Skip to content

Podcast

Tech Stock Shock + Solving the Mystery of OpenAI's "Blip" + Tinder's Flirt-Off

Hard Fork

Source ↗ ← All highlights
  • Tech Stock Impact
    • Apple stock dropped over 8%, Amazon over 7%, and NVIDIA over 6.5% after the tariff announcement.
    • This represents a significant market cap drop for tech companies. Transcript: Casey Newton So tell us what these tariffs are exactly. Kevin Roose So there are basically two tariffs that got announced on Wednesday. One is this 10% baseline tariff that is going to apply to goods shipped to the United States from countries all over the world. And then there are these even higher specific country tariffs that will apply to goods shipped from those countries to the U.S. So the announcement said that there would be a 34% additional tariff on Chinese goods, a 32% tariff on Taiwanese goods, a 20% tariff on goods from the EU, and various other tariffs on Other countries, including Vietnam and India. (Time 0:02:51)
  • Consumer Impact
    • Tariffs increase the cost of goods for American consumers.
    • Companies will likely pass on the increased import costs to consumers. Transcript: Casey Newton And what did we get in exchange for putting these tariffs on our other countries, Kevin? Kevin Roose So the rationale that Donald Trump and his advisors are giving for these tariffs is that this is about fairness, right? They believe that the U.S. Consumer, the U.S. Economy has been getting a raw deal for many years because companies are able to sell goods to customers in the U.S. From overseas without paying a sort of tariff. Meanwhile, some of those other countries are putting tariffs on goods that we export to them. And so in the mind of the Trump administration, this is sort of designed to level the playing field and to maybe boost domestic manufacturing, because if it’s much more expensive to Import goods from other countries, we might start making them ourselves here. (Time 0:03:38)
  • Global Supply Chain Disruption
    • Global supply chains affect most goods, including tech products manufactured or assembled overseas.
    • Increased tariffs significantly impact these supply chains and prices. Transcript: Kevin Roose So the most obvious objection to these tariffs is that they will radically increase the cost of the goods that Americans buy from overseas. It is not hard to come up with examples of this. Basically, everything in your house probably touches an international supply chain in some way. Smartphones, laptops, other devices, all of these things are either manufactured or assembled overseas in countries like China, Vietnam, and India. And if you just slap a huge new tariff on those goods, the companies that make that stuff are not just going to like eat that cost and continue to sell you your iPhone or your laptop or your Monitor at the same price. They are going to pass that cost on to the consumer. (Time 0:04:55)
  • COVID-19 Parallel
    • COVID-related supply chain disruptions caused price increases and shortages for US consumers.
    • New tariffs could lead to similar disruptions. Transcript: Casey Newton Right. And we should assume that as a result, people are actually just going to buy much less stuff rather than pay those much higher prices. Yes. Kevin Roose I mean, this is what we saw during COVID when a lot of supply chains got disrupted. You know, it was harder and more expensive to get goods shipped from countries like China to the United States. And as a result, American consumers saw that their prices went up. There were sort of like shortages of various goods. And I think it’s worth also saying like, this is not a small change in the cost of goods. So one firm that looked at these tariffs said that as a result of the tariffs on countries like China and Vietnam, where new iPhones are assembled, the cost of a new iPhone under these Tariffs could rise by 43 percent. And that’s with just these tariffs on these two countries. Right. (Time 0:05:41)
  • Impact on AI Development
    • The tariffs might significantly affect AI development by increasing GPU costs.
    • GPUs are essential for training large AI models. Transcript: Casey Newton Well, here’s what I’m going to say. The next journalist who gets added to a signal chat featuring the vast majority of the Trump administration needs to ask this question. All right, Kevin. Well, we don’t know exactly if AI was used to create this tariffs, but it seems like these tariffs are likely to affect the development of AI in the future. How do you see that playing out? Kevin Roose Yeah, this is one of the most interesting pieces for me. It’s still a little unknown how these tariffs will impact the chips that are used to train and build AI models. One carve-out in this tariff announcement was specifically about semiconductors, which would seem to say that you could still buy your GPUs from Taiwan and not have the tariffs apply If you are a company in the U.S. Who wants to build and train a new AI model. But as people quickly started to point out, just because semiconductors are exempt from the tariffs does not mean that things with semiconductors in them are exempt from the tariffs. In particular, it appears, based on people who have closely read the details of this announcement, that while CPUs, the sort of processors in your computers, are exempt from these Tariffs, graphics cards, which include the things made by NVIDIA that would be used to train, for example, a very large AI model, may not be exempt from these tariffs. (Time 0:12:33)
  • The Altman Mystery
    • Sam Altman’s firing from OpenAI in 2023 remains a mystery.
