Potential High-Profile Figure, Sam Altman, Potentially Suffers Significant Losses in This Election
As Trump prepares to take office, tech magnates are displaying submissive behavior and publicly showing appreciation towards him. Billionaires such as Mark Zuckerberg are already wealthier than they were on Monday, and Elon Musk has become one of the most influential figures worldwide. Those who have been Musk's longtime adversaries should beware. Sam Altman, a tech mastermind, and his company, OpenAI, are on the brink of becoming significant losses in Trump's next term.
Before Trump won the election, Altman and OpenAI were already slated to become one of tech's biggest losers in 2024. OpenAI functions as an endless money-burning machine that consumes electricity. ChatGPT, OpenAI's popular product, is favored by students and individuals who would rather not compose their own emails, but the demand for a monthly subscription fee of $20 is limited. Even though OpenAI boasts about the number of users it has, most of those users only cost it money.
The majority of users do not pay for ChatGPT's subscription fee. They are freeloaders. However, every search they conduct or image they generate costs money. By the end of this year, OpenAI is projected to lose $5 billion. Running those machines will reportedly cost $37.5 billion by 2029.
The source of the financial backing and computational power required to fuel OpenAI mainly comes from Microsoft, and there are indications that the tech giant may be distancing itself from OpenAI's endeavors. OpenAI is an intriguing organization. It is governed by a non-profit board that oversees a profit-driven company. Its primary objective is to develop an artificial general intelligence. Ilya Sutskever, the company's former chief scientist and a previous member of the board, regards AGI as a deity. He conducted rituals to ward off oppressive AI and led sessions of spiritual chants in the workplace.
By the end of the previous year, Microsoft was alarmed following the board—led by Sutskever—forcing Altman out. Despite Altman's return, the relationship between OpenAI and Microsoft has become strained. Microsoft is no longer providing the necessary computing power and funding to OpenAI to produce a supreme AI entity, and it is spreading such funds across other projects.
Established companies that will thrive during the AI bubble, which is undoubtedly on the horizon, will be those that focus on enterprise solutions and lucrative government contracts. Meta's Llama models are open-source, and the company announced this week that it would be collaborating with other tech firms, the U.S. government, and the Pentagon. On Thursday, Anthropic announced its partnership with Palantir and Amazon Web Services to provide AI tools to the U.S. military and intelligence agencies.
OpenAI's competitors seem to realize that AGI is a mirage that drains resources, and the true wealth lies in defense. But what is OpenAI doing to capitalize on this opportunity? OpenAI has partnered with government contractor Carahsoft to sell ChatGPT licenses to government entities. According to Forbes, the company has yet to secure a contract with the Pentagon but has sold licenses totaling $108,000 to NASA and $100,000 to the Department of Agriculture. These sums are small change for a company that claims it will soon require $40 billion annually to keep its operations running.
The role Musk will play in the upcoming Trump administration is uncertain. However, it is known that Musk harbors animosity towards Altman. Their feud is well-documented. "I am the reason OpenAI exists," Musk said in an interview with CNBC in May 2023. Musk was an original investor in the company in 2015 but soon distanced himself from the organization.
Since then, Musk has attempted to sue OpenAI multiple times and accused the company of deviating from its original mandate to develop AGI safely. The lawsuits have forcefully targeted Altman. In retaliation, OpenAI released emails between itself and Musk that provided its perspective on the matter. Musk sought complete control over the entire project and was apparently displeased when OpenAI declined to merge with Tesla and granted him full control.
This feud dates back to the beginning of the first Trump administration. Now, as we approach the commencement of the second administration, Musk is on good terms with the President-elect. Altman greeted Trump's victory with formal congratulations and expressed his hope for his success in the new role. "Congratulations to President Trump. I wish for his enormous success in the position," Altman posted on X.
It is wise for Altman to pay homage to Musk. The man is sharing photographs with Trump's family, directing rockets into space, revolutionizing satellite communications, and heading a social media platform that played a significant role in the U.S. elections. Musk ranks first on Bloomberg's list of the world's 500 wealthiest billionaires, whereas Altman fails to make an appearance on that list.
In the tech industry's future, companies focused on enterprise solutions and lucrative government contracts are expected to prosper during the AI bubble. OpenAI, however, seems to be capitalizing on this opportunity differently, partnering with government contractor Carahsoft to sell ChatGPT licenses to government entities.
Despite Musk's animosity towards Altman and his past lawsuits against OpenAI, the tech magnate's role in the upcoming Trump administration is uncertain. Musk's influence and success in fields like space exploration and social media, coupled with his wealth, make him a significant figure in the tech and political spheres.
