University leaders fail to assuage angry donors
The leaders of Harvard, M.I.T. and the University of Pennsylvania face increasing pressure after their disastrous testimony before Congress this week regarding antisemitism on college campuses. At issue: their legalistic responses on whether students calling for the genocide of Jews should be disciplined. (Liz Magill of Penn and Claudine Gay of Harvard later apologized for their testimony.)
Magill appeared the most vulnerable of the three as the school’s trustees debated her future — while the influential board of advisers at Wharton, the university’s business school, called on her to resign.
A firestorm over the testimony is growing in Washington and beyond. House Republicans announced an inquiry into the “learning environments” at the three schools, with the possibility of subpoenas. Doug Emhoff, the husband of Vice President Kamala Harris, said that the administrators’ “lack of moral clarity is simply unacceptable.”
Business leaders also expressed outrage. Ross Stevens, a hedge fund manager who has already criticized Penn’s curriculum, said he would withdraw a $100 million gift to the school. The billionaire investor Bill Ackman, who has publicly condemned Harvard students whom he said blamed Israel for the Oct. 7 Hamas attacks, called for the presidents of all three universities to be fired.
And David Wolpe, a prominent rabbi, resigned from Harvard’s antisemitism advisory committee, saying that anti-Jewish ideology was so entrenched that he did not think he could make the kind of difference he had hoped for.
Penn “requires new leadership with immediate effect,” Wharton’s board of advisers wrote in a letter to Magill this week. While the board can only make recommendations, its voice is influential: Its chair, Marc Rowan of Apollo Global Management, has called on alumni to withhold donations to Penn. Moreover, three Wharton board members — David Blitzer of Blackstone, Jamie Dinan of York Capital Management and Alberto Duran of Mundivox Communications — are also Penn trustees.
It isn’t clear what the Penn trustees will do with Magill. During an emergency call Thursday, they didn’t vote on whether to oust her, instead urging her and other school leaders to express the university’s values with greater clarity.
But some on the Penn board suggested that further action was needed: Gov. Josh Shapiro of Pennsylvania, a nonvoting member, urged fellow trustees to decide whether Magill’s testimony reflected the school’s values. “I expect they’ll be meeting again in the coming days, and I expect them to carefully weigh that question,” he told reporters.
The backlash against the Harvard and M.I.T. presidents hasn’t gone quite as far. Wolpe said that Harvard’s Gay was a “kind and thoughtful person” and stopped short of calling on her to resign. And M.I.T.’s executive committee said that Sally Kornbluth, the school’s president, had “our full and unreserved support.”
In related news: Sam Altman, the C.E.O. of OpenAI, wrote on X that he “was totally wrong” for saying that “antisemitism, particularly on the american left, was not as bad as people claimed.” He added, “i still don’t understand it, really. or know what to do about it.”
HERE’S WHAT’S HAPPENING
Britain’s antitrust watchdog will review Microsoft’s relationship with OpenAI. The Competition and Markets Authority said that it would begin to examine whether actions including Microsoft’s $10 billion investment in the maker of ChatGPT, which gave it a 49 percent stake in the company, represented an “acquisition of control” that amounted to a de facto merger. (Brad Smith, Microsoft’s president, said that his company’s relationship with OpenAI was “very different” from, say, Google’s takeover of the A.I. lab DeepMind.) The review is the most prominent effort yet to scrutinize the partnership between two leading A.I. developers.
Hunter Biden faces new tax evasion charges. A federal grand jury indicted President Biden’s son on Thursday, charging him with scheming to avoid paying federal taxes on millions in income from foreign businesses. This latest set of charges against Hunter Biden carries a maximum sentence of 17 years in prison if convicted.
Binance’s founder is ordered to stay in the U.S. before sentencing. A federal judge ruled that Changpeng Zhao was a flight risk, overturning a magistrate judge’s decision that the crypto magnate could return to Dubai, where his family lives. Zhao pleaded guilty last month to money-laundering charges as part of a wide-ranging settlement involving Binance, the world’s biggest cryptocurrency exchange.
