Good morning.
Today’s must-read is the cover story from our February magazine about OpenAI, written by Jeremy Kahn with reporting from Michal Lev-Ram and Jessica Mathews. They correctly compare ChatGPT’s release last November to a Netscape or iPhone moment—a technology breakthrough that opens up vast new space in the public imagination.
The potential is huge, which is why Microsoft is extending its partnership with OpenAI through a “multiyear, multibillion dollar investment”—reportedly a $10 billion outlay that would value the company at near $30 billion. One can imagine a future where everyone has a “generative A.I.” assistant that offers quick solutions to business challenges, writes instant computer code based on verbal commands, and conjures up art and video on demand. The upside is boundless.
But the downsides are clear as well. ChatGPT is often wrong, and provides no attribution or sourcing for its information. It has made it instantly easier to saturate the Internet with invasive ads and dubious information, and has opened up a whole new superhighway for cheating in schools. OpenAI’s CEO Sam Altman captured it when he said that the “the good case is just so unbelievably good that you sound like a crazy person talking about it,” but “the worst case is lights out for all of us.” We seem to have reached a point in human history when each new wave of technology propels us closer to both nirvana and annihilation.
Existential issues aside, the story also raises a host of interesting business angles. For starters, how can a company that has only $30 million in revenue and over $500 million in expenses be worth nearly $30 billion? Even if this is a Netscape moment, remember what happened to Netscape? And while Microsoft seems wise to embrace the moment, it is looking at an unusual structure for its investment that will cap long-term earnings potential at around $100 billion, with the technology reverting to a non-profit once the cap is reached. Is this a new model for the future?
I can’t tell you with any degree of confidence how this all plays out. But I can promise you it is going to be quite a show. So read this story. One way or another, your future depends on it.
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
