Ego, fear and money

SAN FRANCISCO — Elon Musk celebrated his 44th birthday in July 2015 at a three-day party thrown by his wife at a California wine country resort dotted with cabins. It was family and friends only, with children racing around the upscale property in Napa Valley.

This was years before Twitter became X, and Tesla had a profitable year. Mr. Musk and his wife, Talulah Riley — an actress who played a beautiful but dangerous robot on HBO’s science fiction series “Westworld” — were a year from throwing in the towel on their second marriage. Larry Page, a party guest, was still CEO of Google. And artificial intelligence had pierced the public consciousness only a few years before, when it was used to identify cats on YouTube — with 16% accuracy.

AI was the big topic of conversation when Mr. Musk and Mr. Page sat down near a fire pit beside a swimming pool after dinner the first night. The two billionaires had been friends for more than a decade, and Mr. Musk sometimes joked that he occasionally crashed on Mr. Page’s sofa after a night playing video games.

But the tone that clear night soon turned contentious as the two debated whether AI would ultimately elevate humanity or destroy it.

As the discussion stretched into the chilly hours, it grew intense, and some of the more than 30 partyers gathered closer to listen. Mr. Page, hampered for more than a decade by an unusual ailment in his vocal cords, described his vision of a digital utopia in a whisper. Humans would eventually merge with artificially intelligent machines, he said. One day there would be many kinds of intelligence competing for resources, and the best would win.

If that happens, Mr. Musk said, we’re doomed. The machines will destroy humanity.

With a rasp of frustration, Mr. Page insisted his utopia should be pursued. Finally, he called Mr. Musk a “specieist,” a person who favors humans over the digital life-forms of the future.

That insult, Mr. Musk said later, was “the last straw.”

Many in the crowd seemed gobsmacked, if amused, as they dispersed for the night and considered it just another one of those esoteric debates that often break out at Silicon Valley parties.

But eight years later, the argument between the two men seems prescient. The question of whether AI will elevate the world or destroy it — or at least inflict grave damage — has framed an ongoing debate among Silicon Valley founders, chatbot users, academics, legislators and regulators about whether the technology should be controlled or set free.

That debate has pitted some of the world’s richest men against one another: Mr. Musk, Mr. Page, Mark Zuckerberg of Meta, tech investor Peter Thiel, Satya Nadella of Microsoft and Sam Altman of OpenAI. All have fought for a piece of the business — which one day could be worth trillions of dollars — and the power to shape it.

At the heart of this competition is a brain-stretching paradox. The people who say they are most worried about AI are among the most determined to create it and enjoy its riches. They have justified their ambition with their strong belief that they alone can keep AI from endangering Earth.

Mr. Musk and Mr. Page stopped speaking soon after the party that summer. A few weeks later, Mr. Musk dined with Mr. Altman, who was then running a tech incubator, and several researchers. That dinner led to the creation of a startup called OpenAI later in the year.

Thanks to its ChatGPT chatbot, OpenAI has fundamentally changed the technology industry and has introduced the world to the risks and potential of artificial intelligence. OpenAI is valued at more than $80 billion, according to two people familiar with the company’s latest funding round, although Mr. Musk and Mr. Altman’s partnership didn’t make it. The two have since stopped speaking.

“There is disagreement, mistrust, egos,” Mr. Altman said. “The closer people are to being pointed in the same direction, the more contentious the disagreements are.”

Last month, that infighting came to OpenAI’s boardroom. Rebel board members tried to force out Mr. Altman because, they believed, they could no longer trust him to build AI that would benefit humanity. Over five chaotic days, OpenAI looked as if it were going to fall apart, until the board — pressured by giant investors and employees who threatened to follow Mr. Altman out the door — backed down.

Years before OpenAI’s near meltdown, there was a little-publicized but ferocious competition in Silicon Valley for control of the technology that is now quickly reshaping the world, from how children are taught to how wars are fought. The New York Times spoke with more than 80 executives, scientists and entrepreneurs, including two people who attended Mr. Musk’s birthday party in 2015, to tell that story of ambition, fear and money.

The birth of DeepMind

Five years before the Napa Valley party and two before the cat breakthrough on YouTube, Demis Hassabis, a 34-year-old neuroscientist, walked into a cocktail party at Mr. Thiel’s San Francisco town house and realized he had hit pay dirt. There in Mr. Thiel’s living room, overlooking the city’s Palace of Fine Arts and a swan pond, was a chessboard. Mr. Hassabis had once been the second-best player in the world in the under-14 category.

“I was preparing for that meeting for a year,” Mr. Hassabis said. “I thought that would be my unique hook in: I knew that he loved chess.”