A bankrupt trucking giant rejects a takeover bid. Yellow, which filed for Chapter 11 protection this summer, said that a proposal by a trucking executive to revive the business was “not viable.” Yellow added that the offer did not appear to have the backing of creditors, including the Treasury Department, which had extended a $700 million loan during the pandemic.
Nikki Haley continues to raise money from corporate leaders. Executives at Bain Capital and Solamere Capital will host a fund-raiser for the former South Carolina governor next week, according to Bloomberg, in the latest sign of Haley’s rise within the Republican presidential primary. Meanwhile, a super PAC backing Ron DeSantis canceled a donor event this week, reportedly because of a lack of interest.
The OpenAI director at the center of Altman’s ouster speaks
One of the central characters in the short-lived coup at OpenAI last month was Helen Toner, a researcher of artificial intelligence and a board member at the time who had clashed with Sam Altman, the company’s C.E.O.
A recap: Altman was fired and briefly hired by Microsoft; OpenAI employees — including the chief scientist who initially backed firing the C.E.O. — threatened to quit en masse; Altman was reinstated; and most of the board, including Toner, resigned. This all happened within five days.
In an interview with The Wall Street Journal, Toner didn’t get into specifics, but said that the board’s loss of trust in Altman meant that firing him would fulfill the organization’s aim of developing A.I. in a responsible way:
At one point during the heated negotiations, a lawyer for OpenAI said the board’s decision to fire Altman could lead to the company’s collapse. “That would actually be consistent with the mission,” Toner replied at the time, startling some executives in the room.
In the interview, Toner said that comment was in response to what she took as an “intimidation tactic” by the lawyer. She says she was trying to convey that the continued existence of OpenAI isn’t, by definition, necessary for the nonprofit’s broader mission of creating artificial general intelligence that benefits humanity at large. A simultaneous concern of researchers is that AGI, an AI system that can do tasks better than most humans, could also cause harm.We’d like your feedback! Please email thoughts and suggestions to [email protected].
“BlackRock was mentioned by some candidates in last night’s debate more than inflation or the national debt. That’s a sad commentary on the state of American politics.”
— Larry Fink, BlackRock’s C.E.O., on LinkedIn. Both Gov. Ron DeSantis of Florida and the entrepreneur Vivek Ramaswamy used the money management giant and its embrace of environmental, social and corporate governance concerns in investing, known as E.S.G., as political punching bags in Wednesday’s Republican primary debate.
Ralph Nader’s top C.E.O.s
The consumer advocate Ralph Nader has made a career out of criticizing corporations and C.E.O.s and advancing laws to make food, water, work and travel safer. Now the 89-year-old lawyer has shifted gears: He’s singing the praises of exceptional business leaders.
Nader’s latest book, “The Rebellious C.E.O.: 12 Leaders Who Did It Right,” examines the work of executives he thinks did a good job when they ran their companies, including The Body Shop’s Anita Roddick, Patagonia’s Yvon Chouinard and Vanguard’s John Bogle.
The book itself is an example of Nader’s rebellious streak: He told DealBook’s Ephrat Livni that publishers had encouraged him to write about corporate malfeasance, but instead he wanted to highlight principled business leaders.
“Young people think C.E.O.s are just judged by whether they meet market demand,” Nader said in an interview. “This book raises the expectation level.”
The C.E.O.s he has profiled, he said, meet five criteria.
They focused on workers. “Herb Kelleher, the former C.E.O. of Southwest Airlines, always called workers ‘my people’ and he prioritized them even over consumers, but the result was cordiality and a culture of ‘yes’ among staff that consumers could really feel.”
They spoke their mind in public. “Often, C.E.O.s sound like they are speaking from a script and have marbles in their mouths. But those in the book didn’t hesitate to articulate their positions. Roddick of Body Shop was withering on the beauty industry.”
They admitted their mistakes. “They did that to hasten the corrective process. After saying they were wrong, they were quicker to fix problems.”
They weren’t overly secretive. “They all shared their so-called trade secrets and ways of doing business. They rebelled against the proprietary-secret syndrome that can often mask wrongdoing.”
They showed restraint. “All paid attention to profits and knew that without them they could not be bold or take risks. But they did not put profits above all else and they didn’t overpay themselves.”
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