Back in 2023, a CEO elected to fire almost 80% of his company's workforce as part of an artificial intelligence (AI) push.
Two years on, he spoke to Fortune about the controversial decision to mass terminate his staff.
What's happening?
IgniteTech is a software mergers and acquisitions firm, and Crunchbase described its mission as "delivering on the promise to save and stabilize its acquired software."
In other words, IgniteTech functions much like private equity firms, buying up assets on the cheap and seeking to maximize profits through any means necessary.
Broadly, private equity organizations have drawn criticism due to their disproportionate role in facilitating business bankruptcies. The business model has been blamed for the downfall of Toys "R" Us, Joann Fabrics, and Party City, and it has even crept into healthcare billing.
Eric Vaughan, IgniteTech's CEO, claimed to have had an epiphany of sorts in early 2023.
Vaughan was abruptly seized by the idea that generative AI would usher in an "'existential' transformation" at every level of enterprise, and he was immediately convinced most at IgniteTech weren't "on board" with his sudden pivot, Fortune reported.
Consequently, Vaughan chose to tear "the company down to the studs" and axe the majority of IgniteTech's talent — a decision he told the outlet he stood behind today. Throughout 2023 and into 2024, he oversaw a broad-scale staff replacement.
It wasn't expressly clear whether IgniteTech's replacement for staff was entirely by way of hiring or if AI tools were selected to pick up some of the slack, and Vaughan "declin[ed] to disclose a specific number" to Fortune.
However, he asserted that his mass-firing strategy was ultimately beneficial to those sent packing, adding that he believed "most people hate learning."
TCD Picks » Upway Spotlight
💡Upway makes it easy to find discounts of up to 60% on premium e-bike brands
|
Do you worry about companies having too much of your personal data? Click your choice to see results and speak your mind. |
Absolutely 👍 "The pace of change is so fast that it's the kinder thing to force people through it," Vaughan said.
Why does it matter?
You'd be hard-pressed to identify a bigger buzzword in the current moment than "AI," and tech titans like Meta CEO Mark Zuckerberg have admitted to scrambling to "catch up" while pouring immense resources into developing related products.
Buckets of money can do a lot, but earlier this month, Zuckerberg conceded that even with vast amounts of capital, technological development is slower than tech firms would like.
IgniteTech isn't alone in betting it all on generative AI while the nascent technology has yet to catch up to its promises, and this particular frenzy has a steep environmental cost.
OpenAI is the company behind the contentious, globally popular LLM known as ChatGPT. In August, OpenAI introduced GPT-5, its newest model, and again failed to disclose its usage rates for electrical power and water.
On the first day of GPT-5's release, researchers at the University of Rhode Island's AI lab determined that while GPT-3 consumed enough energy to power a light bulb for two minutes when completing a query, GPT-5's energy consumption came closer to 18 minutes.
"I can safely say that it's going to consume a lot more power than GPT-4," University of Illinois professor Rakesh Kumar said.
What's being done about it?
Although little can be done about private expenditure in the AI gold rush, calls for transparency are constant.
Individuals can contact their elected representatives to demand oversight of an emerging industry — and decarbonizing the grid would go a long way to accommodating the energy demands of generative AI.
Join our free newsletter for weekly updates on the latest innovations improving our lives and shaping our future, and don't miss this cool list of easy ways to help yourself while helping the planet.
Cool Picks
