I didnât have this on my 2023 bingo card⦠[The Jolt with Stephen McBride] Why Sam Altman was fired Holy cow, itâs been one of the most extraordinary weekends of my career. I rewrote this whole issue of The Jolt at 1 a.m. because of the big news. In case you missed it, OpenAI (the company behind ChatGPT) fired its CEO Sam Altman on Friday evening. Iâve been working all weekend watching this coup play out. Iâm dedicating todayâs Jolt to answering the questions on everyoneâs mind: Why was Altman fired⦠what does it mean for AI (does it slow it down?)⦠and, most importantly, what does this mean for AI investors? First, an important reminder: Tomorrow is finally the big day. Iâm getting on camera to share my whole AI portfolioâfive stocks to buy and five to avoid. If you missed last weekâs early bird ticket window, itâs not too late. [Go here to get your ticket.]( [The ticket window closes at midnight TONIGHT, and we go âliveâ at 8 p.m. EST tomorrow.]( Letâs get after it! - Why was Sam Altman fired? Thereâs a group of people who think AI is going to go rogue and wipe out humanity. [We've made fun of these âdoomersâ before.]( My take: These folks need to lay off the Terminator movies. [AI will save millions of lives before it kills anyone.]( Unfortunately, a couple of these doomers helped found OpenAI and sit on its board of directors. Their #1 concern above all else is creating âsafeâ AI. They were extremely concerned that OpenAI was moving too fast. They didnât like that Sam Altman was raising money from the likes of Microsoft (MSFT) and moving full steam ahead on AI. So, they launched a coup and ousted him. According to leading tech outlet The Information, employees were told removing Altman was the âonly pathâ to achieving the companyâs mission of âbroadly beneficialâ AI. The new CEO of OpenAI, Emmett Shear, has called for an AI pause. - What does this mean for OpenAI? Last week, a top AI researcher told me, âOpenAI is kicking everyoneâs ass on AI.â OpenAI was weeks away from raising money at an $80 billion valuation, cementing itself as the most important company of the next decade. I didnât have OpenAI blowing its seemingly insurmountable AI lead on my bingo card⦠but thatâs what just happened. When Sam Altman got fired, several key people walked out in disgust. Now Iâm hearing dozens of employees are also resigning. Leaders matter. OpenAI is nothing without its people. It will lose 50% of its employees and 90% of its valuation in the next year. Given the move it just pulled, whoâs going to invest in OpenAI ever again? Way to snatch defeat from the jaws of victory, guys. - Does this mean AI development is grinding to a halt? No! It will do the total opposite⦠speed it up. Suddenly, AI is a multi-way race. A Cambrian explosion of AI competitors will spring up as a result of OpenAIâs demise. Itâs a great day for American tech. When Sam Altman led OpenAI, he had to pander to the âdoomersâ who wanted to slow AI development down. All the top talent will exit OpenAI. These folksâincluding Altmanâwill start new AI ventures unencumbered by this bizarre idea that AI is going to wipe out humanity. Full steam ahead on AI development! Itâs like someone just hit the âturbo boostâ button on AI. I am FAR more bullish on AI after this weekendâs drama. - Who is the biggest winner from the breakup of OpenAI? Microsoft. You may know Microsoft owns 49% of OpenAI. Itâs invested billions of dollars into the AI startup and practically bet its own future on artificial intelligence. At first, this weekendâs shenanigans looked terrible for Microsoft. I expected the stock to drop 10% or so this morning. But then CEO Satya Nadella pulled off a move ensuring heâll go down in the CEO âhall of fame.â He announced Sam Altmanâalong with several former key employees from OpenAIâwill join Microsoft to lead a new advanced AI research team! We just witnessed one of the greatest moves in business history. Books will be written about this deal. Microsoft just basically acquired OpenAI for free. What a masterclass! In time, this could add $1 trillion to Microsoftâs market cap. Microsoft is still the only big tech stock Iâd want to own. - Okay⦠so what happens now? Sam Altman and Co. have been given free rein to remake OpenAI within Microsoft⦠This new venture is equipped with limitless amounts of money and computer chips. As a public company that must answer to shareholders, Microsoft is incentivized to develop AI as fast as possible. Sam will poach top talent from OpenAI and build the ânextâ ChatGPT (GPT-5) so fast, itâll make your head spin. Oh, and get this: OpenAI rents its computing resources through Microsoftâs âcloud.â I bet Microsoft will restrict its access, like a boa constrictor suffocating prey. - What does all this drama mean for AI investors? Bullish. It speeds up AI deployment and spending. The biggest winner is, yet again⦠Nvidia (NVDA). Microsoft is one of Nvidiaâs largest customers. The software giant plans to spend $50 billion building out datacenters in 2024 alone! A big chunk of that will be spent on Nvidiaâs AI chips. (I expect Nvidia to crush earnings tomorrow and hit new record highs.) Weâre slap bang in the middle of the AI infrastructure buildout. We ran the numbers and found this is one of the largestâif not the largestâinfrastructure buildouts in history. Donât you want to invest in that? I sure do. Thatâs why two of the five AI stocks Iâll recommend at [tomorrow nightâs AI event]( are AI infrastructure plays. What a weekend! Hope to see you in the online audience tomorrow at our AI event ([get your last-chance ticket here](). Otherwise, Iâll talk to you Wednesday. Stephen McBride
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