Author: azeeadmin

OpenAI may not be quite so open going forward. The former nonprofit announced today that it is restructuring as a “capped-profit” company that cuts returns from investments past a certain point. But some worry that this move — or rather the way they made it — may result in making the innovative company no different from the other AI startups out there.

From now on, profits from any investment in the OpenAI LP (limited partnership, not limited profit) will be passed on to an overarching nonprofit company, which will disburse them as it sees fit. Profits in excess of a 100x return, that is.

In simplified terms, if you invested $10 million today, the profit cap will come into play only after that $10 million has generated $1 billion in returns. You can see why some people are concerned that this structure is “limited” in name only.

In a blog post, OpenAI explained the rationale behind its decision.

We’ll need to invest billions of dollars in upcoming years into large-scale cloud compute, attracting and retaining talented people, and building AI supercomputers.

We want to increase our ability to raise capital while still serving our mission, and no pre-existing legal structure we know of strikes the right balance. Our solution is to create OpenAI LP as a hybrid of a for-profit and nonprofit—which we are calling a “capped-profit” company.

Essentially, the company is admitting that it was unlikely to raise the money necessary to achieve its goals while operating as a nonprofit — which, as you can imagine, investors see no immediate returns on. (Although it’s possible to make money on spinoffs and other sub-businesses, putting money into a nonprofit isn’t really a lucrative move.)

Less money wouldn’t be as big a problem if OpenAI were not competing with the likes of Google and Amazon for specialists in artificial intelligence, cloud computing, and so on. The cost of development is also quite high.

This of course was also true (though perhaps less acute) in 2015 when OpenAI was started. Yet as the founders wrote then:

Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return. Since our research is free from financial obligations, we can better focus on a positive human impact.

That doesn’t leave a lot of room for interpretation!

But having said that, OpenAI isn’t the first nonprofit to stumble on the money issue; the simple fact is that it’s hard to outspend global megacorps in a field where success is at least partly determined by budget. And in a way, perhaps they reasoned, isn’t being profitable in a way being “free from financial obligations?” Think about it.

The new structure has OpenAI LP doing the actual work the company is known for: doing interesting and perhaps widely applicable AI research, occasionally withheld in order to save the world.

But the LP will be “governed” (I’ve inquired about the exact meaning of this word in this context) by OpenAI Inc, AKA OpenAI Nonprofit. Profits emerging from the LP in excess of the 100x multiplier go to the nonprofit, which will use it to run educational programs and advocacy work.

The company justifies this rather high profit “cap” by saying that if it succeeds in creating a working artificial general intelligence (AGI is a poorly defined concept that is nonetheless perhaps the holy grail of current AI research), “we expect to generate orders of magnitude more value than we’d owe to people who invest in or work at OpenAI LP.”

Whether these are the words of confidence workers, or merely confident ones, is pretty much entirely a matter of opinion. AGI is nowhere near being achieved or the idea even properly understood, as any researcher will tell you, but if it can be achieved it is far more likely be done by people on the leading edge who have access to large budgets and enormous computing resources.

As chief scientist Ilya Sutskever put it in a Reddit comment moments ago: “There is no way of staying at the cutting edge of AI research, let alone building AGI, without us massively increasing our compute investment.” Whatever AGI is, it won’t come cheap.

All the same, the 100x number seems like rather a large jump. Many of the same goals might have been achieved with a 10x or 20x multiplier, which would allow for huge returns without near-term profits appearing to be unlimited in practice. Future rounds will in fact be offered at a smaller multiplier; this one is meant to be a carrot for investors willing to tolerate a bit more risk.

But it has rubbed some the wrong way, and it’s easy to understand grumbling that the company that not long ago said it wanted to be “unconstrained by a need to generate financial return” will now make decisions very much informed by that need. How does that differ from the megacorps with which OpenAI has attempted to contrast itself?

