OpenAI Pivoting From "Benefiting Humanity" to "Making Lots of Money"

This week, OpenAI announced that it would be ripping control away from its nonprofit arm, finally putting to bed any appearance that the company is truly committed to developing an artificial general intelligence that would "benefit all of humanity."

While we don't know exactly what the ChatGPT maker's new structure will look like quite yet, it feels assured that CEO Sam Altman will end up with vastly more control over the company's operations.

Altman could also realize new equity worth billions of dollars as the company sidelines its nonprofit board.

In short, the company's namesake nonprofit roots are in the rearview mirror as it doubles down on making money. The company has turned into a cash magnet in a matter of just two years, going from a $14 billion valuation in 2021 to potentially $150 billion this year, according to its latest round of fundraising.

"We can say goodbye to the original version of OpenAI that wanted to be unconstrained by financial obligations," OpenAI safety researcher Jeffrey Wu told Vox.

"Restructuring around a core for-profit entity formalizes what outsiders have known for some time: that OpenAI is seeking to profit in an industry that has received an enormous influx of investment in the last few years," added Cornell Tech Policy Institute director Sarah Kreps in the same piece.

On Wednesday, Reuters reported that OpenAI was looking to restructure its core business into a "for-profit benefit corporation," putting it on a similar footing to its rivals like AI company Anthropic, itself started by former OpenAI staff.

The shakeup proved controversial, with a number of high-ranking executives including OpenAI's chief technology officer Mira Murati, VP of research Barret Zoph, and chief research officer Bob McGrew, abruptly announcing their departures.

The new structure could create entirely different and potentially dangerous incentives for investors.

"The general public and regulators should be aware that by default, AI companies will be incentivized to disregard some of the costs and risks of AI deployment — and there’s a chance those risks will be enormous," Wu told Vox.

The company started off in 2015 as a "nonprofit artificial intelligence research company" that was committed to advancing the tech "in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return."

In 2019, shortly after Altman took over the reins, OpenAI created a so-called "capped profit" subsidiary to raise some much-needed cash, while still limiting the amount of profit investors could get out of it.

Half a decade later, and the company looks practically unrecognizable. Its unabashed pursuit of multibillion-dollar cash injections has stripped it of its once benevolent and seemingly altruist sheen.

"In a way, all of the changes announced yesterday simply demonstrate to the public what has long been happening within the company," The Atlantic's Karen Hao wrote in a piece titled "OpenAI Takes Its Mask Off," referring to reports of the impending restructuring.

"The nonprofit has continued to exist until now," she added. "But all of the outside investment — billions of dollars from a range of tech companies and venture-capital firms — goes directly into the for-profit, which also hires the company’s employees."

The latest executive departures are far from the first upper talent OpenAI has lost ever since last year's power struggle, which saw Altman be fired, only to be rehired five days later. The company has also lost one of its original cofounders Ilya Sutskever, and a founding research scientist John Schulman.

In other words, massive executive shakeups have left a lot of control in the hands of the company's embattled but surviving CEO.

Hao argued that the latest reshuffling "suggests that Altman's consolidation of power is nearing completion."

"For the first time, OpenAI’s public structure and leadership are simply honest reflections of what the company has been — in effect, the will of a single person," she wrote. "'Just: Sam.'"

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