BREAKING: OpenAI's Going Closed (yes really)
Summary
TLDRThe video discusses major changes at OpenAI, focusing on its shift from a nonprofit to a for-profit structure, which could have significant implications for AI safety and accessibility. The script covers OpenAI’s original mission to ensure AI benefits all, the introduction of profit-driven goals, and leadership departures. It highlights tensions between nonprofit control and investor-driven interests, raising concerns that OpenAI may prioritize profits over safety. The restructuring includes Sam Altman now having equity, sparking concerns from the AI safety community about the company's future direction.
Takeaways
- 🤔 OpenAI has historically not open-sourced its models, despite providing significant research documentation.
- 😲 OpenAI's recent shift from nonprofit to a for-profit benefit corporation marks a dramatic change in its structure.
- 💼 Investors will now have fewer restrictions on profits, making OpenAI a more traditional investment opportunity.
- 🔄 The nonprofit entity will remain, but it will only hold a minority stake in the new for-profit structure.
- 🚨 The change raises concerns about how OpenAI will manage AI risks in a more profit-driven environment.
- 👨💼 Sam Altman now has equity in OpenAI, a significant shift since he previously didn't own any part of the company.
- 📉 The disbanding of the Super Alignment team, which focused on AI safety, has raised fears about OpenAI's commitment to its original safety goals.
- 🤑 OpenAI's for-profit shift could lead to increased focus on profits over safety, sparking concerns about the future of AI governance.
- 👋 Several leadership changes have occurred, including the departure of CTO Mira Murati and other key leaders.
- 📊 OpenAI's valuation has skyrocketed, with investors like Microsoft and others keenly watching this transition into a more traditional corporate structure.
Q & A
What changes has OpenAI made to its business structure recently?
-OpenAI is restructuring from a nonprofit to a for-profit benefit corporation, which will no longer be controlled by its nonprofit board. This change is aimed at attracting more traditional investors and enabling higher returns.
Why was OpenAI originally established as a nonprofit organization?
-OpenAI was originally founded to ensure AI development was safe and beneficial to all of humanity, rather than being controlled by a few large corporations with potentially unsafe practices.
What is the significance of Sam Altman now owning equity in OpenAI?
-Previously, Sam Altman did not own any equity in OpenAI to maintain impartiality. With the restructuring, he now owns a significant stake, which could be worth up to $150 billion, aligning his financial incentives more closely with the company's profitability.
How did OpenAI’s relationship with investors change due to the restructuring?
-Investors can now invest in OpenAI in a more traditional way without caps on returns. Previously, OpenAI had a hard cap on investment returns, limiting them to a maximum of 10x the initial investment.
What concerns have been raised about OpenAI's shift to a for-profit model?
-The shift to a for-profit model could lead to reduced emphasis on AI safety and accessibility, as profit incentives might overshadow the original mission of developing safe and beneficial AI for everyone.
What impact did the restructuring have on OpenAI's leadership team?
-Several key figures, including CTO Mira Murati, announced their departure. This suggests significant internal changes and a shift in leadership as OpenAI transitions into a new business structure.
How did the boardroom drama in 2022 affect OpenAI's structure?
-In 2022, the nonprofit board ousted Sam Altman due to a loss of trust and communication issues, but he was reinstated within five days due to overwhelming support from employees and investors. This incident highlighted the tension between the nonprofit board's goals and the company's direction.
What role did Microsoft play in OpenAI's recent changes?
-Microsoft, a significant investor in OpenAI, now has a seat on the board. Their involvement has raised concerns about the influence of large corporations on the direction of AI development at OpenAI.
What happened to OpenAI’s super alignment team?
-The super alignment team, which focused on keeping AI development aligned with human values and safety, was disbanded, raising concerns about OpenAI's commitment to long-term AI safety.
How does the new for-profit structure of OpenAI compare to other AI companies?
-The new structure resembles that of its rivals, such as Anthropic and Elon Musk's X.AI, which are also for-profit benefit corporations that aim to balance profitability with social responsibility and sustainability.
