reliance Industries, the conglomerate led by billionaire Mukesh Ambani. (NYT)

• Stripe announced a deal to let employees sell their shares to outside investors, who like the payment processing giant at $65 billion. (TechCrunch)

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