The CEO of the whole shebang is Sam Altman, who stepped down as chairman at Y Combinator just days ago, leading speculation that he was upping his involvement in another concern; now we know which.

Policy director for OpenAI (though for which, who can say?) Jack Clark explained in a bit more detail in an email to TechCrunch.

“In practice, You should think about OpenAI as being led on research and technology by Ilya Sutskever (chief scientist) and Greg Brockman (CTO), with Sam helping out on other aspects of management,” he wrote. “We’ve all been working together for a while, so this isn’t much of a shift internally.”

The board consists of OpenAI’s Brockman, Sutskever, and Altman, original investor but non-employee Reid Hoffman, as well as Adam D’Angelo, Holden Karnofsky, Reid Hoffman, Sue Yoon, and Tasha McCauley. Notably Elon Musk isn’t a part of it, though he was a big investor and proponent early on; He departed more than a year back on good terms.

The board is limited to a minority of financially-interested parties, and only non-interested members can vote on “decisions where the interests of limited partners and OpenAI Nonprofit’s mission may conflict,” the announcement noted. So theoretically the keys to the safe are in the hands of those who have no incentive to rifle it. Clark noted that “we’ve been talking to everyone involved for more than a year about this, so everyone was aware.”

OpenAI LP, which we will likely end up just calling OpenAI, will continue its work uninterrupted, it says, even “at increased pace and scale.” So you can expect important papers and work like it has published before, though from now on you will be much more justified in attributing a profit motive to it.

Alphabet’s self-driving vehicle subsidiary Waymo may raise outside capital for the first time at a valuation “at least several times” that of Cruise, the General Motors-owned autonomous vehicle business worth nearly $15 billion, according to a report published by The Information on Monday.

We’ve reached out to our sources to confirm. Waymo didn’t immediately respond to a request for comment.

Waymo, which is currently celebrating its 10-year anniversary, is a cash-intensive unit. Raising capital from outside investors, a move said to be encouraged by chief financial officer Ruth Porat, would help limit costs and would allow Alphabet the opportunity to display Waymo’s valuation for the first time in several years. Alphabet, however, does not want to relinquish too much equity in the business, formerly known as “Project Chauffeur,” per The Information’s reporting.

Waymo, years ago, was valued at $4.5 billion, though analysts claim it could surpass a valuation as high as $175 billion based on future revenue estimates. For context, a valuation north of $100 billion puts Waymo significantly ahead of Uber, Tesla, GM and Ford.

Google, currently touting an $817 billion market cap, can afford to support Waymo. This, however, is not the search engine’s first time seeking third-party investors for its very own moonshot bets rather than continuing to deploy solely its own capital to the businesses. Both Verily, a Google-owned life sciences research and engineering organization, and Makani, a wind energy business also spun out of Google X, have sold equity to Silver Lake and Shell, respectively.

Cruise, for its part, has similarly sought outside capital since being acquired by GM in 2016 for $581 million. In mid-2018, The Vision Fund invested $2.25 billion in Cruise, giving SoftBank a nearly 20 percent stake in GM’s self-driving business.

Waymo became a standalone business in 2016 and is today managed by chief executive officer John Krafcik, Porat and chief technology officer Dmitri Dolgov. The company made headlines late last year when it launched Waymo One, a commercial robotaxi service in the Phoenix area — its first profitable endeavor. More recently, Waymo announced it would sell its custom light detection and ranging sensors, or LiDAR, to companies outside the self-driving car industry in another move toward profitability.

According to estimates, Waymo could book $114 billion in revenue in 2030.

Tesla is using more than $13 million worth of stock to buy trucks and trailers that will transport its electric vehicles to customers, the latest effort by the automaker to improve its logistics and delivery services.

Instead of using cash, Tesla  issued $13.8 million in stock, a new securities filing posted Monday shows. Tesla used 49,967 shares at a maximum price of $277.05 a share as of Feb. 12 to buy the trailers from Central Valley Auto Transport.

