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OpenAI is going Corporate and Public · Elon Musk Podcast

• 0:01
  Hey everybody, welcome back to the Elon Musk Podcast.
• 0:05
  This is a show where we discuss the critical crossroads that
• 0:08
  shape SpaceX, Tesla X, The Boring Company and Neuralink.
• 0:13
  I'm your host, Will Walden. Open AI is considering
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  transitioning to a for profit structure to give CEO Sam Altman
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  more control while retaining a core nonprofit mission.
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  This change would mean the board of directors currently part of
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  the non profit structure would lose authority over the new for
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  profit component. Now, the potential shift in
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  governance disclosed by Altman to some shareholders and
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  reported by The Information suggests plans to take Open AI
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  public. Altman might gain a stake in the
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  company, aligning with suggestions from several
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  shareholders to cement his position and prevent the board
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  from firing top executives. Now, Open AI has responded to
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  inquiries reiterating its commitment to his nonprofit
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  mission, they said. We remain focused on building AI
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  that benefits everyone. The nonprofit organization is
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  the core of our mission and will remain now.
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  One option under consideration is adopting a for profit benefit
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  corporation structure similar to competitors like Anthropic and X
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  AI. This type of structure allows a
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  balance between profit making and public benefit goals,
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  aligning with open AIS overarching mission.
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  And the discussion on restructuring comes amidst
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  internal corporate upheaval. Co founder voluntarily resigning
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  and criticisms from former employees and board members
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  highlight tensions within the company.
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  Helen Toner, a former board member, criticized the work
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  environment and a relationship with Altman, adding to the
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  narrative of internal discord. The company restructuring
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  scenario remains fluid. Altman and other directors may
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  opt for different approaches. This uncertainty follows
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  Altman's statement and the related report from The
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  Information, indicating that discussions and governance are
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  ongoing and not yet finalized. The company's past controversies
• 2:02
  also play a role in these considerations.
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  For instance, Elon Musk's lawsuit against Open AI in
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  February accused the company of abandoning its nonprofit motion
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  in favor of a for profit mission for the complicating the
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  governance landscape and Open a is current governance structure
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  involves the nonprofit board overseeing a for profit business
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  set up some experts find problematic.
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  Charles Elson, who has experience on various nonprofit
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  and corporate boards, suggest dissolving the nonprofit status
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  to resolve potential conflicts of interest and streamline
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  governance, and in response to these issues, Open AIS board has
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  undergone significant changes. After a standoff with the board
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  which led to Altman's temporary removal, a new three person
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  board was constituted, including Brett Taylor, Larry Summers and
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  Adam D'Angelo, the only remaining member from the
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  previous board. Now the new board, which is
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  chaired by Taylor, aims to stabilize the organization and
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  possibly reassess Open AIS governance structure.
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  Taylor indicated that revisiting the structure is a critical but
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  not immediate task. Open AI has declined.
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  For the comments on potential changes to us, we reached out to
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  them now to the current charter. The board's primary
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  responsibility is ensuring that AI development benefits
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  humanity, even at the expense of investors profits.
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  This mission, established with the creation of a capped profit
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  arm in 2019, has funded Open AI growth but remains contentious.
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  The nonprofit board's focus on mission over profit contrasts
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  with the objectives of for profit entities, which this
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  dichotomy poses challenges similar to those faced by other
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  technology oriented nonprofits like Mozilla.
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  Mozilla's dual board structure, created to manage both nonprofit
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  and for profit activities, serves as a potential model for
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  open AI. Mozilla Foundation and Mozilla
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  Corp operate with distinct but complementary goals, ensuring an
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  open Internet while generating revenue, demonstrating how
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  mission and profit can coexist. Governance responsibilities in
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  both nonprofit and for profit entities include leadership
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  oversight and executive compensation, but their
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  objectives differ significantly. Allison highlights this
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  mismatch, recounting similar challenges during his tenure at
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  the Investor Responsibility Research Center.
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  Clear reporting hierarchies are crucial, particularly in
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  organizations with dual missions like Open AI.
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  So John Hatta of the National Association of Corporate
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  Directors said that the need for defined authority lines to
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  prevent conflicts, as illustrated by the fallout from
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  Altman's temporary ousting, are important.
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  And the limitations of a nonprofit board's control over a
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  commercial entity's personnel under score the delicate balance
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  needed. University of Connecticut law
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  professor Minor Myers points out that the mobility of commercial
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  staff can undermine the nonprofit board's influence.
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  Now the question of whether opening eyes should function as
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  a ethical startup or a public service institution remains
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  unresolved. Mark Sermon of Mozilla said the
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  importance of refining the company's identity to ensure
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  alignment between its mission and its operational strategies
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  are key to success. A broader debate involves the
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  suitability of private governance for influential
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  entities like Open AI over Lyon from Sepharth.
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  Shaw suggests the public control might be more appropriate for
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  organizations shaping our future, questioning whether a
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  small group of individuals should wield this much power.
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  The ongoing discussions potential restructuring of Open
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  AI aim to address the complex governance issues in the future,
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  ensuring the company's mission aligns with its operational and
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  financial goals. And as Open AI navigates these
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  changes, the balance between nonprofit ideals and for profit
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  ambitions remains a constant challenge.
• 5:53
  Hey, thank you so much for listening today.
• 5:55
  I really do appreciate your support.
• 5:57
  If you could take a second and hit the subscribe or the follow
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• 6:05
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  miss an episode. And each episode is about 10
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• 6:13
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• 6:16
  to patreon.com/stage Zero. And please take care of
• 6:21
  yourselves and each other, and I'll see you tomorrow.