OpenAI, Creator of ChatGPT Cannot Use ChatGPT to Discover the Right Corporate Structure

You can’t make this up: “OpenAI Board of Directors Evaluates Our Corporate Structure to Best Support the Mission of Enabling Artificial General Intelligence (AGI)1 benefits all humanity, with three objectives.” Yes, the board of directors of a $157 billion company is still “evaluating” its corporate structure!

OpenAI Board of Directors Evaluates Our Corporate Structure to Best Support the Mission of Enabling Artificial General Intelligence (AGI)¹ benefits all humanity, with three objectives:

1. Choose a nonprofit/for-profit structure that best suits the long-term success of the mission.
2. Make the nonprofit sustainable.
3. Equip each arm to do its part.

We have a nonprofit and a for-profit organization today, and we will continue to have both, with the success of the for-profit allowing the nonprofit to be well-funded , better supported and in a stronger position for the mission.

We view this mission as the most important challenge of our time. This requires simultaneously advancing the capabilities, security, and positive impact of AI around the world. In this article, we share the history of our current structure, why we think change is needed, and what specific change we are considering.

OpenAI is in trouble because most of the founding partners are those who believe in the unadulterated supremacy of technology above all else. Yes, provided they can extend the Pythagorean postulate that the universe is made up of numbers, and can further put it into practice by resolving market frictions, everything will fall into place.

Unfortunately, this is an illusion and OpenAI is learning the hard way. If they had incorporated this company as a for-profit company, the pioneer of generative AI would not experience this paralysis. But that wasn’t the case because they became a non-profit and now want to evolve and transform into a different breed of business. Unfortunately, this is not an easy thing, because the law is clear: if you dissolve that nonprofit, the assets transfer to another nonprofit or the state for the public good.

Of course, how do you get $157 billion back to the government? This is why the Council continues to “evaluate” because it does not have clear answers. When they’re done, a simple costume will put them back in order.

Many years ago, to fund my personal non-profit organization on electronics in Africa (via African Technology Institutiona 501c3 charitable organization, which supported electronics education at 112 universities, click afrit.org for photos), I read the order from the United States Internal Revenue Service. Quickly, it became clear that it was better to make money and use the profits to support whatever charity he was interested in, rather than starting a non-profit organization directly for that purpose. That’s what lawyers will tell you because you never know tomorrow. So you will have the Mastercard Foundation, the Intel Foundation, etc. funded by Mastercard, Intel, etc.

The creator of ChatGPT cannot use ChatGPT to discover the correct business structure because it is higher than ChatGPT’s paid calculation level. But if they had asked a recent law graduate, they might have been able to get away with it. And that brings me to the message: hire these lawyers, pay them, because they will keep you out of trouble. Today I sent two documents to two different lawyers (yes, I use two), and I was happy when they came back independently: “Prof, it’s ready”, “Sir, everything is there ‘looks good’.

Good people, respect lawyers because they serve as high priests on the altars of governments, even if you are a technological prodigy.

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