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Regardless of the board's failure to make their case, recent news suggests that the SEC is going to investigate whether it is true that Altman acted in the mann

Regardless of the board's failure to make their case, recent news suggests that the SEC is going to investigate whether it is true that Altman acted in the manner you describe, which would be a violation of fiduciary duty. I agree that it seems like an open & shut case. Typical SEC timelines mean that this will go public in about 18 months from now. An anonymous person has already filed an SEC whistleblower complaint about the behavioral pattern of Altman and Nadella, which has SEC Submission Number 17006-030-065-098. https://pressat.co.uk/releases/ai-community-calls-for-investigation-into-allegations-against-openai-ceo-sam-altman-and-microsoft-ceo-satya-nadella-0c7faf1ae54bf2017621682327bd9738/ https://pressat.co.uk/releases/ai-community-calls-for-invest... As the quid pro quo favoritism allegations remain under investigation, it is crucial to note that they are as yet unproven, and both Altman and Nadella are presumed innocent until proven guilty. https://influencermagazine.uk/2023/11/allegations-of-quid-pro-quo-behavior-tech-community-scrutinizing-satya-nadella-and-sam-altmans-high-stakes-friendship/ https://influencermagazine.uk/2023/11/allegations-of-quid-pr... 11 hours ago, the SEC tweeted the following new rule, which could be interpreted as a declaration that if Altman and Nadella are found guilty in this case, the SEC will block certain asset sales by OpenAI until the conflict of interest is unwound / neutralized: The Commission has adopted a new rule intended to prevent the sale of asset-backed securities (ABS) that are tainted by material conflicts of interest. Washington D.C., Nov. 27, 2023 — The Securities and Exchange Commission today adopted Securities Act Rule 192 to implement Section 27B of the Securities Act of 1933, a provision added by Section 621 of the Dodd-Frank Act. The rule is intended to prevent the sale of asset-backed securities (ABS) that are tainted by material conflicts of interest. It prohibits a securitization participant, for a specified period of time, from engaging, directly or indirectly, in any transaction that would involve or result in any material conflict of interest between the securitization participant and an investor in the relevant ABS. Under new Rule 192, such transactions would be “conflicted transactions.” https://twitter.com/SECGov/status/1729895926297247815 https://twitter.com/SECGov/status/1729895926297247815 https://www.sec.gov/news/press-release/2023-240 https://www.sec.gov/news/press-release/2023-240 More information: The Company exists to advance OpenAI, Inc.’s mission of ensuring that safe artificial general intelligence is developed and benefits all of humanity. The Company’s duty to this mission and the principles advanced in the OpenAI, Inc. Charter take precedence over any obligation to generate a profit. https://stratechery.com/2023/openais-misalignment-and-microsofts-gain/ https://stratechery.com/2023/openais-misalignment-and-micros... Some analysts, including Stratechery writer Ben Thompson, have described the 2019 acceptance of Microsoft’s controversial investment by Altman as the beginning of a troubling pattern of Altman repeatedly making deals with Microsoft which were often unfavorable to OpenAI. ... As Thompson describes it, this pattern of behavior culminated in an unusual intellectual property licensing arrangement which Microsoft’s Investor Relations site describes as a “broad perpetual license to all the OpenAI IP developed through the term of this partnership” “up until AGI” (Artificial General Intelligence). This perpetual license agreement includes the technology for OpenAI’s flagship products GPT-4 and Dall•E 3. https://www.microsoft.com/en-us/Investor/events/FY-2023/AI-Discussion-with-Amy-Hood-EVP-and-CFO-and-Kevin-Scott-EVP-of-AI-and-CTO https://michigan-post.com/redditors-from-r-wallstreetbets-call-attention-to-possibility-that-an-sec-investigation-of-openai-ceo-sam-altman-and-microsoft-ceo-satya-nadella-may-soon-be-filed/ https://michigan-post.com/redditors-from-r-wallstreetbets-ca... U.S. Securities and Exchange Commission – Tips, Complaints, and Referrals – Summary Page - Submitted Externally – PDF excerpt obtained 2023-11-26 via Signal Submission Number (redacted) was submitted on Wednesday, November 22, 2023 at 12:18:27 AM EST This PDF was generated on Wednesday, November 22, 2023 at 12:28:38 AM EST Image above includes ... the heading of a 7-page PDF titled "TCRReport (1).pdf" which was received by this reporter over the weekend via Signal. https://www.outlookindia.com/business-spotlight/sec-considering-investigation-of-openai-ceo-sam-altman-and-microsoft-ceo-satya-nadella-for-quid-pro-quo-favor-trading-news-333201 https://www.outlookindia.com/business-spotlight/sec-consider...

