Layoffs bake bitter spat with Cake’s co-founders

This week’s On the Rise covers the rift between Cake Group's co-founders, the expanding Temasek map, and Sam Altman’s exit from OpenAI. [Read from your browser]( On the Rise 🚀 Welcome to On the Rise! Delivered every Tuesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in emerging tech. If you’re not a subscriber, get access by [registering here](. --------------------------------------------------------------- IN FOCUS In today's newsletter, we look at: - Cake Group’s [co-founder tussle amid layoffs]( - The growing number of [companies on Temasek’s map]( - Sam Altman’s exit from OpenAI Hello {NAME} , One of my friends from an Indian blue-chip company recently got laid off. Some of the reasons given to her were the economic downturn and an internal restructuring. While layoffs in a bear market can be a tough challenge, Singapore-based crypto firm Cake Group has an even tougher situation - it announced its own set of job cuts amid a rift between its two co-founders. In this week’s first big story, Scott's follow-up piece on Cake Group reveals that it let go of another 30% of its staff, bringing its headcount to 122. Besides this, he uncovered a disagreement between co-founders Julian Hosp and U-Zyn Chua. One of them is opposed to the layoffs, and an internal email reveals that the decision could be legally challenged. In our second big story, my colleague Collin explores the pivotal role played by Singapore state-owned investment firm Temasek. Today, it has 49 companies with 15 startups launched - a far cry from three years ago, when it only had nine companies under its wing. Meanwhile, in this week’s AI Odyssey, Collin raises questions surrounding OpenAI’s surprising move to oust its co-founder and CEO Sam Altman. -- Deepti  --------------------------------------------------------------- THE BIG STORIES 1️⃣ [Cake Group cuts staff by 30% amid rift between co-founders]( One of the crypto firm’s co-founders is opposed to the layoffs. 2️⃣ [Mapping Temasek’s role in the startup space (updated)]( The Singapore-based investor has launched 49 companies, including 19 investment firms and a venture-building arm, in its quest for disruptive businesses. --------------------------------------------------------------- AI ODYSSEY Promising AI developments we’re noticing Boardroom battle cracks OpenAI While the news of layoffs is sadly common during the current funding winter, what caught everyone by surprise last Friday was who got the ax. Sam Altman, co-founder and CEO of OpenAI - and the poster child of the generative AI revolution - was [ousted by the company’s board]( on Friday evening. I was glued to the updates rolling out over the weekend, which was nothing short of a Netflix drama of a boardroom tussle. The story is still unfolding - the last update at the time of writing was how Altman and OpenAI co-founder and former president Greg Brockman [has joined Microsoft]( to head their new advanced AI research team. Moreover, [Twitch co-founder Emmett Shear]( has been appointed as OpenAI's interim CEO. Altman had [investors and even key employees in his corner]( pushing the board for his return to OpenAI. But on Monday, it was revealed that talks between the company and him broke down. This leaves many questions about how this decision by the board members will impact the company and whether this board will remain - there were reports that some board members [were considering resigning](. However, the key question in my mind is whether this was just a play for power between Altman and Ilya Sutskever, OpenAI co-founder and board member, or if there are concerns about the company that we need to be worried about. After all, the firm said that Altman “was not consistently candid in his communications with the board.” Brad Lightcap, OpenAI’s COO, mentioned in a note to employees that the board’s decision had [nothing to do with safety or security practices](. That said, earlier this month, Microsoft [temporarily restricted employees from accessing ChatGPT]( due to security concerns. It’s definitely not reassuring when your own investor blocks your platform for security reasons. It seems that there are also growing concerns within OpenAI, specifically with Sutskever and its independent board, of the direction of the firm. Unlike other company boards that are driven by the interests of investors, OpenAI’s board also consists of people who were keen on the company taking a [cautious approach]( to developing AI. OpenAI was founded by Altman, Sutskever, Elon Musk, and Greg Brockman as a non-profit lab with an aim to build [artificial general intelligence](. In 2018, it became a for-profit company when it raised US$1 billion from Microsoft. Ironically, the firm that didn’t want to turn into one of the big tech companies driven by commercial incentives ultimately did, as it needed the money to build the technology powering its products. But that’s not all. In September this year, Altman was reportedly in talks with investors in the Middle East and even with SoftBank to raise more money to build OpenAI’s hardware capabilities. The company was also exploring making its [own AI chips](. This reminds me of WhatsApp’s founders [who hate advertising]( and now see their platform being turned by Facebook into a gateway for brands to sell more things you don’t need. I can see why this would rub some people the wrong way, as it looks like Altman was throwing caution to the wind and looking to win the AI race by building more powerful systems as quickly as possible. Though it would be ideal to have people on both sides of the aisle - those who believe AI advances humanity and others who believe it will destroy us - in dealing with something that could be a potential threat, I find that Silicon Valley’s approach of breaking things first and fixing it later will prevail. With Altman, Brockman, and other OpenAI employees joining Microsoft, it appears they will have “no obstructions” in building even more powerful AI systems as the tech giant [laid off its AI ethics team]( earlier this year. – Collin  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the emerging tech scene [here](. 1️⃣ [From shrimp to chic]( TômTex, which makes textiles from seafood and mushroom, raised a US$4.2 million seed round led by Happiness Capital. It aims to provide a more sustainable alternative to animal and plastic-based leathers. 2️⃣ [HSBC x Antler]( The two firms have announced a partnership to offer startups access to HSBC's financial expertise and banking solutions. 3️⃣ [Crypto green light]( Stablecoin issuer StraitsX has secured in-principle approval from the Monetary Authority of Singapore for its major payment institution license in the country. 4️⃣ [Wize funding route]( Wize, a Dubai-based logistics startup, has raised US$16 million in pre-seed funding. The firm says it is the first company to install battery-swapping stations in the United Arab Emirates. 5️⃣ [Market meltdown]( According to a report by AC Ventures and Bain & Company, Indonesian startups are projected to raise up to 80% less funding from VC firms in 2023 compared to the previous year.  --------------------------------------------------------------- FYI 1️⃣ [Flash Coffee defends Singapore exit, says regional biz in good shape]( When the coffee chain ended its Singapore operations via voluntary liquidation in October, doubts were cast about the health of its entire business. 2️⃣ [Hot or not: What SEA investors are betting on and what they're ignoring]( VC funding can be a leading indicator of where in the tech industry we’re going to see more spending and hiring. 3️⃣ [17Live, Singapore’s first SPAC target, shrinks revenue as price of profit rises]( The livestreaming firm already has plans in place to reverse the drop in revenue, which involves a heightened focus on its VTuber platform V-Liver.  --------------------------------------------------------------- That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. See you soon! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894