In 2010, Mr. Hassabis and two colleagues, who all lived in Britain, were looking for money to start building “artificial general intelligence,” or AGI, a machine that could do anything the brain could do. At the time, few people were interested in AI. After a half-century of research, the AI field had failed to deliver anything remotely close to the human brain.

Still, some scientists and thinkers had become fixated on the downsides of AI. Many, including the three young men from Britain, had a connection to Eliezer Yudkowsky, an internet philosopher and self-taught AI researcher. Mr. Yudkowsky was a leader in a community of people who called themselves Rationalists or, in later years, effective altruists.

Mr. Yudkowsky introduced Mr. Hassabis to Mr. Thiel.

His group made their pitch, and soon Mr. Thiel and his venture capital firm agreed to put 1.4 million British pounds (roughly $2.25 million) into their startup. He was their first major investor.

They named their company DeepMind, a nod to “deep learning,” a way for AI systems to learn skills by analyzing large amounts of data; to neuroscience; and to the Deep Thought supercomputer from the sci-fi novel “The Hitchhiker’s Guide to the Galaxy.” By the fall of 2010, they were building their dream machine. They wholeheartedly believed that because they understood the risks, they were uniquely positioned to protect the world.

“I don’t see this as a contradictory position,” said Mustafa Suleyman, one of the three DeepMind founders. “There are huge benefits to come from these technologies. The goal is not to eliminate them or pause their development. The goal is to mitigate the downsides.”

Having won over Mr. Thiel, Mr. Hassabis worked his way into Mr. Musk’s orbit. About two years later, they met at a conference organized by Mr. Thiel’s investment fund, which had also put money into Mr. Musk’s company SpaceX. Mr. Hassabis secured a tour of SpaceX headquarters. Afterward, with rocket hulls hanging from the ceiling, the two men lunched in the cafeteria and talked.

Mr. Musk explained that his plan was to colonize Mars to escape overpopulation and other dangers on Earth. Mr. Hassabis replied that the plan would work — so long as super-intelligent machines didn’t follow and destroy humanity on Mars, too.

Mr. Musk was speechless. He hadn’t thought about that particular danger. Mr. Musk soon invested in DeepMind so he could be closer to the creation of this technology.

DeepMind built a system that could learn to play classic Atari games such as Space Invaders, Pong and Breakout to illustrate what was possible.

This got the attention of another Silicon Valley powerhouse, Google, and specifically Mr. Page. He saw a demonstration of Deep Mind’s machine playing Atari games. He wanted in.

The talent auction

In the fall of 2012, Geoffrey Hinton, a 64-year-old professor at the University of Toronto, and two graduate students published a research paper that showed the world what AI could do. They trained a neural network to recognize common objects such as flowers, dogs and cars.

Scientists were surprised by the accuracy of the technology built by Mr. Hinton and his students. One who took particular notice was Yu Kai, an AI researcher who had met Mr. Hinton at a research conference and had recently started working for Baidu, a giant Chinese internet company. Baidu offered Mr. Hinton and his students $12 million to join the company in Beijing, according to three people familiar with the offer.

Mr. Hinton turned Baidu down, but the money got his attention.

“We did not know how much we were worth,” Mr. Hinton said. He consulted lawyers and experts on acquisitions and came up with a plan: “We would organize an auction, and we would sell ourselves.”

Google made an offer. So did Microsoft. DeepMind quickly bowed out as the price went up. The industry giants pushed the bids to $20 million and then $25 million, according to documents detailing the auction. As the price passed $30 million, Microsoft quit, but it rejoined the bidding at $37 million.

Then Microsoft dropped out a second time. Only Baidu and Google were left, and they pushed the bidding to $42 million, $43 million. Finally, at $44 million, Mr. Hinton and his students stopped the auction. The bids were still climbing, but they wanted to work for Google. And the money was staggering.

It was an unmistakable sign that deep-pocketed companies were determined to buy the most talented AI researchers, which was not lost on Mr. Hassabis at DeepMind. He had always told his employees that DeepMind would remain an independent company. That was, he believed, the best way to ensure its technology didn’t turn into something dangerous.

But as Big Tech entered the talent race, he decided he had no choice: It was time to sell.

By the end of 2012, Google and Facebook were angling to acquire the London lab, according to three people familiar with the matter. Mr. Hassabis and his co-founders insisted on two conditions: No DeepMind technology could be used for military purposes, and its AGI technology must be overseen by an independent board of technologists and ethicists.

Google offered $650 million. Mr. Zuckerberg of Facebook offered a bigger payout to DeepMind’s founders but would not agree to the conditions. DeepMind sold to Google.

When Mr. Musk invested in DeepMind, he broke his own informal rule — that he would not invest in any company he didn’t run himself. The downsides of his decision were already apparent when, only a month or so after his birthday spat with Mr. Page, he again found himself face to face with his former friend and fellow billionaire.

