OpenAI’s Channel to the Government

[The Bleeding Edge]( OpenAI’s Channel to the Government By Jeff Brown, Editor, The Bleeding Edge --------------------------------------------------------------- What do the following things have in common? - A foundational artificial intelligence (AI) model - A new product release - Executive departures - A corporate restructuring - A little-known public company with a Scandinavian-sounding name - Fast-track agreements with the Department of Energy At first glance, it wouldn’t seem like much. But these seemingly random, uncorrelated events are deeply intertwined. It’s all connected… And at the center of it all is OpenAI CEO, Sam Altman. Cracking the Code on Multi-Step Reasoning On September 16 in [The Bleeding Edge – Smarter Than Human PhDs]( we explored the latest foundational model from OpenAI – o1. The release of o1 came as a surprise to some who had been predicting the downfall of OpenAI, given some high-level departures from the company earlier this year. It was referred to as a brain drain. Yet o1 demonstrated remarkable advancements in its reasoning skills. In certain fields like biology, physics, and chemistry, it operated at levels higher than human PhD-level “experts.” Something changed in the neural network – this is a big leap forward in AI development. Multi-step reasoning has long been a challenge in artificial intelligence, and it has been a major focus of the industry this year. OpenAI has cracked the code. Others won’t be far behind. At the same time that OpenAI was developing o1, it was also working on its Advanced Voice Mode (AVM), which it just released a couple of days ago. For those who have a subscription to ChatGPT, you can access AVM by tapping on the headphones icon on the right side of the text input box shown below. AVM is capable of understanding and speaking in 50 languages. The speech is very humanlike, it's comfortable, and the AI can engage in back-and-forth natural conversation. There is still some latency, and I’m sure the high demand doesn’t help, but it's impressive, nonetheless. It allows us to interact naturally, without typing, just through conversation, and we can even interrupt when we want. The AI will also proactively question the user as if in a normal conversation. It can feel a bit uncanny at times. In fact, if there was no latency at all, for many it would feel entirely human. The momentum and progress with OpenAI has been nothing short of remarkable. And investors agree. The current fundraising taking place at OpenAI is set to raise $6.5 billion at a $150 billion valuation, representing a more than 5x increase in valuation since its April 2023 round. Remarkable. But there’s a caveat… Recommended Link [The Perceptron]( [image]( Discover an “invisible” pattern in the crypto market that could help you make large gains, over and over again… while Bitcoin bounces up and down For a limited time, you can get the name and ticker of Jeff’s top crypto pick FREE [Details here]( -- Carte Blanche to Build The word is that the $150 billion valuation is contingent upon whether or not OpenAI can restructure itself as a for-profit entity. OpenAI was originally founded as a non-profit AI research company with a mission to develop AI responsibly for the benefit of all. And in fact, none other than Elon Musk was a founder of OpenAI, but ultimately disassociated from the company after Altman and others created a for-profit entity operating under the umbrella of a non-profit parent company. That change happened around the time that Microsoft was investing heavily in OpenAI, grabbing exclusive access to the source code that OpenAI was developing. Seems this was the plan all along… But there was one problem… the profits were capped. This week, as part of the latest fundraising, the board of OpenAI is working to restructure OpenAI into a for-profit, public benefit corporation, a radical swing from OpenAI’s original stated mission. Altman is expected to be awarded a 7% equity stake in the new for-profit, which would be worth $10.5 billion. And Elon Musk doesn’t like it one bit: As he states above, it’s illegal. And this June, he already filed a lawsuit to prove it. On this point, I doubt he’ll prevail. There are vested interests that want Altman and OpenAI to succeed. Keep reading for more on that in a minute… Others don’t like the latest developments at all. OpenAI’s CTO, Chief Research Officer, and VP of Training have all now resigned, clearly unhappy with the direction of OpenAI… Or perhaps they are unhappy with the equity positions offered to them in the new for-profit entity in comparison to Altman’s likely $10.5 billion windfall. But here’s the thing… OpenAI won’t have any problem recruiting and hiring the top talent in the industry. It is leading the race in generative AI and has no problem getting additional funding to swing for the moon. The CTO and the other two executives may have felt unhappy that they weren’t getting their “fair share,” but new talent into the company won’t complain at all with multimillion equity packages. And what’s more – doors are opening left and right for Altman. He has carte blanche to build. And he speaks with someone in the government every few days. Altman is clever and has been proactively fostering those relationships with various government entities. He knows that he’ll need support, and he knows OpenAI can offer “them” something “they” want. Why Hello, Oklo… If we use our imaginations just a bit, is it that hard to believe that a conversation like this might be occurring… Setting: Undisclosed meeting location in a highly secure government facility with no wireless communications. Government Officials: Sam, the progress at OpenAI is nothing short of incredible. The power of your latest foundational models is something that we need access to. We need to be able to train your most advanced model on all of our intelligence data from our three-letter agencies so that we can have a custom version of your most advanced foundation model designed specifically for our intelligence community. Is that something you can do for us? Altman: Well, sure. With enough computational power and electricity, we can make this happen. It won’t be cheap though, and there are some things I’m going to need. Government Officials: Name it. Money is no object. The risk of China becoming an AI superpower is real, and we need this as soon as possible. Altman: Ok, in that case, my biggest obstacle right now is getting gigawatt-scale power generation. I need it to support the AI data centers that I’m building and will need to get you what you want. I’ll need support from the government, and specifically from the Department of Energy, on a few next-gen nuclear projects to get it done. Government Officials: Agreed, we’ll make it happen. And here’s what most don’t know about Sam Altman… Altman happens to be the founder of a small venture capital firm – Hydrazine Capital. And that firm owns more than 3 million shares (2.58%) of a company called Oklo (OKLO). Oklo is a next-generation nuclear fission energy company. Sam Altman was a seed round investor in it. Oklo also received a grant from the U.S. Department of Energy in 2021. Source: Oklo Oklo has developed modular nuclear fission technology – capable of gigawatt-scale – with a focus on safety in the design and the ability to use recycled nuclear fuel. Source: Oklo Oklo (OKLO) just went public via a reverse merger in May this year. And just look at this string of events in the last several months: - January 2024 – The U.S. Department of Energy approves the safety design system for Oklo’s Aurora Fuel Fabrication Facility at the Idaho National Laboratory (INL) designed to reuse nuclear fuel. - February 2024 – Oklo enters into a land rights agreement with the Southern Ohio Diversification Initiative (SODI) to purchase land and develop two nuclear power plants in Southern Ohio. But wait! SODI is a Department of Energy-designated community reuse organization. - September 2024 – Oklo signs an agreement with the Department of Energy to advance the siting of a nuclear power plant in Idaho Falls, ID near the Idaho National Laboratory. I hope that you’re all seeing what I’m seeing. The doors are open, and Altman is being fast-tracked. He’s getting whatever he needs to build. The sticky glue in this web of interconnection is all about AI. And Sam Altman is at the center of it, leading the charge to achieve artificial general intelligence (AGI) before anyone else does – whether anyone likes it or not. Recommended Link [Next AI Shock: November 19th?]( [image]( Thanks in part to [Bill Gates and his Stargate project]( we could have an AI market shock as soon as November 19th. Most people don't realize we’re moments away from a seismic shift. 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