This week was turbulent for OpenAI’s Sam Altman, who was fired and then re-hired by the firm he founded. X (formerly Twitter) lost major advertisers because of antisemitic sentiments on the platform. A health insurance artificial intelligence (AI) algorithm was found to be grossly inaccurate, leading to insurance claim denials. Sam Bankman-Fried of FTX got his appeal denied by U.S. courts following his sentencing. Finally, crypto trading platform Binance lost billions after its founder agreed to a plea deal. Here are the highlights.
#1. A dramatic week at OpenAI
On November 17, OpenAI announced that its founder, Sam Altman, was fired from the company. The decision was made by the board of directors, which found that Mr. Altman “was not consistently candid in his communications”. The shocking statement also said that the board had lost confidence in Mr. Altman’s leadership of OpenAI. No further reasons were given for the decision. The next day, OpenAI’s president and cofounder Greg Brockman also quit his position at OpenAI in protest.
On November 20th, Microsoft’s CEO Satya Nadella offered to hire Mr. Altman and Mr. Brockman. The two would lead a new, independent research lab within Microsoft. On the same day, CNN reported that 505 out of 700 OpenAI employees threatened to leave the company. They claimed that the board of directors mishandled Mr. Altman’s firing and did not give evidence for their decision. The next day, Microsoft’s Chief Technology Officer Kevin Scott offered to hire the OpenAI employees at the same compensation. It is worth noting that Microsoft is OpenAI’s biggest investor.
However, on November 22, OpenAI announced that they would reinstate Mr. Altman as CEO. The company said they had reached an “agreement in principle” with Mr. Altman to return to work with a new board of directors. Further updates to these developments are expected in the coming days.
#2. Elderly patients denied healthcare by flawed AI model
A lawsuit was filed this week against UnitedHealthcare, the largest health insurance provider in the United States. The lawsuit alleges that an artificial intelligence (AI) model used by UnitedHealthcare is deeply flawed, yielding a 90% error rate. The model created by naviHealth is called nH Predict. It estimates how much care a patient will need after an acute illness like stroke. According to the lawsuit, the nH Predict algorithm goes against what doctors recommend and denies insurance to elderly patients. This means that they lose their Medicare Advantage Plan, which is government-funded, and pay for the care they need using their life savings instead.
Earlier this month, Stat News investigated the UnitedHealthcare algorithm and found it wanting. For example, patients on a Medicare Advantage Plan get 100 days of insurance cover if they stay in hospital for three days. With the nH Predict algorithm, however, these patients get coverage for a maximum of 14 days instead of 100 days.
The lawsuit was filed in the District of Minnesota by the relatives of two deceased people who were denied UnitedHealthcare insurance coverage. UnitedHealthcare and naviHealth, its subsidiary, are accused of breach of contract and insurance law violations. The lawsuit calls for health insurance companies to stop using AI to determine patient claims.
#3. X continues to lose advertisers
Last week, X owner CEO Elon Musk appeared to endorse an antisemitic tweet on his platform. One day later, Media Matters for America published a report showing that the platform placed ads by companies like Amazon and NBCUniversal beside Nazi-related content. The White House also condemned Mr. Musk’s “abhorrent promotion of antisemitic and racist hate in the strongest terms.”
According to CBS News, this recent loss of advertisers is part of a growing trend. Brands are increasingly growing wary of advertising on X because of hate speech. By September this year, ad revenue on X was already down by 60%. This backlash against Mr. Musk’s sentiments will discourage investors even further.
#4. U.S. Court of Appeals denies Sam Bankman-Fried’s bid
On November 2, Sam Bankman-Fried was found guilty of seven counts of fraud and conspiracy for his role at the cryptocurrency exchange firm, FTX. His charges included stealing billions of dollars from customer accounts and money laundering. His second hearing will be held on March 28, 2024. Mr. Bankman-Fried could receive a prison sentence of 115 years.
This week, however, a ruling by the U.S. Court of Appeals denied Mr. Bankman-Fried’s appeal against the conviction. The court found that his arguments for release were “unpersuasive” given his conduct during the trial process. Mr. Bankman-Fried had previously attempted to tamper with witnesses. He had also leaked confidential information while under house arrest. Mr. Bankman-Fried’s lawyers intend to fight the charges.
#5. Binance loses billions within hours of its founder’s plea deal
The founder and CEO of Binance, Changpeng Zhao, agreed to a plea deal this week. He will pay a fine of $50 million and step down from the company. Binance, which is the world’s largest cryptocurrency exchange, will also pay a fine of over $1.8 billion, and surrender over $2.5 billion to the U.S. government. This will settle three criminal charges against Mr. Zhao, including money laundering and violating U.S. economic sanctions.
Within hours of the news, Binance users withdrew over $1 billion worth of crypto assets from the platform. The rate of conversions from digital assets to cash, which is called liquidity, fell by 25%. Binance’s own crypto token, BNB, also dropped 8% of its value. These changes show that the plea bargain shook crypto investors, who have increased their withdrawals from the platform.
However, there are still hundreds of cryptocurrencies trading on Binance. Experts believe that while the fine of $4.3 billion will hurt the platform, Binance is still a dominant player in the crypto exchange market and may recover from the disruption.