AI non-profit OpenAI is no longer exactly a non-profit, after deciding to spin off a profit-making arm that will bankroll its original mission.
OpenAI was created back in 2015 by a suite of tech luminaries, including Elon Musk and Peter Thiel, with the mission to develop AI that would benefit mankind as a whole, not ultimately incinerate it.
The founders bankrolled it to the tune of $1bn, and its initial goals included building agents that could understand natural language, and solve a variety of games, as well as developing a robot to do basic housework.
Since then it has launched a series of research papers and products, most recently GPT2, a text generating AI that is supposedly so good at what it does that the organisation considered it too dangerous to release in full. No word on that robot though.
But OpenAI wants to do much, much more, which means scaling faster than it had originally planned. Which will take cash, and lots of it.
“We’ll need to invest billions of dollars in upcoming years into large-scale cloud compute, attracting and retaining talented people, and building AI supercomputers,” the organisation said yesterday.
Apart from the costs of building supercomputers and running up enormous AWS bills, it’s hard to attract top-notch researchers when traditional firms are able to dangle the carrot of equity.
The solution it has arrived at is to create a “capped-profit” company, called OpenAI LP. The original organisation will be called OpenAI Nonprofit. The LP will solicit investment, and promise “capped” returns for investors, while “any returns beyond that amount—and if we are successful, we expect to generate orders of magnitude more value than we’d owe to people who invest in or work at OpenAI LP—are owned by the original OpenAI Nonprofit entity.”
It perhaps gives an insight into the sort of returns typical in Silicon Valley that the capped return is a mere 100X on any original investment. The company adds, “We expect this multiple to be lower for future rounds as we make further progress.”
However, the move was not uniformly well received by observers, with a smattering of comments of Twitter noting the timing between the non-open sourcing of GPT2 a few weeks ago, and the out of the blue decision to form a for-profit organisation.
The new company will be steered by former Y Combinator chief Sam Altman, as CEO, Greg Brockman as chairman and CTO, and chief scientist, Ilya Sutskever, who will all sit on the non-profit’s board. Musk is “not formally involved”, having left the board of the non-profit just over a year ago.
According to yesterday’s statement, OpenAI LP employs around 100 people looking at “capabilities (advancing what AI systems can do), safety (ensuring those systems are aligned with human values), and policy (ensuring appropriate governance for such systems.” And, yes, it’s hiring.