Weekend Box: CZ Come CZ Go, Open AI Plays With Firing & Gets Burnt & more
Welcome to The Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
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DUTCH STRAP IN FOR WILD-ERS RIDE
The results of the Dutch general election mark another chapter of the chaotic politics of the Netherlands in 2023. A clear victory for Geert Wilders and his right-wing, Eurosceptic, anti-immigrant Freedom Party (PVV) is the latest twist.
This election was precipitated by the sudden fall of prime minister Mark Rutte, after he failed to unite his coalition partners behind a new asylum policy. Pundits had tipped Rutte’s successor as leader of his People's Party for Freedom and Democracy, Dilan Yeşilgöz-Zegerius, to win and be in a position to form a new government.
But in an election campaign dominated by debate on immigration, PVV’s long-standing tough position saw the party surge and more liberal parties, including VVD, taking a hit. Pundits argued that VVD’s decision to focus on tackling immigration served to legitimise PVV’s position in the eyes of voters.
Although PVV won the most seats it did not secure an outright majority and there are no guarantees it will be able to form a government. Geert Wilders’ track record of anti-Islamic rhetoric and appearances in court over racist remarks have made would-be coalition partners concerned about working with a leader who might be prone to unconstitutional behaviour.
This opens the door to a possible centrist coalition led by the VVD, featuring the insurgent New Social Contract party and other liberal or centre-left blocs. But other party leaders will be worried about a popular backlash if the PVV doesn’t end up in a governing coalition.
Commentators are expecting lengthy coalition talks – last time round the discussions lasted a full 271 days. Whatever government is formed, politicos across Europe will be wondering if more parties of VVD’s ilk will be gaining support – and what sort of challenge it could pose to the status quo.
It couldn’t happen here, could it?
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OPENAI PLAYS WITH FIRING, GETS BURNT
The last week saw a remarkable example of how not to conduct boardroom business: the 5-day dismissal and reinstatement cycle of Sam Altman, CEO of the leading AI developer and maker of ChatGPT, OpenAI.
On Friday came the shock announcement of Altman’s dismissal by the OpenAI board via a blogpost, following a video call with Altman. This stated that he was removed after a ‘deliberative review process’ which concluded ‘he was not consistently candid in his communications with the board.’
The move seemed to have stemmed from a rift with Ilya Sutskever, a founding board member. He was said to be increasingly alarmed that the company’s technology could pose a significant risk, and that Altman was not paying close enough attention to the potential harms. He and three others on the six-person board moved to dismiss Altman.
OpenAI’s President, Greg Brockman, seemed blindsided and immediately resigned. Thereafter, confusion reigned. Microsoft, which has invested some $13bn in OpenAI, pressed the board unsuccessfully to reinstate Altman. On Sunday evening, after two days of fraught negotiations, the board doubled down and named the second interim CEO in two days: Emmet Shear, a former executive at Twitch, to replace Mira Murati, an OpenAI staffer promoted on Friday.
By Monday morning, some 700 of OpenAI’s 770 employees had signed an open letter threatening to move en masse to Microsoft unless the board resigned and OpenAI rehired Altman.
Come Tuesday, the firm announced an ‘agreement in principle’ for Altman to return, in response to the collective outrage. Brockman returned with him, posting “We are so back” on X in a selfie with a throng of OpenAI employees.
All change at the board, which for now has three members: Brockman; Bret Taylor, ex Salesforce, as Chairman; and Larry Summers, former Treasury Secretary.
For a deep-dive on the motivations behind Altman’s firing, read Lucy Thompson’s piece for Audley Intelligence here.
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DARFUR ON THE BRINK OF DISASTER
Sudan, a nation scarred by memories of the Darfur genocide in the 2000s, is once again in the grip of a humanitarian crisis.
The Darfur region is trapped in a cycle of violence, with a recent escalation resulting in at least 1,000 deaths in just two days last week.
The violence is born from a power struggle between two Sudanese military factions, which unfolded in April. On one side stands the Rapid Support Forces (RSF), a formidable paramilitary force led by General Mohamed Hamdan Dagalo "Hemedti," which emerged from the notorious Janjaweed militias. On the other side is the Sudanese Armed Forces (SAF), led by General Abdel al-Burhan. At one time the factions were allies, but in 2022 after quashing Sudan's brief experiment with democracy, they turned on each other.
