IMO: The inability to prosecute OpenAI for these things is proof that the AI industry is already "too big to fail". Why didn't HuggingFace try to seek legal liability against OpenAI when it had explicit confirmation that they had been hacked? Because HF understands that it needs OAI and the rest of the AI industry to continue to exist and be in good legal standing, for the interest of HF's own self preservation. This is what it means for something to be too big to fail.

>>Why didn't HuggingFace try to seek legal liability against OpenAI when it had explicit confirmation that they had been hacked? Because HF understands that it needs OAI and the rest of the AI industry to continue to exist and be in good legal standing

But also, what was the material damage to HuggingFace? AFAICS, it rapidly increased their profile to the point that Jensen claims he paid too much for HF, because he bought right after the hack.

HuggingFace's opinions shouldn't be a blocker.

If I run over your mailbox maybe we can come to an agreement where you don't sue me, but if I was driving recklessly I've still committed a crime that you cant absolve me from.

It should be the same re: losing control of your agents.

Less “too big to fail” and more the ecosystem is too circular. OpenAI could blow up and it wouldn’t take out the economy in the way the banks would have in 2008. It would create a world of hurt for VCs and their LPs but that’s a fairly isolated ecosystem in terms of the whole economy. Theres a lot of thinking saying better they impose now and wipe out on the private market than letting them go public and this is a public market problem.

I don't think it's so much "too big to fail" as it is the fact that all of the AI companies have been similarly reckless in their drive for frontier AI. So if you establish the precedent that an AI company can be held legally liable for its recklessness, well, all of them can be held liable, and those costs start to add up fast.

HuggingFace can’t file criminal charges, including under the Criminal Fraud & Abuse Act. Only district attorneys can do that- or the federal equivalent.

Being bought by nvidia also probably helped...

I don't know if OpenAI's necessarily too big to fail. It could simply evolve and make a few changes - switch back to its original goal, fire everyone at the company who has spent more than an afternoon on Stanford's campus - and probably succeed with burning a lot less cash.

Remember, the original idea for OpenAI was to make open (thus the name) AI models that could only generate a maximum return of 100x for the investors. There was none of this hyperscaling, proprietary technologies, pure profit motive, etc. until later on.

I think it ultimately comes down to ideology. Simple financial math has nothing to do with it and never has. SV and DC, at least today, have a lot of beliefs in common. It can really be summed up as "divine right of CEOs". These are the "best and brightest" who came from the right parts of the country, who went to the right schools (even if they didn't finish their degrees), and ran in the right circles. They don't simply receive the opportunity to make unfathomable wealth and power; they're owed it. If they do something, by default, it must be right, and if a circumstance comes in their way, it's the circumstance that is wrong.

That's why you don't see a small motorcade of black Chevy Suburbans headed to these companies' headquarters from the local DHS field office. They aren't wrong; the expectation that the AI agent doesn't hack into government websites is wrong.