In an effort to amplify its objective of benefitting all, OpenAI is transitioning into a fully profit-driven enterprise.
In an effort to amplify its objective of benefitting all, OpenAI is transitioning into a fully profit-driven enterprise.
The crucial detail about OpenAI, as per OpenAI itself, is that its sole objective is to tackle "the most significant issue of our era" with the aim of bettering humanity and the planet as a whole.
This stance remains unchanged, OpenAI declared in a communique on a Friday, despite its transformation from a nonprofit-controlled corporation into an independent corporation that heavily funds a related nonprofit.
So, how does this transformation aid OpenAI in its objective of enriching all mankind and non-human entities? The answer is simple. The current setup does not empower the Board to take into account the interests of those who back the mission. Under the revamped structure, OpenAI's management will now be able to attract additional funds and focus on the requirements of the billionaires and tech giants that invest in it. In essence, everyone profits.
Unmentioned in the public statement is the fact that a year ago, the non-profit board struggling to control OpenAI attempted to oust CEO Sam Altman for "outright deceit" that, according to former board member Helen Toner, impeded the board from ensuring that the company's "public good mission surpassed profits, investor interests, and other considerations."
With its new structure, OpenAI aims to preserve an altruistic facade. The for-profit company will be incorporated as a Delaware Public Benefit Corporation, enabling its board to consider the impact of its actions on various stakeholders, including employees and customers, alongside its commitment to shareholders (Legal experts have highlighted that regular corporations also possess the freedom to do so).
Delaware Public Benefit Corporations with public listings include Laureate Education, which operates a series of for-profit universities worldwide, including one that was accused multiple times of misleading students about the cost of its degree programs (Laureate sold Walden University prior to the university settling a class action lawsuit earlier this year for $28.5 million). Another is Lemonade Inc., an insurance company that once advertised and then swiftly apologized for an AI feature it claimed could detect fraudulent customers by analyzing their facial features.
Mixed with its saving-the-world rhetoric in the announcement, there's an evident indication that the new company intends to raise even more funds to continue its pursuit of artificial general intelligence (AGI). According to reports from The Information, OpenAI and Microsoft have defined AGI as systems capable of generating at least $100 billion in profits. After all, what better measure of intelligence is there?
The fate of the nonprofit responsible for overseeing the company isn't entirely clear, although it certainly won't be pinching pennies. It never adhered to conventional nonprofit norms to begin with, having expended $137 million in donated funds from Elon Musk and other tech tycoons, in addition to more than $100 million in free computing from Google, Microsoft, and others, to create generative AI systems beneficial to for-profit corporations.
Once the corporate transition is finalized, the nonprofit will no longer have governance responsibilities at OpenAI but will receive shares in the new for-profit company and be "one of the most richly-resourced non-profits in history," according to OpenAI's announcement. This will allow it to "support charitable initiatives in sectors like healthcare, education, and science."
Needless to say, these charitable endeavors are bound to bring benefits for all of us sooner rather than later.
The transformation of OpenAI into an independent corporation allows it to seek further funding for its aspirations in artificial intelligence, specifically in the pursuit of artificial general intelligence, which they aim to define as systems generating at least $100 billion in profits. In the future, OpenAI's objectives of bettering humanity and the planet will intertwine with its financial goals, as its new structure attracts investments from tech giants and billionaires.