    • The board cited “not consistently candid” communication as the reason. Transcript: Casey Newton All right, Kevin. Well, if there is one thing that we love on this podcast, it is an unsolved mystery. A cold case. And no mystery has haunted us the way that Sam Altman’s firing in November of 2023 has. Kevin Roose Yes, I would say in the history of this podcast, there has never been a bigger unanswered question than what the heck was that all about? Casey Newton Yeah, and now look, I know that for some of you, this is going to feel like a settled question. Subscribe at schwab.com/oninvesting or wherever you get your podcasts. The board said that Sam had not been, quote, consistently candid in his communications with the board. And then eventually he was brought back a few days after he was fired. And so it feels like, OK, you know, we know as much as we’re ever going to know where we know to our satisfaction, but I have not been satisfied. There are so many questions about what Sam’s top deputies were telling the board, what the board thought was going to happen after they made their decision, what Sam’s top deputies Thought. And finally, Kevin, we are starting to get some answers thanks to the diligent reporting of Wall Street Journal reporter Keech Hagee. Kevin Roose Yes. So we should start with our disclosures. Obviously, I am an employee of the New York Times, which is suing OpenAI and Microsoft over alleged copyright violations. And obviously, I have a boyfriend and he works at a company called Anthropic. So Keech is the author of a new book about Sam Altman and OpenAI called The Optimist. That book comes out in just a few weeks. And over the weekend, she published an adapted excerpt from that book in the Wall Street Journal, where she gave a bunch of new and scoopy details about what happened during the period In November 2023 that is now known at OpenAI as the blip. (Time 0:21:11)
  • Ilya’s Frustration
    • Ilya Sutskever’s frustration with Sam Altman stemmed from unresolved conflicts within OpenAI’s research team.
    • Ilya felt Sam didn’t intervene effectively in a power struggle. Transcript: Casey Newton Keach, why were they getting so frustrated with him? And how did that sort of play out in the blip? Keach Hagey Well, let’s take them one at a time, right? So first we have Ilya. And I think one of the revelations from the piece over the weekend is that Ilya had wanted to do this for a very long time. Which I don’t think people really understood. And that the roots of this conflict go back years. And he co-founded OpenAI, right, with Sam. And he was the beacon that brought all the other researchers there. But over the years, he had started to see a pattern of behavior. He felt, you know, Sam would say one thing and then he would do something else or and then he would pretend like the difference between those things was an accident, kind of like lots of These oopsie moments this is again ilia’s perspective and it started back in 2021 when ilia basically had the idea for the reasoning model and spun up a team and was pursuing it for months And then another rival researcher jakob pachocki had a similar idea kind of started his own team and over over, what ended up happening is the teams merged. Ilya stepped back and sort of Jakob took over this team. And then Ilya went to go do super alignment, if you remember super alignment, right, AI safety. So it wasn’t that it was rested from his hands, but there was a power struggle that he lost in a way. (Time 0:26:22)
  • Mira’s Perspective
    • Mira Murati felt Sam Altman exhibited toxic behaviors, including undermining colleagues.
    • She also struggled with managing Greg Brockman due to his close relationship with Sam. Transcript: Casey Newton Us a bit more about Mira’s experience since she was also central to this story. She’s a CTO. You know, some people have said to me that in the days leading up to this fire, she was basically running the company day to day while Sam was flying all over the world being like the world’s Chief AI diplomat. What was the source of her frustration with Sam? And as she was talking to the board, do you think she had a desired outcome in mind the way that maybe Ilya did? Keach Hagey So that is a really fascinating question. Her frustration, which, you know, she says that she had told Sam, right, that she had given Sam this feedback directly, is that he had a whole set of what she would consider toxic behaviors. And the basic playbook was he would say whatever it took to get what he wanted, and if that didn’t work, then he would undermine you. So that was one. Another one was about the dynamic between Sam Altman and Greg Brockman, right, who were both co-founders, really close. And Greg Brockman was a really gifted coder who would you know kind of crash into people’s projects sometimes and do amazing things there but um created a lot of chaos in the organization And often mirror would be asked to rein him in and there was this difficult situation where he was on the board because he had co-founded the company but he also kind of reported to mira And so that just made things totally impossible right every time she would try to rein him in he’d go to Sam, and then it was terrible for her. (Time 0:28:22)
  • The List of Complaints
    • A list of complaints against Sam Altman, including screenshots of Slack messages, was sent to the board.
