Sunday, June 16, 2024

What Does the OpenAI Crisis Mean for Programmers?

Programming LanguageWhat Does the OpenAI Crisis Mean for Programmers?


The OpenAI crisis that sprung up during a no-thrills weekend in late 2023 hasn’t cooled down yet. Even though it quickly got sorted out, it’s still a matter of speculation, rumours, and special newsletters diving into the board’s decision to fire Sam Altman due to his alleged inability to be candid. 

Since it’s a developing story, offering our take could be a bit premature. Instead, we’re focusing on what the OpenAI affair means for software engineers, those who have an eye —or two— on the AI sector and are looking for jobs.

In short: it’s good news. The OpenAI affair suggests that software engineers will have increasingly more work opportunities in the coming years. Let’s explore why.

A brief rundown of the OpenAI crisis

In January 2023, mere months after ChatGPT dropped, Microsoft invested significantly in OpenAI. The guys behind Windows and Azure, who were already OpenAI investors, devoted 10 billion dollars to the continuous research of AI. That’s a lot of cash — even for Microsoft.

Let’s fast track to November, when Altman was removed from his position as CEO by the board of directors. You’ve probably read the official statement — their justification was that Altman hadn’t been earnest enough in his reports. This very statement led to a bonfire of speculation.

It also led to rapid moves. Remember how Microsoft had a significant stake in OpenAI? Their CEO Satya Nadella acted fast. Seeing this unfold on a Friday, Microsoft contacted Altman during the weekend and offered him a position as the lead of an AI department at Microsoft.

As the story made headlines, hundreds of OpenAI members demanded that Sam Altman return to the company — or they would leave. Microsoft got wind of the complaint and even offered more than 700 employees jobs in their AI division. Pressured by the outcry, OpenAI reversed its decision and brought Altman back.

From this brief account, we’re drawing certain conclusions. Some of those are:

  • There is excess liquidity in the AI sector 

  • A lot of money won’t make AI products good

  • Many companies will probably jump onto the AI bandwagon

There is excess liquidity in the AI sector — and that’s good news for programmers

When there is excess liquidity in any given industry there are countless people willing to put money into the sector, either by investing or developing within the industry. A good example of this is the dot-com bubble in the 1990s, or the housing market in the 2000s before the 2008 mortgage crisis. Everyone was willing to pour in money before the stocks dipped in a blink.

These two examples have resulted in severe crises, but a period of excess liquidity doesn’t necessarily mean a crisis will soon follow. If Microsoft’s far-from-shy investment taught us anything, it’s that the artificial intelligence industry is the next (well present) big thing. Microsoft’s investment in OpenAI is notable, but other AI companies, such as Anthropic, also received very sumptuous investments. In Anthropic’s case, it was a $550 million deal. It sounds like chump change compared to OpenAI, but it’s still considerable. There have been dozens of similar deals in 2023, further strengthening the impression that the AI market is very liquid.

This AI boom is great news for all developers in the field, as the facts show how demand for tech is currently on an incredible upswing. 

A surging demand for tech suggests that AI developers with skills and experience in this field will have many more job offers and the potential to request better pay cheques. Microsoft’s ability to hire around 700 new OpenAI employees demonstrates great intent and interest in developers, programmers, engineers, and others working in the AI industry.

A lot of money won’t make AI products good

Although we are only at the beginning of this new era marked by Large Language Models and AI that can allegedly evolve into Artificial General Intelligence, we could draw certain conclusions from similar investment sprees. For example, WeWork and FTX’s outstandingly fast rise and very dramatic downfall drove in a lot of liquidity — and Forbes covers — before being pushed into flimsy valuations and oblivion. These are cautionary tales about how splurging too much money too soon can make bubbles burst. What we most often forget about these crashes is that a great deal of workers are left without a salary because of them, and that’s the focus of our analysis.

These examples don’t mean that the AI sector is about to crash and leave developers kicking tumbleweeds. We’re only pointing out that excess liquidity in a particular industry does not mean that the high-profile products will be good, lasting, and sustainable. It’s not a linear condition. 

It’s not like a huge investment and plenty of press means a company will exist in three years, or that they’ll ship a product that millions of users will love. Moreover, having a considerable market cap just because you’re claiming you’re using “AI” doesn’t mean you’re truly creating something valuable for the market.