Outlines
🔍 OpenAI Shifts Away from Nonprofit Roots
The video opens by addressing a long-standing critique: despite its name, OpenAI is not truly open in terms of its models being closed-source. The company has maintained a nonprofit status, focused on benefiting humanity, but that structure has recently changed. This shift marks the end of an era for OpenAI, as it transitions towards a for-profit benefit corporation. The narrator expresses shock at the scale of the changes, especially given the past controversies around OpenAI. The transition is surprising, with the CTO leaving and Sam Altman set to earn more, reflecting a significant shift in OpenAI's core structure and goals.
📈 OpenAI's New Corporate Structure
OpenAI is restructuring into a for-profit benefit corporation to attract more traditional investors. Previously, OpenAI capped returns for investors, limiting potential profits. Now, with this cap removed, OpenAI becomes more appealing to investors, allowing greater financial gains. Despite this shift, the original nonprofit will remain, but with a minority stake in the new structure. Concerns arise about how this change might affect AI safety governance, one of OpenAI's founding principles. The restructuring may allow investors to focus more on profit than safety, raising questions about the company’s future direction.
⚖️ Tensions Between Nonprofit and For-Profit Structures
The video describes the tension between OpenAI's nonprofit board and its for-profit division. Initially, the nonprofit controlled decisions, but the for-profit section has grown more dominant, creating friction. This shift flips the original governance structure, with the corporation now leading while the board takes a backseat. The restructuring has sparked leadership changes, including the CTO's departure, further signaling the company's transformation into a profit-driven entity. This change mirrors moves by other AI companies, like Anthropic, as OpenAI seeks to maintain its competitive edge in the booming AI market.
🏢 Leadership Changes Amid OpenAI's Growth
OpenAI's leadership is undergoing major changes as it restructures. The company's longtime CTO, Mira Murati, and other key executives have left, raising questions about OpenAI’s future direction. These departures coincide with OpenAI's transition from a nonprofit to a for-profit model. The changes follow the company’s explosive growth, driven by ChatGPT's success, which attracted significant investor interest. OpenAI is shifting away from its original mission of making AI safe and accessible to all, prioritizing a more traditional business model that appeals to investors and aligns with its rapid expansion.
🚨 AI Safety and the Dismantling of Core Goals
The narrator highlights that OpenAI was founded to prevent AI from being monopolized by a few companies or developed unsafely. However, the company’s new for-profit direction risks undermining these original goals. OpenAI no longer offers open models, forcing users to rely on its closed infrastructure. Additionally, safety concerns are mounting as OpenAI disbands its super alignment team, which was dedicated to ensuring AI safety. With the nonprofit’s control reduced, OpenAI now resembles a typical startup focused on maximizing profits, sparking concerns among AI safety advocates.
⚠️ Safety Concerns as OpenAI's Mission Evolves
In the final part of the script, the narrator addresses concerns over OpenAI's mission. The company, which once aimed to make AI both safe and accessible, is now largely profit-driven. The nonprofit board, once a safeguard, has been sidelined, and Microsoft, one of the very companies OpenAI was wary of, now holds significant influence. The disbanding of the super alignment team raises additional fears about AI safety. The narrator acknowledges these concerns but remains cautiously optimistic, awaiting further developments as OpenAI continues to evolve in its new for-profit structure.
Mindmap
Keywords
💡OpenAI
💡Nonprofit to For-profit Transition
💡Sam Altman
💡AGI (Artificial General Intelligence)
💡Investor Caps
💡AI Safety
💡Super-alignment Team
💡Microsoft
💡Nonprofit Board
💡AI Accessibility
Highlights
OpenAI is transitioning from a nonprofit organization to a for-profit benefit corporation.
Historically, OpenAI was a nonprofit with a mission to ensure AI development benefitted humanity.
OpenAI's new structure is intended to attract more investors by removing the profit cap that previously limited returns.
The nonprofit branch will still exist, but will own a minority stake in the new for-profit corporation.
The restructuring has implications for AI safety governance, a key concern that led to the formation of OpenAI.
Sam Altman, previously without equity in OpenAI, will now own a significant stake potentially worth up to $150 billion.