nirv 3y ago
Very interesting, thanks for posting this.
- upwardbound 3y ago
  Interestingly, it appears that Microsoft has been caught violating SEC regulations at least 6 previous times, and that's just what I turned up in a cursory search: 2023: https://www.theregister.com/2023/02/03/activision_sec_settlement/ https://www.theregister.com/2023/02/03/activision_sec_settle... 2019: https://techcentral.co.za/eoh-microsoft-ensnared-in-sec-corruption-complaint/178295/ https://techcentral.co.za/eoh-microsoft-ensnared-in-sec-corr... 2013-2019: https://fcpa.stanford.edu/investigation.html?id=156 https://fcpa.stanford.edu/investigation.html?id=156 2013-2016: https://www.seattletimes.com/business/microsoft/ex-microsoft-manager-to-pay-380k-settlement-in-insider-trading-case/ https://www.seattletimes.com/business/microsoft/ex-microsoft... 1999: https://www.itprotoday.com/windows-8/sec-investigating-microsoft-cookie-jar-accounting https://www.itprotoday.com/windows-8/sec-investigating-micro... 2002: https://www.computerworld.com/article/2575713/microsoft-sec-in-accounting-probe-settlement-talks.html https://www.computerworld.com/article/2575713/microsoft-sec-...
  - jacquesm 3y ago
    And yet, they continue to exist and no CEO of MS ever stepped down because of any of these. And I predict that even if Microsoft is going to be caught again that it will be a non-event in terms of actual repercussions. If Nadella exits MS HQ in Seattle in handcuffs I would be most surprised.
    - upwardbound 3y ago
      Yeah. I think the most realistically-achievable positive outcome is that Microsoft is forced to give up their new board-observer seat, which seems highly improper for them to have since the board they are observing is supposed to make decisions that benefit all of humanity equally. If Microsoft gets to have a fly on the wall in those discussions, it gives them a gold mine of juicy insider knowledge about which sectors of the economy are about to be affected next by Generative AI — knowledge which they can use to front-run the market by steering the roadmaps of Bing, MS Office, etc. so as to benefit from upcoming OpenAI product launches before any non-insiders are aware of what OpenAI is currently planning. Microsoft plainly shouldn't be allowed to have this advantage, in that giving an advantage to any one party directly harms the mandate set forth in OpenAI's Charter: Broadly distributed benefits We commit to use any influence we obtain over AGI’s deployment to ensure it is used for the benefit of all, and to avoid enabling uses of AI or AGI that harm humanity or unduly concentrate power. Our primary fiduciary duty is to humanity. We anticipate needing to marshal substantial resources to fulfill our mission, but will always diligently act to minimize conflicts of interest among our employees and stakeholders that could compromise broad benefit. https://openai.com/charter https://openai.com/charter It certainly seems that Microsoft, a "stakeholder", has managed to get a highly improper listening seat that will give them the ability to act on insider information about what's coming next in AI, allowing Microsoft to front-run the rest of the AI software industry and all those industries it affects, in a way that will plainly "compromise broad benefit". (Since any wealth that accrues excessively to Microsoft shareholders is not distributed to other humans who don't hold Microsoft shares.) A mere 10 days ago, Nadella was shamelessly throwing his weight around on national TV, by appearing on CNBC where he improperly pressured the OpenAI non-profit board — which owes nothing to him legally or morally — to give him more deference, in direct violation of the "always diligently act to minimize conflicts of interest among our employees and stakeholders that could compromise broad benefit" provision of the OpenAI non-profit charter. https://www.cnbc.com/2023/11/20/microsoft-ceo-nadella-says-openai-governance-needs-to-change-no-matter-where-altman-ends-up.html https://www.cnbc.com/2023/11/20/microsoft-ceo-nadella-says-o...

