To explain, OpenAI as you know it is actually three companies, and its mission is, and I quote, to “create a safe AGI that is broadly beneficial,” which can refer to everything from a totally sentient artificial intelligence to, per Sam Altman, the “equivalent of a median human that you could hire as a co-worker.” OpenAI, Inc. is a 501(c)(3) Public Charity — a non-profit that owns and controls the managing entity, OpenAI GP LLC, which controls the holding company for the OpenAI nonprofit entity, which is the majority owner of OpenAI Global, LLC, which is the “capped” for-profit entity. It is the bizarre result of OpenAI’s 2019 move to a “capped” for-profit model — though one shouldn’t give them any credit, as investors are capped at one hundred times their initial investment.
While this may seem confusing, the ultimate result is that OpenAI is controlled at its heart not by its investors, but by a board of directors that doesn’t hold any equitySidenote: Currently, some in the valley are complaining about OpenAI’s board being “inexperienced,” as if tech’s boards of directors have traditionally done a good job. The same board that fired Steve Jobs was filled with prominent venture capitalists and executives, as was the board of WeWork, Theranos (which included military leaders and former secretaries of state), and Juicero. Jawbone, a company that went from a $3bn valuation to bankruptcy, had industry figureheads like Ben Horowitz, and doomed entertainment startup Quibi had the CEO of Condé Nast and the founding partner of top entertainment law firm Ziffren Brittenham LLP. In fact, I’d argue that the boards of major tech firms have overwhelmingly failed to police their companies, rarely, if ever, taking action against executives behaving badly.