AI Daily Digest
    TechCrunch
    TechCrunch
    @techcrunch
    20/11/2023

    Investors are souring on OpenAI's nonprofit governance model | TechCrunch

    The knock-on effects could be substantial OpenAI was never quite like other generative AI startups — or other startups period, for that matter. Its governance structure is unique and w

    Investors are souring on OpenAI's nonprofit governance model | TechCrunch

    The knock-on effects could be substantial

    OpenAI was never quite like other generative AI startups — or other startups period, for that matter. Its governance structure is unique and what ultimately led to the abrupt ousting of CEO Sam Altman on Friday.

    Even after it transitioned from a nonprofit to a “capped-profit” company in 2019, OpenAI retained an unusual structure that laid out in no uncertain terms what investors could — and couldn’t — expect from the startup’s leadership.

    For example, OpenAI backers’ returns are limited to 100x of a first-round investment. That means that if an investor puts in $1, for example, they’re capped to $100 in total returned profit.

    OpenAI investors also agree — in theory, at least — to abide by the mission of the nonprofit guiding OpenAI’s commercial endeavors. That mission is to attain artificial general intelligence (AGI), or AI that can “outperform humans at most economically valuable work” — but not necessarily generating a profit while or after attaining it. Determining exactly when OpenAI has achieved AGI is at the board’s sole discretion, and this AGI — whatever form it takes — is exempted from the commercial licensing agreements OpenAI has in place with its current customers.

    How OpenAI described its operating structure in the pre-turmoil days. Image Credits: OpenAI

    OpenAI’s dual, mission-driven structure was aspirational, to say the least, inspired by effective altruism and intended to clearly delineate the company’s profit-making efforts from its more ambitious, humanistic goals. But investors didn’t count on the board exercising its power in the way it did. Neither did many employees, it seems.

    Sourcehttps://techcrunch.com/2023/11/20/openai-governance-model-investors/

    Disclaimer & Legal Notice

    The opinions expressed in this article are the author's own and do not necessarily reflect the editorial policy of the site. We only aggregate the content, if you are interested in removing it, please contact us.
    Avatar

    TechCrunch

    https://techcrunch.com

    TechCrunch | Reporting on the business of technology, startups, venture capital funding, and Silicon Valley

    © 2023

    Featured news

    FindnewAI
    FindnewAI
    The Best 14 AI Email Assistants For More Responses In 2023
    Bigdataanalyticsnews
    Bigdataanalyticsnews
    Supercharging Connectivity: Exploring the Benefits of 5G Technology - Big Data Analytics News
    Olhar Digital
    Olhar Digital
    Os captchas estão com os dias contados; entenda

    Feeds

    AI-summary
    AI-summary
    Trending news about Artificial Intelligence
    Forbes
    Forbes
    The world’s leading voice for entrepreneurial success and free enterprise, and home to breaking news, business, money and more.
    Venture Beat
    Venture Beat
    Obsessed with covering transformative technology.