Microsoft is now the Copilot company, Chief Executive Satya Nadella declared this week at the company’s Ignite conference, not only spreading generative AI across its products but also announcing its first AI processor designs.

The flurry of news at Ignite was just one sign of how much gen AI is getting infused into every enterprise software company’s products. But it still may take awhile to become just as widespread in enterprises themselves, thanks to a raft of challenges in implementing it effectively and safely.

And not least, generative AI is providing a boost to supercomputing, as we found at the SC23 conference. It’s apparent there’s a lot of new thinking about the entire computing stack as AI increasingly defines new architectures for new kinds of workloads.

Update: Just breaking Friday afternoon, Sam Altman was relieved of his CEO duties at OpenAI. The board “concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI.” Wow.

Here’s our story, which was continuously updated as new statements and facts came to light late Friday and early Saturday. TL;DR: Altman and his allies were moving too fast for the board’s taste, perhaps going up against the company’s charter to create safe AI, but it’s not clear what precipitated such a sudden and severe response, one almost unheard-of in Silicon Valley or the rest of the business world.

My take: The potential of this mess to scramble the AI race seems high. Here’s a company on which investors — including Microsoft most of all! — bet billions of dollars on the assumption that it’s the next big startup leading the next big thing. Somehow, those investors ignored the fact that a motley collection of board members — with a bent and a mission toward creating AI not for profits but for pointedly noncorporate purposes — could fire the leader that led its rapid ascent because he was apparently moving too fast… toward growth and profits. Let that sink in.

Where does this leave Microsoft, whose stock both literal and figurative has rocketed since its bet on OpenAI? Clearly the companies’ agreement stands, but will Microsoft get the technology it expects now? Or will it have to spend even more on its own R&D to ensure it doesn’t lose its AI mojo? Either way, this is a huge opening for Amazon Web Services, Google, Meta Platforms and a raft of other AI model providers and AI-adjacent firms such as Databricks and Snowflake. Suddenly the AI opportunity is even more wide open. (Unless, of course, the board resigns and Altman returns. Then never mind.)

Much of what happens next will depends on that now much smaller board, whose move doesn’t exactly inspire confidence. With so much money at stake, you can bet there will be lots of jockeying behind the scenes in coming days and weeks.

Indeed, there already is. As our updated story explains:

The Wall Street Journal, The Information and other outlets reported Saturday that some OpenAI investors, including Microsoft Corp. and Thrive Capital, are lobbying to get Altman reinstated. Altman reportedly is considering whether to go ahead with a potential plan to start a new company or to return to OpenAI if that’s an option, but not surprisingly, he’s reported to want a new board.

The Information also reported that Altman was in discussions with semiconductor executives, including chip designer Arm, on Friday morning, before he was fired, about a potential plan to design new chips that would lower costs for AI models. The publication said it wasn’t clear whether Altman was representing OpenAI or a separate venture. If it was the latter, and he wasn’t keeping the OpenAI board apprised, that might have prompted the board’s action.

Later Saturday, The Verge reported that OpenAI’s board was willing to resign so Altman and Brockman could return but has since “waffled.” More staffers were reportedly ready to resign. It would appear that Microsoft $13 billion, not to mention its very angry CEO Satya Nadella, carries a lot more weight than a board that’s clearly in over its head. You can almost hear the big feet stomping into OpenAI’s San Francisco headquarters all the way from Silicon Valley.

Analysts John Furrier and Dave Vellante discuss some of this news, zeroing in on the big AI chip battle, on their weekly theCUBE Podcast, out early today on YouTube. And this weekend, Vellante runs his latest not-to-be-missed deep-dive Breaking Analysis, this one on the upshot from Microsoft Ignite.

Here’s a sampling of the news this week from SiliconANGLE and beyond:

AI and the cloud

Some reality checks on generative AI:

You already knew this, but 2023 is the year of gen AI hype, says a report from Menlo Ventures out this week, called “The State of Generative AI in the Enterprise.” The point is, enterprises are still a long way from embracing it, the report says, though it also says 2024 will be the year of “real AI adoption.” And maybe it’s no surprise enterprises are taking some time to try to do it right, since, as Zeus Kerravala reports, Cisco says they’re not ready.

