Nov 22, 2023 - Business

Who is Larry Summers, the controversial pick to join OpenAI's board

Larry Summers in 2018. Photo: Mark Kauzlarich/Bloomberg via Getty Images

Larry Summers, a controversial former Treasury secretary and the president emeritus of Harvard University, is one of three men comprising the interim board of OpenAI.

Why it matters: Summers now holds enormous sway over the future of the organization that, more than any other, has driven the commercialization and widespread adoption of AI.

The big picture: Summers is an academic turned policymaker who subsequently embarked upon a highly lucrative part-time career as a board member and advisor to companies on Wall Street and in Silicon Valley.

  • He is is highly sought-after for his reputation as a brilliant economist and creative thinker and his network of contacts in the worlds of politics and finance.

Between the lines: Summers has found himself at the center of countless controversies, from the memo he wrote at the World Bank saying that "the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable" to the interest-rate bets he made that ended up costing Harvard $1 billion.

  • At Treasury in the 1990s, Summers led the charge to deregulate the derivatives market, fighting hard against colleagues like Brooksley Born and Paul Volcker. Those deregulated derivatives would later play a central role in the 2008 financial crisis. Summers also opposed the U.S. signing on to aggressive goals on carbon emissions.
  • Later, at Harvard, Summers gave a speech suggesting that when when it comes to the individuals with the greatest aptitude in science, men could vastly outnumber women.
  • Summers was reportedly friendly with sex offender Jeffrey Epstein, appearing on the flight logs of Epstein's private jet.

What they're saying: "There is no greater indication that OpenAI is unserious about the interests of humanity than their elevation of Larry Summers to its Board of Directors," says the Revolving Door Project's Jeff Hauser in a press release.

  • Journalists, wrote The New Yorker's John Cassidy upon Summers' 2010 departure from the White House, "aren't the only folks Larry considers intellectually beneath him. Such a category would include most members of President Obama's cabinet and their top policy advisers; many of his colleagues in the White House; virtually all foreign officials; ninety per cent of the Harvard faculty; and a similar proportion, or possibly higher, of his fellow academic economists."

The other side: Summers also has plenty of admirers. Former President Obama appointed him director of the National Economic Council and considered naming him chair of the Federal Reserve. President Biden has also sought out his advice.

  • Companies such as Citigroup and Nasdaq OMX Group have brought Summers on as a paid consultant. He earned $5.2 million just in 2008 from working one day a week at hedge fund DE Shaw, on top of $2.8 million from speaking engagements.
  • More recently he became very popular in Silicon Valley, sitting on the boards of Block and Lending Club and serving as an advisor to Jiko, PillPack, Andreessen Horowitz, Barry Silbert's Digital Currency Group (DCG), and others.
  • He has hailed digital currencies as being "new platforms for financial inclusion," adding that "Barry and his team at DCG are building an important platform with great potential to help these technologies reach mass adoption." That was before Silbert and DCG were charged with defrauding more than 230,000 investors of more than $1 billion.

The bottom line: Summers, winner of the prestigious John Bates Clark medal in economics and nephew of two economics Nobel laureates, is very smart, often wrong, and never in doubt.

  • He declined to tell Axios why he joined the board of OpenAI, how long he intends to stay on it, or what he hopes to achieve there.
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