This is an audio transcript of the FT News Briefing podcast episode: ‘Mr OpenAI goes to Washington’
Marc Filippino
Good morning from the Financial Times. Today is Tuesday, June 18th, and this is your FT News Briefing.
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French business leaders are super worried about the country’s upcoming elections. And Dubai is trying to get more rich people to cash in on its man-made islands. Plus, OpenAI is brushing up on its copy of How to Win Friends and Influence People. I’m Marc Filippino and here’s the news you need to start your day.
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French President Emmanuel Macron called parliamentary elections a little bit more than a week ago after his centrist coalition got creamed in European elections. Since the announcement, corporate bosses in France have been in a pickle. You see, Macron’s centrist alliance has been pretty good to businesses. But now corporate leaders are afraid they’re gonna lose, which means they have two options. They can line up behind Marine Le Pen’s far right, or they can line up behind the far left. And currently, corporate leaders are swinging right. Senior executives told the FT they see Le Pen’s party as the lesser of two evils. They view it more as a blank slate that they can influence. Corporate leaders are also worried about far left’s plans to increase taxes. We’ll start to get a clearer idea of where things may be headed after the first round of voting, come June 30th.
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Every company needs three things to succeed: a great product, great marketing, and a solid lobbying effort, maybe? Tech darling OpenAI is testing out that formula. The company has already built the industry standard AI chatbot, ChatGPT, and managed to reach millions of users. So all that’s left is the lobbying, right? Here with me to discuss how OpenAI is making inroads in legislatures around the globe is the FT’s technology reporter, Cristina Criddle. Hi, Cristina.
Cristina Criddle
Hi, Marc.
Marc Filippino
So, Cristina, how has OpenAI been beefing up its lobbying efforts? I mean, how many people are on the team?
Cristina Criddle
Well, it’s really hard to ramp things out very quickly. So it’s gone from about three at the start of last year to 35 staff on the global affairs team now. And they’re not just building up in the US. They’re doing this in the UK, Ireland, Belgium, France, places where tech regulation is being spoke about quite a lot. But then further afield, Singapore, Brazil and India, it’s actually OpenAI’s most international team.
Marc Filippino
How does this compare to its competitors like Google and Meta?
Cristina Criddle
So OpenAI has about 1200 employees, so it’s still a pretty small team in comparison to the whole company. And compared to big tech companies, it’s definitely not got as large a lobbying operation. But Meta spent about $7.6mn engaging with the US government on lobbying issues, while Google spent 3.1mn. And that compares to OpenAI’s 340,000. So it’s quite a big difference but obviously Google and Meta have been in the game for a lot longer, and they’re kind of old hands at this.
Marc Filippino
Was there something that forced OpenAI to re-examine its lobbying team?
Cristina Criddle
Well OpenAI just burst onto the scene with ChatGPT, like it was really sudden. And I think when that happened, the attention from regulators and lawmakers came quite quickly. I spoke to one employee there who was saying, you know, we had so many requests from really high level people, heads of state, even, and nobody who could just speak to them on the phone about this technology. So there was just this flood of interest, and obviously now there’s lots of discussion about what shape regulation is gonna take.
Marc Filippino
I think one of the funny things about this is that it wasn’t that long ago that OpenAI’s founder, Sam Altman, was talking to lawmakers about regulating AI more forcefully. Is this a little bit of be careful what you wish for?
Cristina Criddle
I think they were trying to get ahead of the game. They knew that this was going to be a really hotly debated subject. They knew that technology was gonna be at the heart of it. And interestingly, they are now switching their tone a little bit and saying, we really do want regulation, but we want the flexibility to innovate. So they still want to be able to make these tools, and they want to make sure that regulation isn’t so rigid and so prescriptive that it might limit technology in the future. So if there was a new technological advancement that the old laws wouldn’t be outdated. That’s their argument anyway.
Marc Filippino
So Cristina, Meta chief executive Mark Zuckerberg and other big tech names have appeared before Congress probably more times than I can count at this point. What are some of the lessons OpenAI can learn from social media when it comes to playing nice with lawmakers?
