Good morning.
I’ve written here before about the pitfalls of chasing profit without purpose. But what about the pitfalls of chasing purpose without profit? That seems to be at the core of the dispute among the founders of OpenAI. The company was started as a nonprofit, dedicated to deploying AI “for the benefit of all” and to avoiding uses of AI that will “unduly concentrate power.” But with the release of ChatGPT it instantly became an economic powerhouse, with a market value of tens of billions of dollars and a relationship with Microsoft—the original undue concentration of tech power—that caused the tech giant’s stock price to soar.
Count me as one who prefers the for-profit model. A new technology with massive value for society should make the people who invent it wealthy and will concentrate power in the their hands. That’s how capitalism works. You are unlikely to change that by declaring your business a not-for-profit, dedicated to the benefit of all. Instead, you replace the relative clarity that comes from a principled pursuit of profit with the confusion that comes from a committee empowered as keepers of true purpose. Neither system is perfect. But the first has a far better track record of delivering value to society.
The OpenAI battle also clearly reminds us where power lies in today’s economy. The vast majority of OpenAI employees—more than 90%—have signed a letter demanding Sam Altman be reinstalled as CEO. If he isn’t, they can walk right out the door and sign up at Microsoft, which has cleverly hired Altman and former president Greg Brockman to lead a “new AI research team.” However the OpenAI boardroom drama ends, Microsoft wins.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
A Happy Meal for Carlyle
Carlyle is selling its stake in McDonald’s China operations for $1.8 billion, winning a 6.7 times return on its original investment. McDonald’s Corporation is now lifting its share in the joint venture to 48%; a group backed by state-owned CITIC owns the remaining share. China is McDonald’s second-largest market, after the U.S. Bloomberg
Twitter all-hands
X CEO Linda Yaccarino is asking employees to help find new revenue sources as big-name advertisers pull spending from the platform. “By all means, put your heads together to bring new revenue into the company,” she said at a hastily-called all-hands meeting on Monday. Companies like Apple and IBM suspended their ad spending following a report from Media Matters that X displayed sponsored posts next to pro-Nazi content. Owner Elon Musk is now suing the media watchdog group for defamation. Fortune
India tourism
India is on the verge of becoming a tourism powerhouse, thanks to its growing middle-class. But there’s a catch: Almost all of the estimated 5 billion leisure trips made by 2030 will be domestic, McKinsey projects. That’s cold comfort for nearby tourism hubs disappointed in the slow return of Chinese tourists, the world’s biggest travel spenders pre-COVID. CNBC
AROUND THE WATERCOOLER
Sharks are circling OpenAI on the hunt for AI talent, with Satya Nadella and Marc Benioff leading the feeding frenzy by Rachyl Jones
OpenAI made 5 huge governance missteps—here’s what boards can learn from its error by Lila MacLellan
A top analyst thinks we’re heading for a new ‘age of austerity’ by Sheryl Estrada and Shawn Tully
SEC alleges in new lawsuit that Kraken failed to register and commingled customers’ funds by Leo Schwartz
Australia’s second-largest telco loses its CEO after a network outage that hit almost 40% of the country’s population by Lionel Lim
Commentary: Jared Kushner, Arab and Israeli officials outline day-after solutions for the first time since the Oct. 7 attacks at Yale’s Middle East Peace Dialogue by Jeffrey Sonnenfeld and Steven Tian
This edition of CEO Daily was curated by Nicholas Gordon.
This is the web version of CEO Daily, a newsletter of must-read insights from Fortune CEO Alan Murray. Sign up to get it delivered free to your inbox.