nirv 3y ago

Very interesting, thanks for posting this.

upwardbound 3y ago
Interestingly, it appears that Microsoft has been caught violating SEC regulations at least 6 previous times, and that's just what I turned up in a cursory search: 2023: https://www.theregister.com/2023/02/03/activision_sec_settlement/ https://www.theregister.com/2023/02/03/activision_sec_settle... 2019: https://techcentral.co.za/eoh-microsoft-ensnared-in-sec-corruption-complaint/178295/ https://techcentral.co.za/eoh-microsoft-ensnared-in-sec-corr... 2013-2019: https://fcpa.stanford.edu/investigation.html?id=156 https://fcpa.stanford.edu/investigation.html?id=156 2013-2016: https://www.seattletimes.com/business/microsoft/ex-microsoft-manager-to-pay-380k-settlement-in-insider-trading-case/ https://www.seattletimes.com/business/microsoft/ex-microsoft... 1999: https://www.itprotoday.com/windows-8/sec-investigating-microsoft-cookie-jar-accounting https://www.itprotoday.com/windows-8/sec-investigating-micro... 2002: https://www.computerworld.com/article/2575713/microsoft-sec-in-accounting-probe-settlement-talks.html https://www.computerworld.com/article/2575713/microsoft-sec-...
- jacquesm 3y ago
  And yet, they continue to exist and no CEO of MS ever stepped down because of any of these. And I predict that even if Microsoft is going to be caught again that it will be a non-event in terms of actual repercussions. If Nadella exits MS HQ in Seattle in handcuffs I would be most surprised.
  - upwardbound 3y ago
    Yeah. I think the most realistically-achievable positive outcome is that Microsoft is forced to give up their new board-observer seat, which seems highly improper for them to have since the board they are observing is supposed to make decisions that benefit all of humanity equally. If Microsoft gets to have a fly on the wall in those discussions, it gives them a gold mine of juicy insider knowledge about which sectors of the economy are about to be affected next by Generative AI — knowledge which they can use to front-run the market by steering the roadmaps of Bing, MS Office, etc. so as to benefit from upcoming OpenAI product launches before any non-insiders are aware of what OpenAI is currently planning. Microsoft plainly shouldn't be allowed to have this advantage, in that giving an advantage to any one party directly harms the mandate set forth in OpenAI's Charter: Broadly distributed benefits We commit to use any influence we obtain over AGI’s deployment to ensure it is used for the benefit of all, and to avoid enabling uses of AI or AGI that harm humanity or unduly concentrate power. Our primary fiduciary duty is to humanity. We anticipate needing to marshal substantial resources to fulfill our mission, but will always diligently act to minimize conflicts of interest among our employees and stakeholders that could compromise broad benefit. https://openai.com/charter https://openai.com/charter It certainly seems that Microsoft, a "stakeholder", has managed to get a highly improper listening seat that will give them the ability to act on insider information about what's coming next in AI, allowing Microsoft to front-run the rest of the AI software industry and all those industries it affects, in a way that will plainly "compromise broad benefit". (Since any wealth that accrues excessively to Microsoft shareholders is not distributed to other humans who don't hold Microsoft shares.) A mere 10 days ago, Nadella was shamelessly throwing his weight around on national TV, by appearing on CNBC where he improperly pressured the OpenAI non-profit board — which owes nothing to him legally or morally — to give him more deference, in direct violation of the "always diligently act to minimize conflicts of interest among our employees and stakeholders that could compromise broad benefit" provision of the OpenAI non-profit charter. https://www.cnbc.com/2023/11/20/microsoft-ceo-nadella-says-openai-governance-needs-to-change-no-matter-where-altman-ends-up.html https://www.cnbc.com/2023/11/20/microsoft-ceo-nadella-says-o...