OpenAI drama, billion-dollar exits, and founder salaries with new co-host Alex Wilhelm | E1953

Alex Wilhelm joins Jason to dive into this week’s news. (00:00:00)

• OpenAI has been a constant source of drama in the tech industry.
• Vanta, LinkedIn, and Equinex are sponsors for this week's podcast.

Announcing new co-host on TWiST Alex Wilhelm of TechCrunch fame! (00:01:17)

• Alex Wilhelm joins the podcast as a co-host alongside Jason.
• Alex has been a frequent guest on the show and has extensive experience in the tech industry.
• Alex and Jason have a great rapport and will bring a unique dynamic to the podcast.
• The podcast will air twice a week, with live episodes where listeners can ask questions.

Alex breaks down what’s on the docket for today! (00:03:03)

• Today's topics include:
  • OpenAI equity clawbacks
  • AI revenue (consumer and enterprise)
  • Consolidation in cybersecurity
  • Founder salaries
  • Venture interest in crypto
  • NVIDIA earnings
• OpenAI equity clawbacks:
  • Discussion on the recent controversy surrounding OpenAI's equity clawback policy.
• AI Revenue:
  • Consumer side: Data and analysis of consumer-side AI revenue.
  • Enterprise side: Discussion on the state of AI revenue in the enterprise sector.
• Consolidation in cybersecurity:
  • Analysis of the recent trend of consolidation in the cybersecurity industry.
• Founder salaries:
  • Discussion on how much founders are paying themselves and what is considered reasonable.
• Venture interest in crypto:
  • Overview of the current state of venture interest in cryptocurrency.
• NVIDIA earnings:
  • Preview of the upcoming NVIDIA earnings report and its significance.

The OpenAI equity issue. (00:04:16)

• OpenAI, a non-profit organization valued at $80-90 billion, has faced public scrutiny due to ongoing drama, including the firing and rehiring of Sam Altman.
• Recent exits from OpenAI's "super alignment team" have drawn attention because of clauses in their exit deals that allow the company to claw back vested equity if the departing employees engage in disparagement.
• This practice is not uncommon in the tech industry and is often reciprocal, with both parties agreeing not to disparage each other in exchange for benefits.
• The case of OpenAI has garnered attention due to its history of controversies and the involvement of an employee in safety and security, raising concerns about potential censorship or suppression of important discussions.
• Despite the existence of such clauses, instances of companies actually clawing back vested equity are rare, typically involving cases of fraud or criminal behavior.
• Thrive Capital facilitated a secondary sale, allowing OpenAI's 500 employees to sell their equity, which amounts to a significant sum of money since they own 20-30% of the company's value.

Vanta - Get $1000 off your SOC 2 (00:10:38)

• Vanta helps B2B startups get and renew their SOC 2 compliance quickly and easily.
• Vanta can save companies hundreds of hours of work and up to 85% on compliance costs.
• Vanta automates up to 90% compliance for GDPR, HIPAA, and more.
• Jason talked about OpenAI's revenue on All-In and this podcast.
• The host has played with GPT-4.

OpenAI’s ChatGPT 4 (00:12:39)

• ChatGPT 4's user interface is improving.
• Consumers are starting to see the use case for AI language models and are willing to pay for it.
• The key issue is whether users will continue to subscribe to AI language models or if they will churn.
• The speaker personally subscribes to multiple AI language models but is now considering which ones are essential and which ones can be replaced by the free versions.
• The speaker is excited about the spoken word element of ChatGPT 4 and believes it would have been considered impossible just a few years ago.

Why ChatGPT is better than Siri. (00:15:33)

• ChatGPT is better than Siri because it can understand and converse with the user, which can accelerate their overall process.
• Microsoft's new co-pilot Plus PCs and potentially iPhones may integrate these capabilities in the future.
• The main problem with Siri and Alexa is the CB problem, where interruptions and delays make them less efficient than simply typing in the desired search.

OpenAI’s net revenue in the wake of last week’s announcements. (00:17:50)

• OpenAI's net revenue on the mobile side has increased significantly.
• Chat GPT mobile revenue rose from $491,000 to $900,000 per day.
• Consumers are willing to pay for the technology now, indicating strong product-market fit.
• Market pull is evident as people are actively seeking and demanding the technology.
• Market pull occurs when the market desires a product and actively requests it.
• iPhone serves as an example of compelling technology with strong market pull.
• The speaker personally finds the technology compelling and uses Chat GPT frequently.
• The speaker has set up a direct button on their phone to quickly access Chat GPT.
• OpenAI is facing drama and controversies.
• OpenAI's revenue is estimated to be around a million dollars per day, according to Appfigures.
• This does not include revenue from the Enterprise side, such as Enterprise chat GPT.
• OpenAI plans to launch a paid version of its personal chatbot, offering a launch address and access from the company.

Comparing the needs of consumers vs enterprise for ChatGPT. (00:22:06)

• Consumers are enthusiastic about AI tools like ChatGPT, with even non-tech savvy individuals finding it easy to use and beneficial.
• The enterprise side of AI adoption has mixed results, with some companies embracing it while others struggle to integrate it effectively.
• The shift from traditional office work without computers to the reliance on technology highlights the rapid advancements in technology.
• Tools like Grammarly demonstrate the significant improvements in writing assistance, making tasks like proofreading and editing more efficient.
• Grammarly's suggestions are generally accurate, but it may struggle with shorthand or informal language used in note-taking or podcasting.