I’ve had doubts about the “fair use” argument by many AI companies trying to justify how they trained their models on all manner of content — like, whole books, websites, music catalogs and art collections — without asking first. So does Ed Newton-Rex, former VP of audio at Stability AI who makes a credible case against the argument in Why I just resigned from my job in generative AI. “Companies worth billions of dollars are, without permission, training generative AI models on creators’ works, which are then being used to create new content that in many cases can compete with the original works. I don’t see how this can be acceptable in a society that has set up the economics of the creative arts such that creators rely on copyright.” YouTube, it appears, might be taking a better approach that’s more cooperative with artists: YouTube lets Shorts creators use AI-powered tools to create music using famous artists’ styles

I finally got to reading Unbundling AI by Benedict Evans and it articulates some of my misgivings about chatbots, cool as they are — namely that they’re a bit of a return to the command line (too much work), and answers usually need to be checked (even more work). It remains to be seen how fixable it is given that it’s inherently a probabilistic model: As Evans puts it, this is not a database, so even basing them more on vetted and specific data might not entirely do the trick. But… it’s really early and tough to know how this technology will develop and for what. It still seems likely to have a huge impact — it’s no surprise OpenAI has had to slow signups for ChatGPT Plus — but I’m not sure we really know just how that will play out, except that what we’re predicting now probably will be incomplete at best.

It was all about AI at Microsoft Ignite

Microsoft debuts its first processors, a significant move that, somewhat surprisingly, doesn’t seem to bother its graphics processing unit partner Nvidia, whose CEO Jensen Huang once again joined Microsoft CEO Satya Nadella onstage. For his part, Nadella now calls Microsoft the Copilot company — glad that’s not a drinking game or we’d all be under the table — and it’s hard to envision a bigger bet for the software and cloud giant. A good bet, honestly. We had all the news here:

• First dedicated AI accelerators and in-house Arm processors unveiled for Microsoft Azure
• Microsoft turbocharges AI development with Fabric, Azure AI Studio and database updates
• AI-powered Microsoft Copilot expands with new features and customization
• Broad collection of security products announced at Microsoft Ignite
• Microsoft debuts new AI tools for Windows developers and IT professionals
• Nvidia announces generative AI foundry on Azure and new foundational models
• Microsoft brings generative AI copilots to sales and service teams
• Exclusive: Informatica and Microsoft team on native data integration for Fabric analytics

And more AI news

Gartner forecasts 20% cloud computing growth next year, driven of course by gen AI. Another take on that trend from the Wall Street Journal: Companies Tried to Spend Less on Cloud. Then AI Showed Up.

But not everyone is benefiting: Amazon lays off hundreds from Alexa unit amid generative AI refocus

The AI model battle quickens: OpenAI Hustles to Beat Google to Launch ‘Multimodal’ LLM (from The Information)

A eulogy for coding in The New Yorker.

Synopsys turns to generative AI to aid in semiconductor design

YouTube to require disclosures for realistic-looking AI-generated videos

Even mo’ money — and by the way, artificial general intelligence at some point: OpenAI reveals new details about its AI development roadmap and fundraising plans

This didn’t get much attention, but it seems pretty interesting: Martian debuts novel AI model mapping technology for apps to leverage multiple LLMs at once Model routing is fundamentally about understanding how LLMs work and what makes them succeed or fail. “The better one understands these models, the more effectively you can route between them.”

Another example of the AI moving to where the data is: Dell partners with Hugging Face to help enterprises deploy generative AI on-premises

Startup Fractl releases its language for building generative AI applications to open source

Google’s new GraphCast AI model can forecast the weather 10 days in advance

Meta announces new breakthroughs in AI image editing and video generation with Emu

Salesforce adds more generative AI features to Sales Cloud

YouTube Co-Founder Hurley’s Stealth AI Startup Raises Money from A-Star Capital, Ron Conway (from The Information)

Enterprise

AI revs supercomputing

SiliconANGLE and theCUBE covered the big news at SC23, the supercomputing conference in Denver, from Nvidia, Intel, Dell and more, as supercomputing becomes an even bigger deal in the gen AI era. John Furrier dug deep into what’s coming next in computing architectures as gen AI changes the nature of applications. For an intriguing dive on that, check out his interview with Renu Raman, founder and CEO of Terizza, a stealth company rethinking the computing stack with AI models as the middleware layer. Here are more highlights from the event:

