OpenAI Drama Goes Big Over the Weekend, Microsoft Wins
The weekend’s OpenAI drama continues, with Microsoft emerging the winner. Plus, cloud news from the FTC, Alibaba, Synergy and SoftwareOne.
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Sam Altman, the former CEO of OpenAI, has found a new job at Microsoft — OpenAI’s biggest investor.
Altman was suddenly ousted from his OpenAI role on Nov. 17 (the board later rethought its decision, creating a flurry of chaos). The company’s board determined it had lost confidence in Altman’s leadership and communications. Altman briefly was replaced by Mura Murati, but she has now resumed her work as OpenAI’s chief technology officer. Instead, Emmett Shear, who left as CEO of Amazon’s streaming service Twitch in March, has stepped in as interim CEO, according to CNN.
“I took this job because I believe that OpenAI is one of the most important companies currently in existence,” Shear wrote on X, formerly Twitter, on Nov. 20. “When the board shared the situation and asked me to take the role, I did not make the decision lightly.”
At the same time, Greg Brockman, another OpenAI co-founder, also is joining Microsoft. He had quit as OpenAI president after Altman was fired.
“[W]e’re extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team,” Microsoft CEO Satya Nadella wrote on X, formerly known as Twitter, on Nov. 20.
On the next slide, find out what Nadella had to say to Altman, specifically.
Speaking to Altman, specifically, Nadella wrote on X: “I’m super excited to have you join as CEO of this new group, Sam, setting a new pace for innovation.”
Microsoft remains OpenAI’s biggest investor, having infused the company so far with $13 billion. The software giant’s stock briefly hit an all-time high on Nov. 20 after the Altman news broke.
OpenAI, of course, started the generative AI craze with the public release of ChatGPT a year ago. What happens next with generative AI remains anyone’s guess.
“We’re entering the next chapter of AI, where we see what organizations will pull ahead as the leaders in innovation and who will fade out like Blackberries in the wake of the iPhone,” said Alon Yamin, co-founder and CEO of Copyleaks, an AI-powered plagiarism checker. “This next year will be interesting, to say the very least.”
Intrigue over the progression of cloud computing technologies continues on the next slide. Hint: The U.S. federal government has its own thoughts on cloud and generative AI.
The U.S. Federal Trade Commission has released its takeaways from the public comments it gathered this year about cloud computing providers’ market power.
Recall that the agency said in March it would collect opinions through mid-May. We now have some insight into those findings.
Here are the key themes the FTC noted on Nov. 16:
Software Licensing Practices: “[S]ome submissions argued that certain cloud providers have practices related to licensing software that limit the ability to use certain software in other cloud infrastructure providers’ environments, particularly when a company is moving existing on-premises workloads to the cloud,” staff wrote.
Egress Fees: “A number of submissions raised concerns about the fees paid by cloud customers to transfer their data out of (and within) certain cloud environments. According to some commenters, these egress fees could have the effect of discouraging customers from using multiple cloud providers or switching from one provider to another,” the FTC noted.
Minimum Spend Contracts: “Some RFI submissions argued that certain provisions in cloud computing contracts incentivize customers to consolidate their use of cloud services to just one cloud provider. … Some commenters argued that these types of provisions act as a lock-in mechanism, and that customers are pushed to use just one cloud provider for all the services the customer needs — even if other providers offer certain superior services,” according to the FTC.
Single Points of Failure: “A number of submissions raised concerns about the widespread reliance on a small number of cloud providers — arguing that outages, or other issues that degrade the service of a cloud provider, could have a cascading impact on the economy or specific sectors,” the FTC wrote.
Security: “[A] number of commenters argued there is a great deal of room for improvement in cloud security; that default security configurations could be better; and that the ‘shared responsibility’ model for cloud security often lacks clarity, which can lead to situations where neither the cloud provider nor the cloud customer implements necessary safeguards,” per the FTC.
Generative AI and Cloud: “Generative AI products are heavily reliant on cloud providers,” the FTC said. “Some argue that cloud credits as a form of investment— in which investors provide money that can only be spent on their cloud services — could lead to vendor lock-in. The FTC is paying close attention to the development of generative AI markets, and recently wrote on the topic of generative AI and potential competition concerns.”
As for next steps, the FTC said it will continue to keep an eye on, and support inquiries into, the following:
Any signs that cloud markets or certain business practices are inhibiting competition.
Understanding whether cloud providers are creating “sufficiently secure” systems.
Understanding whether the free market will, on its own, create “resilient systems,” or whether the government will need to intervene to avoid single points of failure.
Watching how cloud providers respond to a limited supply of specialized AI chips.
Up next, a big “in case you missed it” update.
China’s Alibaba, a major competitor to Amazon, has put a stop to plans to spin off its cloud business.
In May, the company said it would turn its Cloud Intelligence Group into a separate public company.
That is not to be.
On Nov. 17, news broke that Alibaba has changed its mind, citing recent U.S. controls on chip exports. Alibaba’s cloud group competes against Amazon Web Services and Microsoft Azure — when it has access to the same resources, apparently.
