With Chips Company Move, Sam Altman Ran Afoul of U.S. Deep State And Had To Be Punished
By trying to build his own chip foundry he upset American interest
Are Sam Altman’s and Satya Nadella’s fates linked?
In the days where I was an FBI informant I spoke to the U.S. government often about various technology firms. A common theme was Softbank and Masa Son’s ties to organized crime. You’d be surprised at how often that organized crime thing comes up in tech discussions, especially around the late Sheldon Adelson.
We have explored the role of the mob in helping the deep state make technological marvels happen in the American context. Perhaps our error was making that discussion a purely American affair. There are other states and other mobs and the intersection of say, the Chinese or Israeli or Russian mob, is an altogether under explored topic, especially when it concerns Sam Altman’s native Missouri.
It’s easy to see how Sam Altman, son of a St. Louis mob real estate guy, and Masa Son, son of a Korean mobster, might have jibed and it’s also easy to see how the logic of Open AI, with its vast demands for computing power, might have found an alliance with Softbank enticing but the U.S. government wasn’t about to let the U.S. CHIPS Act be for naught. Why invest all that money in the future of software chips if you’re not going to make them standard going forward? And if you’re going to make them standard you’re not going to tolerate them being wasted on malarkey.
Any attempt by Altman to build his own chip factory was a huge mistake and it’ll go down in history as one of those hubristic business decisions that was altogether totally unnecessary — unnecessary, that is, unless you’re like Sam Altman and you want to get a little taste of the industry you’re launching without the confines of the AI nonprofit. This is a greed thing and you should understand it accordingly. For the revolution can’t just be altruistically undertaken. No, you have to get your beak wet through those supplying Open AI.
If generative AI really is so significant — and I have my doubts — then it’s probably a bad idea to entrust someone with ties to organized crime in the supply chain. We’re told that when Altman was asked about these efforts with Softbank and formerly British semiconductor firm ARM he lied about them to the board so the board was left with no choice but to fire him. Sam has always had a passing familiarity with ethics as the Wall Street Journal recently noted.
A lot of people vouched for Sam on his world tour and a lot of the people he met with were trying to get a read on him, especially the intelligence professionals who masqueraded as business people. Reports vary but from what I’m told he didn’t acquit himself terribly well. Nor apparently did Greg Brockman, Sam’s rather rude cofounder.
There’s a lot of discussion about how Altman will readily raise for a new venture — one of his brothers already is raising for a venture fund — or how Microsoft itself wants Altman back. I find both analyses to be wildly off the mark. It’s true that Microsoft needs growth after its increasingly losing cloud business to more government friendly Amazon Web Services and Google Cloud.
I’ve known Sam for a number of years and while he’s bright I never found him to be particularly brilliant. He was terribly political though and the way he ran Y Combinator could be described as more than a bit mobby, applying pressure to investors and entrepreneurs alike. The startup which purportedly made him rich went bankrupt soon after he sold it. Loopt was a sort of Grindr avant la lettre and backed by Sequoia, of course. Sequoia — front that it is for the Chinese mob — had designs on Missouri as evinced by former Sequoia partner Michael Goguen investing backing disgraced Missouri governor Eric Greitens.
Naturally Altman has no expertise in AI, fusion or anything else he invests in. He is, in other words, a front man and it’s small wonder that Josh Kushner’s Thrive Capital likes him.
For what it’s worth I’ve come to believe that the primary purpose of ChatGPT is to harvest your prompts — which are attached to your ID — and not to sell API calls. And while it’s quite possible that Altman’s supporters may yet succeed in bringing him back to OpenAI — I think we’ve probably seen the last of Microsoft’s support for Altman. Microsoft has its own problems not least of which is the $29B+ tax bill Uncle Sams says it owes. Microsoft has likely already gotten the call though your guess is as good as mine as to whether it was Satya Nadella on the other end of the line but I do suspect a call went out.
Microsoft board member Reid Hoffman and Sam Altman are purportedly clashing about the future of AI and you haven’t heard a word from Hoffman during this whole debacle. Hoffman remains one of the few deep state friendly tech investors despite (or is it because of?) his traveling around with Jeffrey Epstein. Here’s to hoping that Hoffman and others on the Microsoft board can clean up that firm before it’s too late.
We’ve explored Altman’s family ties to St. Louis organized crime before — Missouri will continue to be a topic as the 2024 cycle gets underway — but there are a few light themes I want to hit before closing.
The Arab countries are tired of being treated like an ATM for misadventures. They’re looking for something real to sink their teeth into.
The Japanese deep state has increasingly been tightening the rules around its tech industry. Expect Masa Son to be more and more obviously a pet.
Higher interest rates is blowing up the cult of the founder. It’s always dedicated teams who ultimately decide these questions.
Who knew that Gina Raimondo and the CHIPS Act would so fundamentally transform the types of start ups which exist, get funded, and support from the US deep state?
Was AI a low interest rate phenomenon? Discuss amongst yourselves.
Ask yourself why it is that we keep getting these stories right…. way ahead of the conventional analysts.
Masa is the son of a relatively wealthy small business owner, not a Korean mobster. His father ran a small Pachinko business, which is a legal yet shady industry where many Korean Japanese make a lot of money.