This shift in OpenAI's structure echoes moves by its competitors, like Anthropic and Elon Musk's xAI, which are also for-profit entities.
Mira Murati, OpenAI's CTO, has announced her departure amid the restructuring.
OpenAI's superalignment team, focused on ensuring AI safety, has been disbanded, raising concerns about future governance of AI risks.
Microsoft, a significant investor, now holds a seat on the OpenAI board, increasing concerns about corporate influence over AI development.
OpenAI's nonprofit board originally controlled decisions to ensure AI safety, but this is no longer the case after the restructuring.
The board's decision to fire Sam Altman in late 2023 highlighted tensions between profit motives and AI safety concerns.
Despite concerns about safety and accessibility, OpenAI has continued to make advances in AI development and open-source research.
Sam Altman tweeted his gratitude towards Mira and other departing leaders, noting leadership changes as natural in fast-growing companies.
OpenAI is experiencing significant internal leadership shifts, with new leaders like Mark, Josh, and Matt Knight taking on key roles in the restructured company.
Transcripts
we've been making memes about how open
AI is not really open for a long time
now and it's true open AI is one of the
major providers of models that doesn't
open source their models so you can't
run them yourself they've open sourced a
lot of info about how the models work
they've been great about documenting
their research but open AI itself has
been providing closed Source software
through their services for quite a while
that all said they still were a
nonprofit the actual company structure
was that with a board that was
specifically dedicated to bettering
Humanity as a nonprofit charitable org
that just changed and I really didn't
think it would happen it's an
unbelievable shift especially after all
the drama last year that Prime and I
covered with like 20 videos it's come to
an end and here's the results I didn't
think this was actually going to happen
holy I saw earlier today that the
CTO Mira was leaving but I didn't
realize it was this big oh God I think
it's only fair if Sam Alman is going to
make more money that I am too so let's
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Theo sent you chat gbt maker open AI is
working on a plan to restructure its
Core Business into a for-profit benefit
corporation that will no longer be
controlled by its nonprofit board people
familiar with the matter told Reuters in
a move that'll make the company more
attractive to investors the way that
open AI handles investors right now is
interesting most companies investors buy
a percentage with the hopes of being
able to sell that percentage at some
point in the future open a had an
interesting rule where profits on
investment were capped they had a hard
cap I think it was 10x so once if you
invested a million dollars and you could
sell it for 10 million you couldn't make
more than 10 million on that sale so
this is a huge change because now
investors can invest in a much more
traditional way without these weird caps
and whatnot on the Investments huge
shift very strange and unex expected the
open AI nonprofit will continue to exist
and own a minority stake in the
for-profit company the move could also
have implications for how the company
manages AI risks in a new governance
structure that's the main concern a big
part of why open AI was formed in the
first place was to make sure that AI
development and advancement wasn't a
thing that like two big companies made a
bunch of money off of and didn't care to
bother with the safety side it was a
combination of AI should benefit all and
the best AI should be safe and those two
things were huge core parts of why open
AI was formed in the first place and
then they got so far ahead of everyone
else so early that it was hard for them
to not make money and now they're in the
weird position of having a CEO that
knows how to make money at businesses in
the original nonprofit board not liking
the direction of the company all the
drama that happened and now this it's
weird for a nonprofit to become the
industry lead in something and it makes
sense they're no longer a nonprofit but
God this is a weird scenario also have
not is that Sam Altman for the first
time now has equity in open AI crazy
enough Sam Altman didn't own any part of
open AI before so if they did really
well or poorly he might make a bit more
money but that was about it open aai was
not a company he owned stock in versus
like me I own a huge portion majority
portion of the things that we built with
ping Labs so upload thing marker thing
pick thing all those things as part of
ping I own over half of he owned zero
now he owns quite a bit more in fact the
amount he owns could be worth up to $150
billion after the restructuring as it's
also trying to remove the cap on returns
for investors which I mentioned before
there's that weird cap where you can
only make a certain multiplier on top we
remain focused on building AI that
benefits everyone we're working with our
board to ensure that we're best
positioned to succeed in our mission the
nonprofit is core to our mission and it