The company lost more than $21 billion in its market cap valuations as a result of the pullback.
Earlier this year, financial analysts had estimated that a separate Cloud Intelligence Group could be worth between $41 billion and $60 billion, Reuters reported.
Next, find out just how much AI contributed to recent cloud earnings.
The AI craze of 2023 is no joke, and, apparently, no flash in the pan.
Synergy Research Group says generative AI technology and services helped ramp up enterprises’ third-quarter spending on cloud infrastructure services. The total exceeded that of the same period a year ago, jumping by $10.5 billion, to more than $68 billion.
“The current economic and political climate has crimped some growth in cloud spending, but there is clear evidence that generative AI technology and services are starting to help overcome those barriers,” analysts wrote in late October.
They added that while the “law of large numbers” still is putting downward pressure on cloud market growth rates, AI is delivering a boost.
“Helped by AI, there are signs that many enterprises are through their period of belt-tightening and of optimizing rather than growing their cloud operations,” analysts noted. “AI is helping to open up a wide range of new cloud workloads.”
But who’s going to handle those cloud workloads? That’s the question global organizations are asking, according to new stats.
Nearly all organizations around the world are struggling to find people with cloud computing skills.
That’s according to a new report from SoftwareOne, which sells through the channel.
As a result of the shortage (which affects 98% of survey respondents), digital transformation projects are falling behind by an average of five months. On top of that, one-third of businesses say their financial objectives will take a significant hit, SoftwareOne said.
But all of that points to big opportunity for channel partners. Respondents told SoftwareOne that investing in cloud managed services over the next year could increase their productivity by as much as 156%.
“Our research into the cloud skills gap shows how much is at stake,” said Craig Thomson, senior vice president, cloud and application services, at SoftwareOne. “The majority of organizations see cloud managed services as a crucial way to bridge the gap, with the option of scaling back these resources as they build their own internal capabilities for the future.”
That will prove critical to help end users avoid the problems they’re facing now, including remaining up to date with security an compliance. Almost half — 43% — of respondents said they struggle with this area. Another 41% report application performance issues and outages, while 38% have missed KPIs on delivering new innovations to the business. One-third even said they had to restrict their use of the cloud altogether.
“For companies who want to accelerate their digital transformation, closing the cloud skills gap is critical,” Thompson added.
SoftwareOne’s Cloud Skills Survey polled 500 IT decision-makers from the UK, Benelux, North America and Australia.
Nearly all organizations around the world are struggling to find people with cloud computing skills.
That’s according to a new report from SoftwareOne, which sells through the channel.
As a result of the shortage (which affects 98% of survey respondents), digital transformation projects are falling behind by an average of five months. On top of that, one-third of businesses say their financial objectives will take a significant hit, SoftwareOne said.
But all of that points to big opportunity for channel partners. Respondents told SoftwareOne that investing in cloud managed services over the next year could increase their productivity by as much as 156%.
“Our research into the cloud skills gap shows how much is at stake,” said Craig Thomson, senior vice president, cloud and application services, at SoftwareOne. “The majority of organizations see cloud managed services as a crucial way to bridge the gap, with the option of scaling back these resources as they build their own internal capabilities for the future.”
That will prove critical to help end users avoid the problems they’re facing now, including remaining up to date with security an compliance. Almost half — 43% — of respondents said they struggle with this area. Another 41% report application performance issues and outages, while 38% have missed KPIs on delivering new innovations to the business. One-third even said they had to restrict their use of the cloud altogether.
“For companies who want to accelerate their digital transformation, closing the cloud skills gap is critical,” Thompson added.
SoftwareOne’s Cloud Skills Survey polled 500 IT decision-makers from the UK, Benelux, North America and Australia.
It’s the week of Thanksgiving and you would think news would be a trickle in the cloud computing world, but that’s not the case. Let’s start with the OpenAI drama, since generative AI is driving a ton of activity in the channel sector.
If you missed Friday’s OpenAI drama, catch up with Buffy Naylor’s reporting here. So much happened over the weekend that we start this slideshow with the latest on the intrigue. For one thing, the CEO position has turned into a rendition of musical chairs after Sam Altman was pushed out. And Altman, along with at least one of his OpenAI colleagues, is set to lead a new AI era at Microsoft. The OpenAI drama continues.
But there’s more happening in cloud, even though much of it does revolve around AI.
Remember the U.S. Federal Trade Commission’s intent to explore whether cloud providers have too much market power? Well, the agency has released some findings and thoughts. We cover the latest coming out of the antitrust regulator.
After that, we have an update from China’s Alibaba about its intended cloud business spinoff. You’ll want to check this out.
Finally, we round out this early-in-the-holidays-week cloud computing news roundup with stats from Synergy Research Group and vendor SoftwareOne. The former calculated just how much the AI craze of 2023 contributed to cloud providers’ third-quarter earnings. And the latter just published a report pointing to the growing cloud skills gap. Find out which type of channel partner is poised to capitalize on the struggle.
Before we get into that, let’s launch with a look at the OpenAI drama.
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