The California-based company specializes in car carriers. Tesla’s statement within the securities filing:

As part of Tesla’s ongoing logistics strategy to increase its vehicle transport capacity, reduce vehicle transportation time, and improve the timeliness of scheduled deliveries, Tesla agreed to issue shares of Tesla’s common stock in connection with its acquisition of certain car-hauling trucks and trailers from Central Valley Auto Transport, Inc. (“Central Valley” or the “selling stockholder”), an automotive transport provider. We are registering these Tesla shares pursuant to registration rights granted to the selling stockholder in connection with the acquisition.

In November, Tesla CEO Elon Musk tweeted that the electric automaker had “acquired trucking capacity,” a move aimed to boost deliveries of its Model 3 vehicles before the federal tax credit begins to wind down December 31. Musk nor the company revealed more details. The company never posted any regulatory filings of an acquisition.

Musk later tweeted that Tesla had both purchased trucking companies and secured contracts with major haulers to “avoid trucking shortage mistakes of last quarter.”

It’s not clear if this latest purchase from Central Valley Auto Transport reflects actions that Tesla took last year or if this is additional capacity. Tesla did note in its fourth-quarter shareholder letter that it is “continuing to purchase our own car-hauling truck capacity for vehicle shipments.”

Google paid a total of $105 million to Andy Rubin and Amit Singhal after they were accused of sexual harassment at the company, the Wall Street Journal first reported. This confirms the New York Times report that Google paid $90 million to Rubin and reveals Google also paid $15 million to Singhal, who left Uber after it was revealed that he did not disclose the sexual harassment allegation.

The suit, filed by shareholder James Martin, confirms the board of directors approved a $90 million exit package for Rubin “as a goodbye present to him. No mention, of course, was made about the true reason for Rubin’s ‘resignation’ — his egregious sexual harassment while at Google.”

The suit goes on to describe how Singhal “was allowed to quietly resign at Google in 2016 in the wake of credible allegations of sexual harassment, and was paid millions in severance.”

In since unsealed documents, citing documents provided by Google, the suit reveals Google agreed to pay $45 million to Singhal, but ended up paying just $15 million since he went to work for a competitor. Google initially agreed to pay Singhal annual cash payments of $15 million, to be paid 12 months and then 24 months after his exit. Google offered an additional maximum of $15 million to be paid 36 months after his exit, contingent upon him not joining a competitor.

“Because Google’s Board concealed the reasons for Singhal’s departure, he found another lucrative job,” the suit states.

Singhal was a senior vice president of search before he resigned from Google in Feb. 2016. At the time, Singhal framed his resignation as a retirement, but the retirement lasted less than a year — Singhal joined Uber in January 2017 January. A month later, then Uber-CEO Travis Kalanick asked Singhal to resign after discovering Singhal did not disclose the sexual harassment investigation at Google. In an email to Bloomberg, Singhal wrote, “harassment is unacceptable in any setting” and that he wants “everyone to know that I do not condone and have not committed such behavior. In my 20-year career, I’ve never been accused of anything like this before, and the decision to leave Google was my own.”

In November 2018, Google said 48 people have been terminated for sexual harassment, including 13 who were senior managers and above. At the time, Google said none of those individuals had received an exit package. In a statement to TechCrunch today, a Google spokesperson said:

There are serious consequences for anyone who behaves inappropriately at Google. In recent years, we’ve made many changes to our workplace and taken an increasingly hard line on inappropriate conduct by people in positions of authority.”

The case is 19CV343672 | Martin v. Page, et al. (Alphabet Inc., located in the Superior Court of Santa Clara. Scribd is processing the file now. It’ll appear below once it’s ready.

Google paid a total of $105 million to Andy Rubin and Amit Singhal after they were accused of sexual harassment at the company, the Wall Street Journal first reported. This confirms the New York Times report that Google paid $90 million to Rubin and reveals Google also paid $15 million to Singhal, who left Uber after it was revealed that he did not disclose the sexual harassment allegation.

