OpenAI needs open-heart surgery. The ChatGPT developer’s new board of directors and its briefly fired but now-restored CEO, Sam Altman, said last week that they’re trying to fix the unusual corporate structure that allowed four board members to trigger a near-death experience for the company.
The startup was founded in 2015 as a nonprofit, but it develops AI inside a capped-profit subsidiary answerable to the nonprofit’s board, which is charged with ensuring that the technology is “broadly beneficial” to humanity. To stabilize this unusual structure, OpenAI could take pointers from longer-lived companies with a similar arrangement—including introducing a second board to help balance its founding mission with its for-profit pursuit of returns for investors.
OpenAI deferred comment for this story to new board chair Bret Taylor. The veteran tech executive told WIRED in a statement that the board is focused on overseeing an independent review of the recent crisis and enhancing governance. “We are committed to a governance structure that takes all stakeholders into account,” Taylor says. “And we are actively working to develop an expanded board that has the diverse experiences needed to implement important changes and effectively oversee the organization.”
Altman told the Verge last week that the board will need a while to debate, research, and pressure-test potential changes.
If you take OpenAI’s mission at its word, the stakes couldn’t be much higher. The company aims to develop AI technology that makes machines with capabilities on par with—or exceeding—those of humans, potentially affecting nearly every job in the world. Even if it falls short of that goal, the way OpenAI governs itself could determine who prospers and who suffers from the rollout of world-shaping AI technologies like ChatGPT. At the same time, competitors like Google and Amazon aren’t bound to the same structural limitations as OpenAI.
“Does it want to be a startup that just has some ethical grounding? Or does it want to be a lasting public institution that is building AI in service of humanity?” asks Mark Surman, president of the Mozilla Foundation. “They need to get clear with themselves—and get clear with the world on what they really want to be.”
Thousands of companies globally—including OpenAI, retailer Ikea, and drugmaker Novo Nordisk, developer of Ozempic—are structured as what some business professors call enterprise foundations, whereby a nonprofit organization controls a company that has gone all in on capitalism. Some billionaires employ the setup to reduce their personal taxes; other projects use it to prioritize non-business goals, which OpenAI says is its case.
The exact technical implementation can vary widely, but Mozilla is a stable example of combining a humanitarian mission with for-profit ventures. Started in 2003, its foundation has a handful of for-profit subsidiaries that include Mozilla Corporation, which develops the Firefox web browser and receives sizeable payments from Google for promoting its search engine, and Mozilla.ai, a startup trying to encourage open source competition to OpenAI.
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