will continue to exist because the
structure right now before these changes
go in place for those who haven't kept
up with all of this is the open aai
board has stayed a fully nonprofit
entity and the open AI company where all
the engineers work and all the building
happens that is a company that reports
to the board underneath it so the board
is the ones who say what goes they're
the actual owners and decision makers
they have all the the voting shares of
the openai corporation but the open aai
corporation that can make money that
does all the work that does all these
things operates separately and that
separation was starting to cause tension
between the groups and now they are
separating entirely it actually seems
like it flipped where the corporation's
on top now and the board reports to them
as like a voter but they don't make the
decisions anymore the details of the
proposed corporate structure for
reported by Reuters highlight
significant governance changes happening
behind the scenes at one of the most
important AI companies they even call
out the Mira leaving thing that I
mentioned before the plan is still being
hashed out with lawyers and shareholders
and the timeline for completing the
restructure remains uncertain the
restructuring also comes amid a series
of leadership changes at the startup
open ai's longtime Chief technology
officer Mira mad abruptly announced her
departure from the company on Wednesday
Greg Brockman open ai's president has
also been on leave founded in 2015 as a
nonprofit AI research organization
openai added the for-profit openai lp
entity in 2019 as a subsidiary of its
nonprofit securing capital for Microsoft
to fund its research as I mentioned the
openai profitable part was a subsidiary
of the nonprofit the company captured
Global attention with the launch of chat
gbt in late 2022 which was a generative
AI app that spit out human-like
responses to text queries which became
one of the fastest growing applications
in history with over 200 million weekly
active users igniting Global race to
invest in AI along with chat gbt success
open ai's valuation is skyrocketed from
14 billion in 2021 to 150 billion in the
new convertible debt round under
discussion which is attracting investors
such as Thrive capital and apple the
company's unusual structure which gives
full control of the for-profit
subsidiary to the open AI nonprofit was
originally set to ensure the mission of
creating safe AGI that is broadly
beneficial referring to artificial
general intelligence that is at or
exceeding human intelligence as I
mentioned before the goal of open AI was
to create safe artificial general
intelligence that was available for
anyone to use so it wasn't just
Microsoft Apple and Facebook that had it
and no one else could the structure came
into focus last November during one of
the biggest boardroom dramas in Silicon
Valley members of the nonprofit board
ousted Altman over a breakdown in
communication and a loss of trust he was
reinstated after 5 days with
overwhelming support from employees and
investors what a crazy 5 days that was I
had a friend visiting and I had to spend
the entire time in my my room filming
and editing videos about the open AI
drama I really hope that's not about to
start again don't make me do this again
guys please
please since then open ai's board has
been refreshed with more Tech Executives
chaired by Brett Taylor former
Salesforce co-ceo who now runs his own
AI startup any corporate changes need
approval from its nine-person nonprofit
board the removal of nonprofit control
could make open AI operate more like a
typical startup a move generally
welcomed by its investors who have
poured billions into the company however
it could also raise concerns from the AI
safety Community about whether the lab
still has enough governance to hold
itself accountable in its pursuit of AGI
as it has dissolved the super alignment
team that focused on the long-term risks
of AI earlier this year I will say for
the conspiracy theorists and the people
who are really terrified of AI and AI
safety stuff you have quite the bullet
list to be scared about right now like
let's just go through first we have open
AI formed to make safe AGI for all the
reason it was formed is because there
was concern from these really smart
scientist folks including people like
Alman Elon Musk and many more that doing
AI safely was not a guarantee and that
lots of people developing I stuff could
do it in a way that would destroy
humanity and even if they didn't but it
was only made by a couple companies then
it wouldn't benefit all of humanity just
the bottom lines of those few companies
because of those concerns they formed
open AI to fight those concerns the
concerns being two parts the two major
concerns we one AI made for profit might
not be safe enough and the safety could
potentially destroy Humanity if people
are just trying to make money they might
leave safety aside and then get
destroyed point two is that powerful AI
should not be restricted to a small
number of Rich companies because if the
only people in the world that have ai
are like two to three big businesses
that's a massive unfair Advantage for
them that could destroy the economy
imagine if only three companies could