OpenAI has pulled “Sky” one of the voices for the new ChatGPT 4o due to it sounding like Scarlett Johansson (00:24:17)

• OpenAI's voice model, "Sky," was not voiced by Scarlett Johansson as previously believed, raising potential legal concerns.
• Speechify, a text-to-speech tool, offers various voices, including impersonations of Barack Obama and Gwyneth Paltrow, with potential applications in research and productivity.
• The future of AI is seen as collaborative, with AI initially appearing limited but gradually becoming more sophisticated and influential, acting as co-workers.
• Concerns about AI's impact on society, such as deep fakes and its effects on developing economies and elections, are acknowledged.
• Despite these concerns, AI is viewed as a driving force of technological progress, offering new possibilities and addressing productivity challenges in a resource-limited world.
• Advancements in AI and globalization are making software businesses more efficient, allowing them to do more with fewer resources.
• This trend may lead to job displacement, necessitating the creation of new companies and innovative solutions to address global challenges.

Equinix - Join the Equinix Startup Program for up to $100K in credits and much more (00:28:48)

• Equinix offers a hybrid solution for startups that combines the benefits of cloud computing with direct access to physical servers.
• Equinix Metal provides on-demand infrastructure in over 25 major cities.
• The Equinix Startup Program offers personalized consultations, guidance, and up to $100,000 in startup credits.
• Interested startups can apply at equinex startups.com and will be contacted directly by James from Equinix.

Alex’s favorite topic around how much founders paying themselves. (00:30:01)

• Founders' salaries should prioritize the startup's growth and product development, with an optimal range of $5,000 to $10,000 per month in the early stages.
• For startups that have raised between $1 million and $2.9 million, the median founder salary is $125,000, while it increases to $194,000 for startups that have raised over $10 million.
• Globalization and remote work options have influenced founders' compensation strategies.
• Founders in Silicon Valley often have a lower burn rate due to factors such as not having children, being unmarried, and not having mortgages.
• The most successful founders are between 35 and 55 years of age.
• Founders' compensation should be tied to the company's performance after they are fully vested to align interests.
• Keeping a low burn rate reduces financial stress, maintains focus on running the business, and provides more financial freedom and a stronger negotiating position.
• The high cost of private education raises questions about the effectiveness of the current public school system, suggesting the need for a voucher system and increased competition to improve education quality and options.

A billion-dollar deal in cybersecurity. (00:38:46)

• CyberArk acquired vFI for $1.5 billion, representing a 10x ARR multiple and expanding its TAM by 10-20%.
• The acquired company has nearly 100% recurring revenue, indicating a high-quality software business with solid margins.
• The acquisition aims to create a unified platform for machine identity security at an enterprise scale.
• The cybersecurity industry is consolidating as major players acquire other companies to build broader and deeper platforms, avoiding the risk of being replaced as point solutions.
• Despite the lack of startups going from zero to IPO, there are still notable deals and lessons learned from these acquisitions.

Breaking news Scar Jo! (00:45:43)

• Scarlett Johansson declined an offer to voice OpenAI's chatbot, Chbt 4.0, due to personal reasons.
• Despite her refusal, OpenAI released a voice named Sky that sounded similar to Johansson's, causing confusion and anger.
• OpenAI's actions raise ethical concerns about using AI to create synthetic voices without consent, violating Johansson's right to her personality.
• Sam Altman, CEO of OpenAI, faces criticism for using Johansson's voice without her consent.
• Johansson is considering legal action against OpenAI for violating her right of publicity.
• The incident has damaged OpenAI's reputation and caused confusion among the public.
• OpenAI's recent announcement of 100 million ChatGPT users suggests they don't need additional publicity stunts.
• The speaker expresses concern about the lack of respect for content in the industry and highlights the potential legal consequences of using others' content without permission, particularly in the music industry, where rights holders like UMG and Sony can take legal action.

What’s going on with crypto-venture capital? (00:56:24)

• Crypto venture capital is making a comeback.
• $2.4 billion was invested in crypto companies in Q1 2023, up from $1.2 billion in Q4 2022.
• Coinbase is doing well and regulatory clarity is improving.
• Bitcoin is seen as a unique store of value due to its decentralized nature and ability to survive over time.
• Other use cases for blockchain technology and NFTs are still struggling to demonstrate sufficient value to justify their technical complexities.

A look at “decentralized twitter” called Farcaster. (00:58:02)

• Decentralized social media platforms like Farcaster aim to resist censorship, while tokenizing assets like houses can facilitate participation in the real estate market.
• Venture capitalists are increasingly interested in the blockchain and cryptocurrency space despite scams and questionable projects.
• Bitcoin has proven its resilience over 15 years, but its future, along with other digital assets, remains uncertain due to potential technological disruptions and societal changes.
• Discussions are underway to establish a clear regulatory framework for cryptocurrencies in the US, potentially positioning the country as a global hub for crypto talent.
• Decentralized autonomous organizations (DAOs) have faced challenges in achieving true democracy within Discord groups due to technological limitations.
• Market pull, exemplified by companies like Stripe and Twitter, refers to a product or service gaining traction without significant marketing efforts.
• The crypto regulatory scene is worth monitoring for potential shifts in venture capital and project development.
• The importance of free speech and the role of private companies in platforming or not platforming certain speech were discussed.
• Generational differences and influences, particularly the impact of Gen X mentorship on Millennials, were highlighted.
• Individuals should be allowed to express themselves freely, but the market may respond negatively to certain speech.
• The Supreme Court should exercise caution when making decisions that could be used against them by future administrations.
• This week in startups now has two co-hosts, Jason and Alex Wilhelm, and listeners can access the entire archive of almost 2,000 episodes on the podcast's website.
• The show will now feature two news programs a week, and listeners are encouraged to subscribe to the YouTube channel and enable notifications for breaking news updates.