The suit, filed by shareholder James Martin, confirms the board of directors approved a $90 million exit package for Rubin “as a goodbye present to him. No mention, of course, was made about the true reason for Rubin’s ‘resignation’ — his egregious sexual harassment while at Google.”

The suit goes on to describe how Singhal “was allowed to quietly resign at Google in 2016 in the wake of credible allegations of sexual harassment, and was paid millions in severance.”

In since unsealed documents, citing documents provided by Google, the suit reveals Google agreed to pay $45 million to Singhal, but ended up paying just $15 million since he went to work for a competitor. Google initially agreed to pay Singhal annual cash payments of $15 million, to be paid 12 months and then 24 months after his exit. Google offered an additional maximum of $15 million to be paid 36 months after his exit, contingent upon him not joining a competitor.

“Because Google’s Board concealed the reasons for Singhal’s departure, he found another lucrative job,” the suit states.

Singhal was a senior vice president of search before he resigned from Google in Feb. 2016. At the time, Singhal framed his resignation as a retirement, but the retirement lasted less than a year — Singhal joined Uber in January 2017 January. A month later, then Uber-CEO Travis Kalanick asked Singhal to resign after discovering Singhal did not disclose the sexual harassment investigation at Google. In an email to Bloomberg, Singhal wrote, “harassment is unacceptable in any setting” and that he wants “everyone to know that I do not condone and have not committed such behavior. In my 20-year career, I’ve never been accused of anything like this before, and the decision to leave Google was my own.”

In November 2018, Google said 48 people have been terminated for sexual harassment, including 13 who were senior managers and above. At the time, Google said none of those individuals had received an exit package. In a statement to TechCrunch today, a Google spokesperson said:

There are serious consequences for anyone who behaves inappropriately at Google. In recent years, we’ve made many changes to our workplace and taken an increasingly hard line on inappropriate conduct by people in positions of authority.”

The case is 19CV343672 | Martin v. Page, et al. (Alphabet Inc., located in the Superior Court of Santa Clara. Scribd is processing the file now. It’ll appear below once it’s ready.

Taika Waititi, the comedic filmmaker best known for directing “Thor: Ragnarok,” has signed on to co-write and direct the pilot of a “Time Bandits” series currently in development for Apple.

The series is being co-produced by Anonymous Content, Paramount Television and Media Rights Capital. Deadline broke the news of Waititi’s involvement.

The “Time Bandits” series was first announced last year. It’s based on the cult classic Terry Gilliam film of the same name, which follows a young boy who tags along with a group of dwarfs as they jump through space and time, hoping to get rich and encountering a long list of famous semi-historical figures (Sean Connery as Agamemnnon! John Cleese as Robin Hood!) in the process

This is one of a number of projects that Waititi has coming out this year — he’s also an executive producer on the FX adaptation of “What We Do In The Shadows” (the vampire comedy he wrote, directed and starred in with Jemaine Clement), a director on “The Mandalorian” (the live action Star Wars series for Disney+) and his next film “Jojo Rabbit” is due for release this fall.

And while we’ve been reporting for more than a year on all the movies and shows Apple has been commissioning, we may finally, finally get the first official details on the company’s streaming plans at an event on March 25.

GM Cruise plans to hire 1,000 more engineers over the next nine months, TechCrunch has learned. It’s an aggressive move by the autonomous vehicle technology company to double its size as it pushes to deploy a robotaxi service by the end of the year. Arden Hoffman, who helped scale Dropbox, will leave the file-sharing and storage company to head up human resources at Cruise.

The GM subsidiary is expanding its office space in San Francisco to accommodate the growth. GM Cruise will keep its headquarters at 1201 Bryant Street in San Francisco. The company will also take over Dropbox headquarters at 333 Brannan Street some time this year, a move that will triple Cruise’s office space in San Francisco.