make websites terrifying so the two
things that open AI was formed to
prevent were unsafe Ai and a small
number of companies owning the best AI
these are the two reasons openai was
formed so let's go down the rabbit hole
here openai makes the LP for profit
section to make development faster for
profit part takes investments from the
very companies they were scared of and
here's where I think the conspiracy
theorists are going to start feeling
things because the original goal of
forming open AI to prevent these things
from happening started to feel like it
was being lost with the change of the
for-profit section but that was okay
because they still reported to the
nonprofit so anybody saying like oh open
AI is now going to be the problem they
were built to prevent well the open AI
nonprofit board is still the one in
control so is it that big a deal yeah it
is but it wasn't that bad at the time
time but then that for-profit section
started to take huge investments from
companies like Microsoft wait what about
that second part is Microsoft going to
get the thing that we didn't want them
to get well once we started releasing
the models open AI starts releasing
models with no way to run them yourself
and that was a big deal because as we've
MD many a time open AI has closed models
you cannot use their models the way you
want want to you have to use them via an
API on their infrastructure compared to
a lot of open models like llama from
meta or all the crazy things mistol is
doing there's a lot of open model
options that you have access to if you
want to run a model on your own Hardware
maybe embedded on a device stuff like
that open AI nope they do not allow that
which means the other goal of powerful
AI should not be restricted to a small
number of Rich companies we went from
believing that to not very quick here
almost alarmingly so on the other hand
to lightly defend them they did open
source all of their research they
published a lot of papers and a lot of
theories in the concept of an llm which
is a huge part of how these other open
source models could be created they
followed in the footsteps of the work
open AI did make public so they did
Advanced the ecosystem and they allowed
for other models to exist but their own
model their own best and of the best is
not something others have access to
which hurts 0 2 a lot but at least the
nonprofit still runs things right at
least they'll keep it safe
right well nonprofit Board gets
concerned about safety and incentives
Sam doesn't respond so board fires Sam
because at this point in time the board
was still in control and the board was
still people who were aligned with these
two goals and this is the point of the
board this is the board doing its job if
this is where it ended there' be no
conspiracy cuz they did their job they
kept AI at open AI safe and accessible
to all and instead of letting the
incentives of profit drive them in a way
that makes these two things problems but
then outrage brings Sam back OG board is
largely fired so the board didn't get to
do its job the board didn't get to have
its ultimate control where they decided
hey if the things are going in a
direction that we feel as unsafe or
potentially problematic we're going to
step in they can't and a large part of
why they were forced out as the board
was the investors at places like
Microsoft putting their weight behind it
so the whole point of keeping Rich
companies and money out of the best of
the best of AI has now flipped and that
same money they were concerned about
could be argued to be how the open AI
board collapsed which is insane but at
the very least they promised they would
continue to maintain the existing goals
but they promised the goals would not
change so again the goals are safety and
everyone has access we haven't touched
too much on the safety but now we have
to because the super alignment team gets
disbanded this was the team at open AI
That's whole thing was just keeping the
models in the AI in alignment with what
humans needed so their job was just
everything they had to do to keep AI
safe and from going haywire and killing
all of humans and that team has been
disbanded Ilia quits as well Ilia was
the Russian lunatic Super Smart Genius
who invented a lot of the techniques
that became modern Ai and it's also
really into the security and safety side
of AI he was heavily involved with the
super alignment team I think he actually
ran it and he was also originally on the
board before he got removed because he
was one of the ones pushing to get Sam
removed so now it looks like that safety
goal is starting to crumble too but to
go back to the goal two The Profit goal
now the super alignment team is
disbanded oh also I should mention here
that uh Microsoft now has a board seat
Ilia quits super elment team gets
disbanded and now much later open
AI is moving the nonprofit to a minority
shareholder
position so through this absurd process
we went from open AI being formed to
maintain these two goals to open AI
being traditional for-profit business
that has a lot of financial incentives
to up these two goals
so despite the initial structure of the
fully open company with the nonprofit
board so we've managed to get position
