There are various different ways to make hundreds of millions of dollars, but historically 'starting a nonprofit' has not been one of them. Silicon Valley, however, has managed to find a way, at ChatGPT creator OpenAI.
Under the terms of the charter, which was written when the move to for-profit status was already being planned, OpenAI is "committed to providing public goods," while its "primary fiduciary duty is to humanity."The stated reason for moving to for-profit status was that the cost of AI research was so incredibly high that only a for-profit could raise the requisite amount of cash.
A slew of big-name for-profit venture capital firms, including Founders Fund, Andreessen Horowitz, Sequoia, and Tiger Global, are investing in OpenAI. All of them, by their nature, are going to want some kind of exit. While that's not easy under the charter, the investments wouldn't have happened if it were impossible.The company is structured so that the maximum return to early investors is 100x — if you put in $10 million, you can't take out more than $1 billion.
That's a way of OpenAI trying to have its cake and eat it — to generate the kind of returns that its VC backers need, while also staking a quasi-plausible claim to the moral high ground that caused researchers to flock there in the first place.
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