Is Your Data Safe With OpenAI?

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No to AI Arms Race - Pope Francis called for a ban on 'lethal autonomous weapons' at the G7 summit in Italy.

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DOJ vs Adobe - The DOJ filed a lawsuit alleging Adobe deceives users by hiding early-termination fees and making it hard to cancel subscriptions.  

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THE HOTTEST THING IN TECH
Is Your Data Safe With OpenAI?

In the space of a week, two major revelations have prompted many to seriously question the direction OpenAI is taking. First, the company announced the addition of former NSA Director reality Paul Nakasone to its board. Then news leaked that the company is considering restructuring to adopt a for-profit model outside of the control of its nonprofit board.

NSAi?

Former NSA employee and domestic mass surveillance whistleblower Edward Snowden has called Nakasone’s hiring a mask off moment. “They've gone full mask off: do not ever trust OpenAI or its products, there's only one reason for appointing an NSA director to your board. This is a willful, calculated betrayal of the rights of every person on earth. You've been warned."

So why did they bring him on? The official statement from board chair Bret Taylor was that his “unparalleled experience in areas like cybersecurity will help guide OpenAI in achieving its mission of ensuring artificial general intelligence benefits all of humanity." OK sounds legit right? But bear in mind this guy’s track record. Nakasone was in charge of mass surveillance at the NSA when the NSA outsourced illegal mass spying against Americans to British spy agencies to circumvent US constitutional protections. That move effectively endrun the constitution to give the NSA unlimited spying access to US networks to surveil US citizens. That doesn’t inspire a lot of trust.

Data Gold Rush

Snowden isn’t alone in his critique of this move. Johns Hopkins University cryptography professor Matthew Green tweeted, "I do think that the biggest application of AI is going to be mass population surveillance, so bringing the former head of the NSA into OpenAI has some solid logic behind it.” As Green has also said, putting the former NSA head (and retired general) on the board essentially signals that OpenAI is in fact open to doing business with the intelligence community and Department of Defence. In other words, open to giving the government access to your AI activity.

Not so Open

But its OK because OpenAI has that nonprofit mission of “ensuring AGI benefits all of humanity" right? Ah, maybe not for long. The company has confirmed the nonprofit is “core to our mission and will continue to exist.” Cool story, but its power to protect users’ rights will be exactly zero if users’ AI activity is routed through an entirely separate for-profit entity with all the shareholder and profit motive obligations that entails. The AI era is radically reshaping our online world and has reset the boundaries on data privacy and surveillance law. Companies will need to be increasingly careful about who they entrust their valuable AI-related data to moving forward.

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1. Cannabis/Hemp E-comm - New York - The first AI-Powered end-to-end online platform for the hemp industry - 2,000% growth in 2 years. (Seed+)

2. AI Agent Employees - New York - Sophisticated workflow automation for businesses, by a previously-exited founder. Building towards fully autonomous organizations. Backed by Tribe & Kenetic, rolling out to extensive waitlist. (Seed)

3. Outbound B2B Campaign AI Co-Pilot - Lexington, MA - Turn any CRM into an AI optimized sales agent for personalized customer campaigns. Founder previous exit to PE. Notable Angel on board. Top Hubspot App. Post revenue. (Seed)

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DEALS WE’RE WATCHING
Closed Deals:

Japan’s OpenAI - Tokyo foundational AI LLM startup Sakana AI raised ~$100M at a $1B led by NEA, Khosla Ventures, and Lux Capital.

Financial AI Data - UK company Finbourne raised a $70M Series B at $356M post-money led by Highland Europe and strategic backer AVP (the VC arm of insurance giant AXA). It helps financial companies organize and use more of their data in both AI models and financial models.

Deals to Watch:

SuSea Inc. - The Palo Alto AI search engine startup behind You.com is closing in on raising $50M Series B at $700-$900M to enter the AI Assistant market. It has 1B+ queries to date, and ARR is up 5x since Jan.