Today the RSF appears to be on top, now holding four of the five Sudanese army bases in the Darfur region, and in October it took control of Nyala and Zalingei. Their fighters have been accused of carrying out an ethnic cleansing campaign with the aim of eradicating the non-Arab Masalit community from West Darfur. Reports of executions and unrelenting sexual and gender-based violence against civilians have been described by the UN as “verging on pure evil.”
While bodies like the UN and Josep Borrell, the EU Foreign Policy Chief, have called for urgent international action to prevent “another genocide,” involvement from other nations has further complicated the situation. The United Arab Emirates, a steadfast ally of Hemedti, has supported Sudan's neighbour Chad with a substantial loan and military vehicles, purportedly for humanitarian aid but alleged to be largely armaments for the RSF. To make matters worse, the Wagner group, which has a powerful influence in Moscow, has already reportedly supplied anti-aircraft missiles to the RSF in its efforts, with the country’s gold riches in mind.
A distracted world is paying little attention to this war, which has claimed the lives of 9,000 people since fighting began and displaced a further 6 million. With international attempts at peacekeeping floundering and this genocidal militia primed to try and take the rest of the country, Sudan is heading for collapse.
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CZ COME, CZ GO
Another bad week for crypto as not one but two exchanges are penalised by the US Securities and Exchange Commission, one being Binance, whose CEO Changpeng Zhao AKA CZ is stepping down.
Zhao announced in a post on X/Twitter that he would “take responsibility” for “mistakes” made with Binance and resign, after both he and the exchange pled guilty to charges of helping users to bypass sanctions and criminals and terrorists to move money. According to the Financial Times, Binance stood accused of “acting as a conduit for the flow of money linked with child abuse, drugs, [and] financing to designated terrorist groups such as Hamas and al-Qaeda.”
Binance will pay $4.3bn in a settlement with the Department of Justice and will replace Zhao with a new CEO. The sentencing comes as SEC Chair Gary Gensler leads a clampdown on crypto, in a grim month for the once ascendant currency. Only a few weeks ago, fellow exchange founder Sam Bankman-Fried was also convicted of fraud.
The agency also sued the exchange Kraken this week for operating in a way that put “unlawful profits over investor protection.” The SEC claims it sees this sort of behaviour “far too often in this space."
A similar sentiment was expressed last year by Zhao, of all people, who said “the law is not going to prevent” illegal activity in crypto if there is will to engage in it. Crime has long been endemic to crypto, to the point that you might call it characteristic of the industry. Take NFTs for example: before their value cratered, scams ran rampant.
Zhao’s words have been borne out this week, though he probably wishes that he wasn’t the one proving them true.
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F1 GETS OFF TRACK IN VEGAS
For the first time since 1982, last weekend the bright lights of Las Vegas were made even brighter as the Formula One World Championship returned to Sin City. Formula One has already come under scrutiny for putting entertainment value above sporting, and this venue poured fuel on the fire of that debate, with criticism from drivers and fans alike.
At a press conference leading up to the event, current golden boy of the tour Max Verstappen said he felt like a ‘clown’ at the start-studded opening ceremony, called the venue ‘99% show, 1% race,’ and likened it to the ‘National League’ whereas ‘Monaco is the Champions League.’
Criticisms were also levelled at ticket prices and race times. This $500m event was the most expensive of any race thus far, with reports of £844 tickets for seats without a view of the track (although prices were slashed up to 60% the day before the race, suggesting organisers overestimated fan appetite for the event).
In part to accommodate European audiences, the race had an unpalatable start time: 10pm local time. This was particularly galling for the drivers who now travel directly to Abu Dhabi, 12 time zones away, for Sunday’s season finale. As Verstappen, rumoured to be paid £45m per season, explained, “it’s such a big time shift that, especially at the end of the season when everyone is already a bit tired, I think it’s a little bit much.”
However, he cheered right up after winning the race. “The fact that we had an amazing race, I think, makes it all up and I’m happy with that.” All’s well that ends well it seems, although with another four star-studded concerts surrounding next week’s finale and endless afterparty options, the sport vs entertainment debate isn’t over just yet.
And that’s it for this week. I hope you found something of interest that you might want to delve into further. If so, please get in touch at cwilkins@audleyadvisors.com.
For now, that’s The Weekend Box officially closed.