“Arden has made a huge impact on Dropbox over the last four years. She helped build and scale our team and culture to the over 2300 person company we are today, and we‘ll miss her leadership, determination, and sense of humor. While we’re sorry to see her go, we’re excited for her and wish her all the best in this new opportunity to grow the team at Cruise,” a Dropbox spokesperson said in an emailed statement. 

Prior to joining Dropbox, Hoffman was human resources director at Google for three years.

The planned expansion and hiring of Hoffman follows a recent executive reshuffling. GM president Dan Ammann left the automaker in December and became CEO of Cruise. Ammann had been president of GM since 2014, and he was a central figure in the automaker’s 2016 acquisition of Cruise and its integration with GM.

Kyle Vogt,  a Cruise co-founder who was CEO and also unofficially handled the chief technology officer position, is now president and CTO.

Cruise has grown from a small startup with 40 employees to more than 1,000 today at its San Francisco headquarters. It has expanded to Seattle, as well, in pursuit of talent. Cruise announced plans in November to open an office in Seattle and staff it with up to 200 engineers. And with the recent investments by SoftBank and Honda, which has pushed Cruise’s valuation to $14.6 billion, it has the runway to double its staff.

The hunt for qualified people with backgrounds in software engineering, robotics and AI has heated up as companies race to develop and deploy autonomous vehicles. There are more than 60 companies that have permits from the California Department of Motor Vehicles to test autonomous vehicles in the state.

Competition over talent has led to generous, even outrageous, compensation packages and poaching of people with specific skills.

Cruise’s announcement puts more pressure on that ever-tightening pool of talent. Cruise has something that many other autonomous vehicle technology companies don’t — ready amounts of capital. In May, Cruise received a $2.25 billion investment by SoftBank’s vision fund. Honda also committed $2.75 billion as part of an exclusive agreement with GM and Cruise to develop and produce a new kind of autonomous vehicle.

As part of that agreement, Honda will invest $2 billion into the effort over the next 12 years. Honda also is making an immediate and direct equity investment of $750 million into Cruise.

Cruise will likely pursue a dual path of traditional recruitment and acquisitions to hit that 1,000-engineer mark. It’s a strategy Cruise is already pursuing. Last year, Cruise acquired Zippy.ai, which develops robots for last-mile grocery and package delivery, for an undisclosed amount of money. The deal was more of an acqui-hire and did not include any of Zippy’s product or intellectual property. Instead, it seems Cruise was more interested in the skill sets of the co-founders, Gabe Sibley, Alex Flint and Chris Broaddus, and their team.

In 2017, Cruise also acquired Strobe,  a LiDAR sensor maker. At the time, Cruise said Strobe would help it reduce by nearly 100 percent the cost of LiDAR on a per-vehicle basis.

One of the last top-tier venture firms to resist coming to San Francisco has apparently decided that it’s time to make the move. According to a source familiar with the thinking of Andreessen Horowitz, the firm is opening up a San Francisco office later this year.

The WSJ had reported on Friday that the firm has signed a leasing agreement to move into 180 Townsend Street in the city’s China Basin neighborhood, not far from where the San Francisco Giants play baseball. (The park was known until January as AT&T Park; it has since been renamed Oracle Park.)

Our source says that the firm will not be shuttering its expansive offices on Sand Hill Road, where it set up shop immediately after opening up for business in 2009. This person adds that a16z, as the firm is known, doesn’t plan to rent out an entire building. (Worth noting: 180 Townsend features more than 41,000 square feet.)

The move is notable, even amid a years-long trend of Silicon Valley venture capital firms that have opened offices in San Francisco and, in doing so, shifting the industry’s center of gravity 45 minutes north.

True Ventures was among the earliest venture firms to come to the city, originally setting up operations along the city’s waterfront and later moving its office to the popular South Park neighborhood, which is also now home to Kleiner Perkins, Accel, General Catalyst, and New Enterprise Associates, among others.