• Nvidia announces new HGX H200 computing platform, with advanced memory to handle AI workloads
• Intel details supercomputing milestones, upcoming AI chips at SC23
• Embracing the AI revolution in high-performance computing: theCUBE’s live analysis at SC23
• AMD-powered Frontier system wins first place in Top500 supercomputer ranking
• AI, high-performance computing and collaboration: Insights from theCUBE at SC23
• AI and HPC drive innovation amid sustainability and security challenges: theCUBE kicks off day 2 at SC23
• Navigating the frontier of collaborative innovation: A glimpse into the future of high-performance computing

And more enterprise news

All that AI is going to require a lot of new data centers: Stack Infrastructure raises $290M in debt financing to build more data centers

Anything but the Nvidia GPUs you can’t get these days: Scaleway delivers cost-optimized Ampere Altra instances as an alternative for AI workloads

Hmm, this seems like a setback for a company that had claimed more momentum just a quarter ago. Big question: What does it say about enterprise spending in the next couple of quarters? Cisco offers light guidance as new product orders slow, sending its stock lower However, analyst Zeus Kerravala thinks it’s a temporary issue: Behind the numbers: five questions from Cisco’s recent quarter

A shot at Databricks and Snowflake? Onehouse open-sources its OneTable data tool with support from Google and Microsoft

And Databricks looks to one-up Microsoft’s Fabric announcement at Ignite: Databricks debuts AI-powered Data Intelligence Platform

A milestone for a bid to track and predict costs across clouds: FinOps Foundation debuts first major release of its FOCUS cloud billing standard

CoreView acquires Simeon Cloud to simplify Microsoft 365 setup and management, and oh, by the way, appoints a new CEO

Grafana Labs acquires AI startup Asserts.ai to ease application observability headaches

Apple supplier Foxconn posts surprise 11% jump in third-quarter profit (from CNBC)

Elsewhere around tech

You can’t walk this back, Elon: As Axios’ Dan Primack puts it: “No investment firms that backed Musk’s takeover of X, nor those that have backed his other ventures, made public statements of opposition or condemnation. Instead, they cowered.” At least there are some consequences. 

So I won’t keep missing texts from my iPhone friends? Finally: Apple moves to make RCS messaging available on iPhones amid regulatory scrutiny

Report: Applied Materials under investigation for sending chipmaking gear to China in breach of export rules

Fnality raises $95M to tokenize money for major banks led by Goldman and BNP Paribas

Oops: Google witness accidentally blurts out that Apple gets 36% cut of Safari deal Except then Google CEO Sundar Pichai confirmed it.

Blockchain.com raises $110M in funding led by Kingsway Capital

No car salesmen: Amazon is about to get into the business of selling cars

Cyber beat

Well, that’s the height of chutzpah, as David Strom put it: Ransomware attacks now come with SEC breach complaints

Third quarter sees a surge in cybersecurity funding: $1.2B across 70 deals

Palo Alto Networks adds new AI-related security features to its Cortex line

SlashNext’s latest service offers protection against QR code phishing

Google takes legal action against scammers using fake Bard ads to spread malware

FBI dismantles IPStorm proxy botnet, arrests operator in Puerto Rico

Google discovers high-severity vulnerability in latest Intel server processors

Google reveals details of Zimbra vulnerability used to target government organizations

Palo Alto Networks earnings top estimates, billings guidance misses stock falls 5% (from Investors Business Daily)

Comings and goings

Salesforce appoints a new CEO for Slack, Denise Dresser, formerly president of Accelerated Industries.

Alternative cloud provider Virtuozzo appoints Sergey Dobrovolsky, formerly vice president of cyber infrastructure at Acronis, its new chief technology officer.

What’s next

Supercloud 5: The Battle for AI Supremacy Nov. 28-Dec. 1: SiliconANGLE and theCUBE will present insights into how the big cloud players as well as on-premises veterans are angling to take advantage of the huge AI opportunities, with coverage that includes onsite reporting and interviews from AWS re:Invent in Las Vegas, anchored in a live virtual event from our Palo Alto studio. Register here for the event.

HPE Discover Barcelona Nov. 29-30: TheCUBE will be there live and SiliconANGLE will have the news.

Image: Bing Image Creator; photo: Microsoft/livestream