OpenAI paid Kenyan workers less than $2 per hour

Thursday, 19 January 2023

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Good morning!

Where would the tech industry be today without the abrasive and inhumane treatment of hardworking contract employees who toil day and night to make billions of dollars for founders and their shareholders?

Maybe there wouldn't have been a tech industry to start with.

From the practice of Amazon in its factories to the child workers in China, the stories of tech companies creating modern-day work plantations have been with us for years. But especially when these plantations are in countries with fewer regulations and more poverty, the situation is even direr.

In large part, it's members of these communities who uphold these abrasive working conditions at times forcing their brothers and sisters to work harder for lesser pay. Other times they advise these tech giants to pay their brothers and sisters less. I know this because I have worked on such a modern plantation, in another life.

The new report, a product of an investigation into the creation of OpenAI's ChatGPT reveals that Kenya contractors employed by OpenAI's partner Sama paid them "a take-home wage of between $1.32 and $2 per hour depending on seniority and performance."

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Below are the tech stories and news you need to know to start your day, carefully curated by Technext.

Summary of the news

South Africa's Flow has raised $4.5 million
Microsoft said it would lay off 10,000 employees
Venture Capital funding in crypto startups declined by 75% in Q4 2022
Elon Musk is auctioning Twitter's office equipment
OpenAI used Kenyan workers on less than $2 per hour to make ChatGPT less toxic

South Africa's Flow raises $4.5m pre-series A

South African prop-tech startup Flow, which is focused on helping real estate developers, and agencies grow their business via social media marketing, has announced the raise of $4.5 million in a pre-Series A round today. This brings its total funding to almost $6 million, Technext reports.

The latest funding round was led by Futuregrowth Asset Management with $2 million. It also received backing from Endeavor Harvest Fund and serial entrepreneur Steven Heilbron. Other investors participating in this financing round included Kalon Venture Partners, Vunani Fintech Fund, and Buffet Investments.

Speaking on the new investment, Amrish Narrandes, Futuregrowth Asset Management head of Private Equity and Venture Capital, said:

We share Daniel and Gil’s vision to bring the property industry into the 21st century and know they have the expertise and experience to make it happen — and we’re pleased to be able to be part of a South African company taking bold steps that will bring much-needed change to an essential global industry.

We’ve keenly followed Flow’s progress in South Africa and Australia and integration into the B2B side of the global property industry as the next natural step in the company’s evolution.

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Microsoft is laying off 10,000 employees

Microsoft said Wednesday that it’s letting go of 10,000 employees through March 31 as the software maker braces for slower revenue growth. The company is also taking a $1.2 billion charge in the fiscal second quarter, which will result in a negative impact of 12 cents to adjusted earnings per share, CNBC reports.

Alphabet, Amazon and Salesforce are among the technology companies that have lowered head count in recent weeks. The contraction comes after demand for cloud computing and collaboration services picked up as enterprises, government agencies and schools encouraged remote work to reduce Covid exposure.

Rising prices have prompted companies to become more careful about technology spending, hurting prospects for the tech stocks that outperformed other market sectors year after year. Now Microsoft and its peers are taking stock. In July Microsoft said it will trim less than 1% of employees, and in October it confirmed an additional round of job cuts that reportedly affected fewer than 1,000 workers.

“I’m confident that Microsoft will emerge from this stronger and more competitive,” CEO Satya Nadella told employees in a memo that was posted on Microsoft’s website. The move will reduce Microsoft’s head count by less than 5%, and some employees will find out this week if they’re losing their jobs, he wrote.

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Blockchain startups got 75% less funding in Q4 2022

Recent trends suggest that crypto startups are passing through a difficult phase in attracting private financiers. Venture Capital (VC) funding took a hit in the general technology space towards the end of 2022, and the blockchain sector wasn’t exempted from this downturn.

According to data from research firm Pitchbook, in the last quarter of 2022, investment in crypto startups fell by 75% compared to the same time in 2021, and the lowest since 2020, Technext reports.

This has brought to the fore conversations surrounding whether this is just a resilience test of the nascent blockchain technology or the hype and buzz surrounding it is finally fizzling out.

Only $2.30 billion was invested into crypto startups in Q4 2022, a 75% drop from the same period in 2021. However, the figures do not entirely reflect how VC funding went in the crypto space in 2022.

The PitchBook data says a record $26.7 billion was invested in blockchain startups in 2022, the majority of which came in the first quarter due to enthusiasm for cryptocurrencies which was high at that point. Compared to 2021, that figure represents a slight increase from $21.2 billion raised in the year.

Twitter auctions office equipment

Elon Musk bought Twitter, a social media behemoth, for $44 billion in October. Now, after a turbulent few months as the billionaire makes cuts to the company, Twitter is selling off small items from its San Francisco offices — including espresso machines, phones and desks — in an auction, the Washington Post reports.

Now you, too, can have a piece of Twitter’s offices. There’s a comfy-looking leather sling lounge chair with bidding at about $1,450 as of Wednesday morning. Also: a slick semi-auto espresso machine for $4,700 and a large neon sign depicting the blue Twitter bird logo — yours for about $23,000.

Some 631 lots of “surplus corporate office assets” are up for sale, organized by auction firm Heritage Global Partners, including the whiteboards and projectors from Twitter’s downtown Market Street headquarters. There’s a conference phone for $225 and a rolling stand for $150. The auction will end later Wednesday.

A former Twitter product chief, Kevin Weil, wrote that it was “wild to see the Twitter office on auction,” adding: “Great memories from a different era.”

OpenAI may have operated a plantation in Kenya to Make ChatGPT Less Toxic

When OpenAI first built ChatGPT, it was riddled with toxic language. In its quest to make ChatGPT less toxic, OpenAI used outsourced Kenyan labourers earning less than $2 per hour, a new TIME magazine report reveals.

OpenAI’s outsourcing partner in Kenya was Sama, a San Francisco-based firm that employs workers in Kenya, Uganda and India to label data for Silicon Valley clients like Google, Meta and Microsoft. Sama markets itself as an “ethical AI” company and claims to have helped lift more than 50,000 people out of poverty.

The data labellers employed by Sama on behalf of OpenAI were paid a take-home wage of between $1.32 and $2 per hour depending on seniority and performance. For the story, TIME magazine said that it reviewed hundreds of pages of internal Sama and OpenAI documents, including workers’ payslips, and interviewed four Sama employees who worked on the project. All the employees spoke on condition of anonymity out of concern for their livelihoods.

In a statement, an OpenAI spokesperson confirmed that Sama employees in Kenya contributed to a tool it was building to detect toxic content, which was eventually built into ChatGPT. The statement also said that this work contributed to efforts to remove toxic data from the training datasets of tools like ChatGPT.

“Our mission is to ensure artificial general intelligence benefits all of humanity, and we work hard to build safe and useful AI systems that limit bias and harmful content,” the spokesperson said.

“Classifying and filtering harmful [text and images] is a necessary step in minimizing the amount of violent and sexual content included in training data and creating tools that can detect harmful content.”