Firms have also turned the city’s Jackson Square neighborhood, roughly 1.5 miles away, on the other side of San Francisco’s financial district. Among those tenants: Jackson Square Ventures, NextWorld Capital, Catamount Ventures, and Sway Ventures.

Andreessen Horowitz has long seemed happy to exclusively operate out of Menlo Park, not opening another regional office, and not entertaining the idea of opening a New York office, even as many of its peers were doing so years ago.

Our source says the firm began thinking more seriously about opening a second space in San Francisco at least a year ago before more recently deciding to pull the trigger. Undoubtedly, it will ease a long commute for some of its 150 employees, many of whom live in the city and will be dividing their time between both offices once its San Francisco location opens.

Clearly, the firm also wants to get closer to the founders it works with — and wants to work with — many of whom also prefer San Francisco to sleepier, if less crowded, parts south.

Leasing commercial space in San Francisco is as pricey as it has even been. As the WSJ noted, citing data from the real estate group Cushman & Wakefield, office rent in San Francisco reached a record  $75.57 per square foot in the fourth quarter of 2018, up 6.4 percent from the same period in 2017.

In addition to Andreessen Horowitz, Y Combinator looks likely to move to San Francisco this year; as we reported last week, the investment firm and accelerator program is currently searching for the right space to set up shop.

Apple sent out invites to reporters this afternoon for a March 25 special event at the Steve Jobs Theater in Cupertino.

Reports have suggested that the company will focus its keynote on the content side of its business. The invite offers some key hints that the video content service will be on full display at the invite, mainly a film reel countdown timer that eventually reveals the phrase “It’s show time.”

Apple has been seeding a ton of TV shows and delivering plenty of announcements about the content that it has in the pipeline, but we’ve strangely heard quite little about the underlying platform or subscription that Apple has planned beyond media reports.

 

 

When you love anything and everything related to robots and artificial intelligence, the only thing better than going to TechCrunch Sessions: Robotics + AI is saving $100 on the price of admission. But our $249 early-bird price flies the proverbial coop in just four days, on March 15, so buy your ticket now and keep that Benjamin in your wallet where it belongs.

Our day-long immersive program — which takes place at UC Berkeley’s Zellerbach Hall on April 18 — includes robot demos, workshops and interviews with the leading founders, investors, researchers and technologists in the field. We expect more than 1,000 attendees, which makes TC Sessions: Robotics + AI an outstanding opportunity to learn, share, network and build community.

What kind of programming can you expect? Excellent question. For starters, Alexei Efros from UC Berkeley and Hany Farid from Dartmouth College will address a crucial issue at the crossroads of artificial intelligence, reality and public trust. Don’t miss their presentation entitled, “This Reality Does Not Exist: Trust in an Age of Synthetic Media.”

If you love drones, you’ll love the conversation with DroneSeed’s Grant Canary, Aria Insights’ Laura Major and DJI’s Arnaud Thiercelin. They’ll discuss how people are using drones to stop poachers, deliver packages and inspect pipelines. They’ll also drone on — pun totally intended — about what’s coming next.

Come prepared for our investor Q&A session with Peter Barrett (Playground Global), Hidetaka Aoki (Global Brain) and Helen Liang (FoundersX Ventures). This is your chance to ask questions of some of the greatest investors in robotics and AI.

We’ve packed a lot of programming into our agenda, and we’ll be announcing special guests and adding a few more names to our schedule over the next few weeks. Be sure to check back for updates.

If you really want to make an impression and place your early-stage startup in front of the top influencers in robotics and AI, why not buy a demo table? Bring your posse, because the price includes three attendee passes.

TechCrunch Sessions: Robotics + AI takes place at UC Berkeley’s Zellerbach Hall on April 18, 2019. Student tickets cost a mere $45. As for the rest of you, don’t delay. You have only four days left to buy an early-bird ticket and save $100. Go get ‘er done!