everybody was concerned about where the
company with the best AI is driven by
profit and might not have the right
incentives around safety and is making
things that are restricted to just the
best companies in the world so I think
it's fair to say the original two goals
open AI was founded on might not be as
deep in the blood of open AI anymore
especially goal two here but we need to
be keeping our eyes out for goal one I'm
not a conspiracy theorist I haven't seen
anything convincing enough to have me
scared about the future of AI tools
trying to kill humans but if you're one
of the people that is an extremist on
that here you go you you have your you
have your order of events to feed your
conspiracy brain and I fully understand
and now that they have a much stronger
for-profit drive safety is one of those
things that gets left behind when you're
driving profit pretty often so uh this
might be bad back to the article it's
unclear how much Equity Altman will
receive Alman already a billionaire from
his multiple startup Investments has
previously stated that he chose not to
take an equity stake in the company
because the board needed a majority of
disinterested directors with no stake in
the company he's also said he has enough
money and is doing it because he loves
the work the new structure of open AI
would resemble that of its major rival
in thropic as well as elon's XII which
are registered as benefit corporations a
form of for-profit that aims to promote
social responsibility and sustainability
in addition to making
profits we'll see how that goes and with
everything going as fast as it does Sam
has just tweeted once again literally
minutes ago we need to cover this oh boy
this seems to be a comment more on mea
leaving but this will certainly give us
more context on everything going on
Meera has been instrumental to open ai's
progress and growth for the last 6.5
years she has been a hugely significant
factor in our development from an
unknown research lab to an important
company when mea informed me this
morning that she was leaving I was
saddened but of course I support her
decision for the past years she has been
building out a strong bench of leaders
that will continue our progress I also
want to share that Bob and Barrett have
decided to depart open AI mea Bob and
Barret made these decisions
independently of each other and amicably
but the timing of Mirror's decision was
such that it made sense to now do all of
this at once so that we can work
together for a smooth hand over to the
next generation of leadership I am
extremely grateful to all of them for
their contributions being a leader at
open AI is all consuming on one hand
it's a privilege to build AGI and be the
fastest growing company that gets to put
our Advanced research in the hands of
hundreds of millions of people on the
other hand it's Relentless to lead a
team through it they've gone above and
beyond the Call of Duty for the company
Mark's going to be our new SVP of
research and will now lead the research
org in partnership with Jacob as Chief
scientist this has been our long-term
succession plan for Bob someday although
it's happening sooner than we thought I
couldn't be more excited that Mark is
stepping into the role Mark obviously
has deep technical expertise but he's
also learned how to be a leader in
manager in a very impressive way over
the past few years Josh is going to take
on a new role as head of mission
alignment working across the company to
ensure we get all pieces in culture
right to being a place to succeed at the
mission Kevin and three will continue to
lead the applied team Matt Knight will
be our chief information security
officer having already served in this
capacity for a long time spent our
planing for quite some time Mark Jacob
Kevin S Matt and Josh will all report to
me me being Sam I have over the past
year or so spent most of my time in the
non-technical parts of our organization
I'm now looking forward to spending most
of my time on the technical and product
parts of the company very interesting
that has been stuck doing non Tech stuff
and this shift is so he can go back in
the weeds again leadership changes are a
natural part of companies especially
companies that grow so quickly and are
so demanding I obviously won't pretend
it's natural for this one to be so
abrupt but we're not a normal company I
think the reasons Mira explained to me
there's never a good time anything not
abrupt would have leaked she wanted to
do this while open AI was in an upswing
all of these things made sense for it to
be now we can both talk about this more
tomorrow during all hands thank you all
for your hard work and dedication Sam
kind of nuts that they're doing a full
restructuring internally and definitely
lends Credence to the leak info we just
read from Reuters because it seems like
they're ready to fundamentally change
how open works and go all in on Startup
mode very very interesting I have
concerns
but yeah we'll see where this one ends
up I'm using CLA right now anyways but
I'm curious what y'all think do you like
the open AI drama are you tired of me
covering this and until next time peace
nerds
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