    • This list contributed to the board’s decision to fire him. Transcript: Kevin Roose Tell us about that list and the kinds of things that were on it. Keach Hagey So this list was sent by like a disappearing PDF. Casey Newton Which I didn’t even know that was a feature, but I didn’t know you could send a disappearing PDF in Gmail. Keach Hagey Yeah, but apparently you can do like a whole disappearing Gmail. And, you know, there’s one document about Sam and one document about Greg Brockman. And the stuff about Sam was mostly made up of screenshots from Mira Marati’s Slack. So both sort of Ilya and Mira had been collecting receipts, basically, of this pattern of behavior that’s hard to pin down. Describe (Time 0:30:01)
  • Employee Concerns
    • OpenAI employees believed the company’s valuation would plummet without Altman.
    • A tender offer potentially worth billions influenced their support for his reinstatement. Transcript: Kevin Roose They’re the dog that caught the car. Absolutely. Casey Newton A big part of Sam’s reinstatement rested on the fact that his employees had come to the conclusion that the company would fall apart without him. Why did they believe that? Keach Hagey Well, in part because there was this tender offer that was on the table that was going to value the company at nearly $90 billion, up from $30 billion. So if you were new to the company, your strike price was going to be $30 billion, and you were going to make a lot of money sort of instantly if this tender offer went through. And it was just completely widespread across the company. They believed that that was going to go to zero if Sam left. And I’ve talked to folks who signed that letter who said, we didn’t even really think about it very hard, right? Like, we were expecting millions, and our millions were going to go up in smoke if Sam left. So it wasn’t hard to bluff even and say, we’re going to go to Microsoft. (Time 0:34:07)
  • Altman’s Superpower
    • Sam Altman’s strength lies in fundraising and his ability to secure capital.
    • This focus can overshadow other aspects of leadership and cause friction. Transcript: Casey Newton How do you reconcile the Sam that you have interviewed with the Sam that seems to drive people insane and is starting other companies to destroy him? Keach Hagey I think the explanation lies in how central fundraising is to this whole story. Fundraising is Sam’s superpower, right? He’s an incredible salesman. This is really like a story of capital almost more than anything else. That is what he is better at than anyone else on earth. And so I think that those relationships that he has with the investors are really the most important relationships and sort of everything else has to sort of be secondary to that. That’s the engine of all of this, right? If you can’t raise the next round, party’s over. This stuff doesn’t make money. So that’s sort of how I sort of square it. And that, you know, someone once said that the thing about venture capital, right, is you have to have, I mean, Sam is an incredible person in a meeting, right? Like if investors get in a room with Sam, they have no defenses. They just give him money. Like it’s impossible to say no. But the way venture capital works, lots of one-on meetings, right? So you can kind of create a whole world like in front of a person. But that’s different than being the CEO of an organization where everyone’s world has to like be the same. When people start comparing notes, that’s when the problems arose. (Time 0:35:42)
  • Altman’s Motivation
    • Sam Altman is motivated by a desire to make a significant impact, not just financial gain.
    • He aspires to be a historically important figure. Transcript: Kevin Roose There’s a popular misconception that the people who are running the biggest, most advanced AI companies are just in it for the money, right? That they will get rich if their companies succeed. And that’s why they’re hyping all this stuff and promoting these narratives about AGI and all the changes that they see coming. I always point out when people say that to me, these people are already fabulously wealthy. Everyone running one of the big AI labs already has more money than they could ever spend in 100 lifetimes. They are not doing this for money, but they are doing it for something. Something is motivating them to get up every day and go to work and try to build AGI and whatever comes after it. So in Sam’s case, if it’s not money, what do you think it is? Keach Hagey I think Sam wants to matter. As one of the people who knew him in his early career said, you know, Sam always wanted to be a great man of history. And of course, Sam hates that and totally denies ever wanting that. But this is how other people perceived him. And you can kind of see it in his political aspirations, right? You know, it’s known that he was kicking around the idea of running for governor of California. There’s some scoops in the book about other things he was considering running for. And I think he has a political mind and that he wants to sort of reshape society. I mean, it’s simple as that, right? He’s put out many plans. He’s blogged and written essays about various ways he thinks that this might best be done. Yeah. (Time 0:37:58)