The occasion was the first meeting of DeepMind’s ethics board, on Aug. 14, 2015. The board had been set up at the insistence of the startup’s founders to ensure that their technology did no harm after the sale. The members convened in a conference room just outside Mr. Musk’s office at SpaceX, with a window looking out onto his rocket factory, according to three people familiar with the meeting.

But that’s where Mr. Musk’s control ended. When Google bought DeepMind, it bought the whole thing. Mr. Musk was out. Financially, he had come out ahead, but he was unhappy.

Eight months later, DeepMind had a breakthrough that stunned the AI community and the world. A DeepMind machine called AlphaGo beat one of the world’s best players at the ancient game of Go. The game, streamed over the internet, was watched by 200 million people across the globe. Most researchers had assumed that AI needed another 10 years to muster the ingenuity to do that.

The breakup

Convinced that Mr. Page’s optimistic view of AI was dead wrong, and angry at his loss of DeepMind, Mr. Musk built his own lab.

OpenAI was founded in late 2015, just a few months after he met with Mr. Altman at the Rosewood hotel in Silicon Valley.

In late 2017, Mr. Musk hatched a plan to wrest control of the lab from Mr. Altman and the other founders and transform it into a commercial operation that would join forces with Tesla and rely on supercomputers the car company was developing, according to four people familiar with the matter.

When Mr. Altman and others pushed back, Mr. Musk quit and said he would focus on his own AI work at Tesla. In February 2018, he announced his departure to OpenAI’s staff.

OpenAI suddenly needed new financing in a hurry. Mr. Altman flew to Sun Valley for a conference and ran into Satya Nadella, Microsoft’s CEO. A tie-up seemed natural. Mr. Altman knew Microsoft’s chief technology officer, Kevin Scott. Microsoft had bought LinkedIn from Mr. Hoffman, an OpenAI board member. Mr. Nadella told Mr. Scott to get it done. The deal closed in 2019.

Mr. Altman and OpenAI had formed a for-profit company under the original nonprofit, they had $1 billion in fresh capital, and Microsoft had a new way to build AI into its vast cloud computing service.

Not everyone inside OpenAI was happy.

Dario Amodei, a researcher with ties to the effective altruist community, had been on hand when OpenAI was born. Mr. Amodei, who endlessly twisted his curls between his fingers as he talked, was leading the lab’s efforts to build a neural network called a large language model that could learn from enormous amounts of digital text. By analyzing countless Wikipedia articles, digital books and message boards, it could generate text on its own. It also had the unfortunate habit of making things up. It was called GPT-3, and it was released in the summer of 2020.

Researchers inside OpenAI, Google and other companies thought this rapidly improving technology could be a path to AGI.

But Mr. Amodei was unhappy about the Microsoft deal because he thought it was taking OpenAI in a really commercial direction. He and other researchers went to the board to try to push Mr. Altman out, according to five people familiar with the matter. After they failed, they left.

In 2021, the group of about 15 engineers and scientists created a new lab called Anthropic. The plan was to build AI the way the effective altruists thought it should done — with very tight controls.

Anthropic accepted a $4 billion investment from Amazon and another $2 billion from Google two years later.

The reveal

After OpenAI received another $2 billion from Microsoft, Mr. Altman and another senior executive, Greg Brockman, visited Bill Gates at his sprawling mansion on the shores of Lake Washington, outside Seattle. The Microsoft founder was no longer involved in the company day to day but kept in regular touch with its executives.

Over dinner, Mr. Gates told them he doubted that large language models could work. He would stay skeptical, he said, until the technology performed a task that required critical thinking — passing an Advanced Placement biology test, for instance.

Five months later, on Aug. 24, 2022, Mr. Altman and Mr. Brockman returned and brought along an OpenAI researcher named Chelsea Voss. Ms. Voss had been a medalist in an international biology Olympiad as a high schooler. Mr. Nadella and other Microsoft executives were there, too.

On a digital display on a stand outside Mr. Gates’ living room, the OpenAI crew presented a technology called GPT-4. Mr. Brockman gave the system a multiple-choice advanced biology test, and Ms. Voss graded the answers. There were 60 questions. GPT-4 got only one answer wrong.

By that October, Microsoft was adding the technology across its online services, including its Bing search engine. And two months later, OpenAI released its ChatGPT chatbot, which is now used by 100 million people every week.

OpenAI had beat the effective altruists at Anthropic. Mr. Page’s optimists at Google scurried to release their own chatbot, Bard, but were widely perceived to have lost the race to OpenAI. Three months after ChatGPT’s release, Google stock was down 11%. Mr. Musk was nowhere to be found.