Over the weekend, the hype around generative AI went strangely quiet, as the fallout from the failure of Silicon Valley Bank rapidly rippled through the tech world. By Sunday, executives at thousands of AI startups with deposits in SVB breathed a sigh of relief, as top U.S. federal regulators announced that the FDIC will take control of the bank and protect all depositors.
In a Reuters report, Doktor Gurson, CEO of Berkeley-based Rad AI, which automates radiology and health system processes, said: “I lost a couple years of my life over the weekend to be honest. It’s been a bit of a roller coaster.”
Gurson was particularly worried, he told Reuters, about how to make payroll for his startup with some 65 employees. However, with the Fed’s SVB takeover, depositors will gain access to all of their money, not just the $250,000 minimally ensured amount that had been guaranteed before the announcement. The money will be available today, the regulators said.
AI leaders weighed in on SVB
Several AI leaders weighed in or offered support during the weekend’s nail-biting moments.
Andrew Ng, founder of DeepLearning AI, co-chairman and cofounder of Coursera, and adjunct professor at Stanford University, tweeted: “I’m glad US gov is looking into protecting SVB’s depositors. I see no need to bail out the bank’s investors, but failing to protect depositors — who had taken no reckless risks — can mean large layoffs, damage to trust in banks, and setting back AI & tech innovation by years.”
He also pointed out that he was seeing “the best of the AI and startup world,” with “people helping each other, sharing tips and even wiring funds on trust and without docs so someone else can make payroll. Very encouraging seeing our community rise together to the challenge!”
And Sam Altman, CEO of OpenAI, told investors who wanted to be helpful to “offer emergency cash to your startups that need it for payroll or whatever. no docs, no terms, just send money. it’s hard for me to imagine depositors actually losing money here, but so stressful in the meantime…”
Google and Microsoft prepare new AI announcements
But OpenAI, which enjoys billions of dollars in funding from Microsoft, had little to worry about in the wake of SVB’s failure. And as startup founders struggled through sleepless nights this weekend worrying about making payroll, it was clear that Microsoft and Google were also not sleeping — in advance of more Big Tech AI news in the works for this week.
Microsoft is holding a virtual “Future of Work with AI” event on Thursday, focusing on AI productivity. Thanks to comments last week from Andreas Braun, CTO of Microsoft Germany, rumors are swirling that a multimodal GPT-4 will be a core announcement.
Google is also reportedly sharing a new round of AI news this week as well — so it looks like we’ll be seeing dueling announcements like we did a month ago, when Microsoft debuted its new Bing chatbot and Google introduced Bard.
Signs of AI power consolidation?
In the context of the SVB news, and the sense of AI startup vulnerability that accompanied it, the Google and Microsoft announcements seem to highlight the Big Tech power consolidation that is happening in AI. And it is important to emphasize that there does not seem to be any evidence that issues around generative AI — including its tendency to get things wrong and make things up — have disappeared.
For example, DeepMind researcher Dileep George tweeted a screenshot of ChatGPT saying that OpenAI and its creation of GPT-5 had a part to play in SVB’s collapse.
It will certainly be a busy week in AI, as usual. But as Yoshua Bengio asked in a virtual Q&A last week, “Are we going to build systems that are going to help us have a better life in a philosophical sense, or is it just going to be an instrument of power and profit?”
As AI startups struggle to carry on and Big Tech pushes generative AI to the max, that remains to be seen. Of course, stay tuned.