Many companies will probably jump onto the AI bandwagon — and compromise job safety

A clear example of how excess liquidity in an industry does not guarantee that its products will be even close to the sector is the case of Long Island Iced Tea Corp, whose market cap was worth $7 million in 2017. Overnight, they decided to change the name to Long Blockchain, and within a few days, their total shares were worth almost $140 million. Is this excess liquidity and interest in the company proof that the product is groundbreaking? Not at all. The product itself did not change at all, except for its name. Yet another example is that excess liquidity is not a consequence of good products or sustainable business practices that developers should look out for.

Once the AI market stabilises, only the truly helpful and quality AI products —such as an AI-generated photoshoot service— will be successful. Most cash-grabbers will most likely fade out and move on to the next fad. 

This could not be a problem for consumers, but it is for developers. Developers looking for a job will have a short-lived one if they land a position in an AI company making faulty products only to hop onto the AI train.

The AI sector is looking for more than just programming skills

It’s true — CEOs and developers have entirely disparate responsibilities. But the underlying “looming threat to humanity’s existence” that OpenAI’s board seems to have conveyed when firing Altman suggests that every employee in the company should be expected to be ethically responsible, even if it’s a dev punching in C# code.

What does “ethically responsible” even mean? Well, those companies will hire developers who are sensible enough to thwart any AI product that could potentially “skynet” us all. Every jobseeker out there knows that the mission and vision of a company are usually hogwash and that an “agile, committed team” could still be the most sluggish squad out there. But with the advent of AI and Altman’s firing, the mission of “don’t literally develop an AI that will nuke us out of our jobs” could finally mean something for developers.

So, if you’re a developer looking for a job in AI, remember the sector’s front-running CEO got fired for not being candid — not even for being good or bad at his line of work.

Companies are interested in programmers who are in AI

We suggested this one when we discussed Microsoft’s weekend offer to every OpenAI employee: If you’re already working in AI, you’ll probably get juicy offers from other AI competitors. Once you crack it, you’ll be in the fast money lane.

Let’s check it from a Microsoft perspective. If Microsoft had indeed hired around 720 OpenAI software engineers, considering the average German salary for the role in 2023, it would have represented a substantial investment, even for them. Taking the mean between the reported €71,100 offered to men and €67,800 offered to women, the average annual salary comes to roughly €69,450. By multiplying this by the number of engineers, Microsoft would have faced a potential gross expenditure of approximately $55 million annually. That’s more than the annual payroll of Bayer Leverkusen’s pro football squad, and they’re certainly having a good run this season. By the way, the total expenditure we’re putting together is still incredibly conservative and taken from the perspective of German tech salaries.

Now, $55 million a year sounds laughable for Microsoft. But offering them to come join in without interview processes and during the weekend screams, “I really need you here because this is my priority.” Developers should capitalise on this interest and take note. If you’re already in AI, you’ll probably get drafted for the best jobs out there.

Programmers have been set up for success

So, the most obvious conclusion is that AI programmers’ jobs will be widespread. We’re specifically talking about programmers and not software engineers now. Data Scientists, AI Systems Architects, Data analysts, Machine Learning engineers and more roles are in increasing demand, and AI could bring them into the fold. 

AI ain’t just poorly UX’d chatbots. That’s why we say that the high demand will not only fall on software engineers. For example, infrastructure roles will also be in high demand. Someone needs to deploy those headline-making LLMs, which will most likely pay very well because the market is thirsty for them.

In conclusion, the Silicon Valley Game of Thrones OpenAI drama suggests that demand for programmers in the artificial intelligence industry will continue to increase. Programmers who can perform tasks beyond programming will be highly valued, even if they’re not exactly doing research on how transformers can make Hollywood-looking movies out of a prompt. 

Also, the drama suggests that developers with an earnest (or, say, candid) sense of a company’s values and mission will inevitably have the edge, since organisations are remarkably afraid about evolved chatbots getting us into trouble. Companies will appreciate you’re just as worried as them about creating Skynet and that you’ll stop working and take a break if you’re about to push code that will become sentient, invent time travel, and doom us all.

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