Cristina Criddle
I think it’s a double-edged sword because OpenAI basically has this view of social media. They’ve been able to see what’s happened to companies like Meta, and they’ve been able to basically build their operation knowing how Meta has fallen down or where it’s done well and shape it around that. But at the same time, OpenAI has said that it’s experiencing a lot of negativity from lawmakers and regulators because of the social media age, because there were all these mistakes that happened during the social media buzz, and they don’t want to come across in the same way.
Marc Filippino
Cristina Criddle is a technology reporter for the FT. Thanks, Cristina.
Cristina Criddle
Thank you.
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Marc Filippino
A couple of decades ago, someone had the idea of building a bunch of artificial islands off the coast of Dubai. It was called the World Islands project, and the goal was to provide private homes for the super-rich. Now the project wasn’t finished, but today it’s being revived. Chloe Cornish is the FT’s Gulf business correspondent and she joins me now. Hi, Chloe.
Chloe Cornish
Hey there.
Marc Filippino
So what can you tell me about these islands, Chloe, and how did they come about and what’s the history there?
Chloe Cornish
Dubai had a massive property boom in the very early 2000s. There were lots of famous people who seemed to be popping up in Dubai, and the market was really hot. So at the time, the state decided to try to repeat its success that it had had with the Palm Jumeirah, which is a palm tree shaped archipelago that has been built off the coast of Dubai. They wanted to repeat that with another project. This one was going to be called the World Islands project. And the hope was that these little islands would be bought up by private developers and then populated with hotels or houses, resorts.
Marc Filippino
But something went wrong. What went wrong?
Chloe Cornish
Unfortunately, just as things were about to get started with building, the global financial crisis of 2008 rippled around the world, and that had a big impact on Dubai’s property market. So it stopped being really a good investment. For the most part, it’s just sand, sand in the middle of the ocean and nothing had really happened until recently.
Marc Filippino
So, Chloe, what’s going on with these islands today?
Chloe Cornish
So some of them have new developments going up. Because the Dubai property market has been on fire for the past couple of years, more ultra luxury properties like $10mn plus properties were sold in Dubai than anywhere else in the world last year. This has made investors think maybe we could make these islands into a profitable investment by building homes on them. I went to see the site where 24 luxury villas are going to be built and the idea that the developers have is that these will be probably used as summer homes, or rather, winter homes for wealthy families. They’ll have to commute there by boat because there’s no other way to get to the island. There is no infrastructure at all on these islands, so all of that is gonna have to be built by the developer.
Marc Filippino
And does that look like it’s gonna happen?
Chloe Cornish
Yeah. So there’s nothing on the island yet. The son of property billionaire Hussain Sajwani, who is leading the development, his name is Ali Sajwani, and he took me out to have a look at them a few weeks ago. But the idea is that they will get building started. Ali told me that he has bookings for all 24 of the villas. And then there’s a special extra big one, extra expensive one that is still in negotiations. So it seems like people do want to buy them.
Marc Filippino
Yeah, buying them is one thing, but what about making this project successful? I mean, are there concerns that this could just be a repeat of the previous mistakes?
Chloe Cornish
Well, you know, this has been tried before, and surely it’s gonna be difficult to find people that are willing to boat out to their home. It takes that around 15 minutes to get from Dubai mainland to this island. But there is demand from investors for these ultra expensive properties in Dubai. Ali, the developer, thinks that he will make a 30 per cent return on his investment in these islands. Ali actually described the World Islands as having been this sort of forgotten and unloved child, and it kind of shows the confidence that these developers have that they think that they can bring it back.
Marc Filippino
Chloe Cornish is the FT’s Gulf business correspondent. Thanks, Chloe.
Chloe Cornish
You’re welcome.
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Marc Filippino
Before we go, investor Bill Gross really made his mark with his rare stamp collection over the weekend. It sold for more than $19mn. The most prized item was a $0.01 stamp from 1868. It went for a little over $4mn, which is the highest price a single US stamp has ever been sold for. Gross is a founder of the bond house Pimco, and he is known as the “bond king”. But maybe after this he’ll go by the “stamp king”, too.
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You can read up on these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.
