OpenAI has finally shared details about its plans to shake up its core business by shifting to a for-profit corporate structure.
On Thursday, OpenAI posted on its blog, confirming that in 2025, the existing for-profit arm will be transformed into a Delaware-based public benefit corporation (PBC). As a PBC, OpenAI would be required to balance its shareholders’ and stakeholders’ interests with the public benefit. To achieve that, OpenAI would offer “ordinary shares of stock” while using some profits to further its mission—”ensuring artificial general intelligence (AGI) benefits all of humanity”—to serve a social good.
To compensate for losing control over the for-profit, the nonprofit would have some shares in the PBC, but it’s currently unclear how many will be allotted. Independent financial advisors will help OpenAI reach a “fair valuation,” the blog said, while promising the new structure would “multiply” the donations that previously supported the nonprofit.
“Our plan would result in one of the best resourced nonprofits in history,” OpenAI said. (During its latest funding round, OpenAI was valued at $157 billion.)
OpenAI claimed the nonprofit’s mission would be more sustainable under the proposed changes, as the costs of AI innovation only continue to compound. The new structure would set the PBC up to control OpenAI’s operations and business while the nonprofit would “hire a leadership team and staff to pursue charitable initiatives in sectors such as health care, education, and science,” OpenAI said.
Some of OpenAI’s rivals, such as Anthropic and Elon Musk’s xAI, use a similar corporate structure, OpenAI noted.
Critics had previously pushed back on this plan, arguing that humanity may be better served if the nonprofit continues controlling the for-profit arm of OpenAI. But OpenAI argued that the old way made it hard for the Board “to directly consider the interests of those who would finance the mission and does not enable the non-profit to easily do more than control the for-profit.
Artisan CEO Jaspar Carmichael-Jack defended the campaign’s messaging in an interview with SFGate. “They are somewhat dystopian, but so is AI,” he told the outlet in a text message. “The way the world works is changing.” In another message he wrote, “We wanted something that would draw eyes—you don’t draw eyes with boring messaging.”
So what does Artisan actually do? Its main product is an AI “sales agent” called Ava that supposedly automates the work of finding and messaging potential customers. The company claims it works with “no human input” and costs 96% less than hiring a human for the same role. Although, given the current state of AI technology, it’s prudent to be skeptical of these claims.
Artisan also has plans to expand its AI tools beyond sales into areas like marketing, recruitment, finance, and design. Its sales agent appears to be its only existing product so far.
Meanwhile, the billboards remain visible throughout San Francisco, quietly fueling existential dread in a city that has already seen a great deal of tension since the pandemic. Some of the billboards feature additional messages, like “Hire Artisans, not humans,” and one that plays on angst over remote work: “Artisan’s Zoom cameras will never ‘not be working’ today.”
Over the past week, OpenAI experienced a significant leadership shake-up as three key figures announced major changes. Greg Brockman, the company’s president and co-founder, is taking an extended sabbatical until the end of the year, while another co-founder, John Schulman, permanently departed for rival Anthropic. Peter Deng, VP of Consumer Product, has also left the ChatGPT maker.
In a post on X, Brockman wrote, “I’m taking a sabbatical through end of year. First time to relax since co-founding OpenAI 9 years ago. The mission is far from complete; we still have a safe AGI to build.”
The moves have led some to wonder just how close OpenAI is to a long-rumored breakthrough of some kind of reasoning artificial intelligence if high-profile employees are jumping ship (or taking long breaks, in the case of Brockman) so easily. As AI developer Benjamin De Kraker put it on X, “If OpenAI is right on the verge of AGI, why do prominent people keep leaving?”
AGI refers to a hypothetical AI system that could match human-level intelligence across a wide range of tasks without specialized training. It’s the ultimate goal of OpenAI, and company CEO Sam Altman has said it could emerge in the “reasonably close-ish future.” AGI is also a concept that has sparked concerns about potential existential risks to humanity and the displacement of knowledge workers. However, the term remains somewhat vague, and there’s considerable debate in the AI community about what truly constitutes AGI or how close we are to achieving it.
The emergence of the “next big thing” in AI has been seen by critics such as Ed Zitron as a necessary step to justify ballooning investments in AI models that aren’t yet profitable. The industry is holding its breath that OpenAI, or a competitor, has some secret breakthrough waiting in the wings that will justify the massive costs associated with training and deploying LLMs.
But other AI critics, such as Gary Marcus, have postulated that major AI companies have reached a plateau of large language model (LLM) capability centered around GPT-4-level models since no AI company has yet made a major leap past the groundbreaking LLM that OpenAI released in March 2023. Microsoft CTO Kevin Scott has countered these claims, saying that LLM “scaling laws” (that suggest LLMs increase in capability proportionate to more compute power thrown at them) will continue to deliver improvements over time and that more patience is needed as the next generation (say, GPT-5) undergoes training.
In the scheme of things, Brockman’s move sounds like an extended, long overdue vacation (or perhaps a period to deal with personal issues beyond work). Regardless of the reason, the duration of the sabbatical raises questions about how the president of a major tech company can suddenly disappear for four months without affecting day-to-day operations, especially during a critical time in its history.
Unless, of course, things are fairly calm at OpenAI—and perhaps GPT-5 isn’t going to ship until at least next year when Brockman returns. But this is speculation on our part, and OpenAI (whether voluntarily or not) sometimes surprises us when we least expect it. (Just today, Altman dropped a hint on X about strawberries that some people interpret as being a hint of a potential major model undergoing testing or nearing release.)
A pattern of departures and the rise of Anthropic
Anthropic / Benj Edwards
What may sting OpenAI the most about the recent departures is that a few high-profile employees have left to join Anthropic, a San Francisco-based AI company founded in 2021 by ex-OpenAI employees Daniela and Dario Amodei.
Anthropic offers a subscription service called Claude.ai that is similar to ChatGPT. Its most recent LLM, Claude 3.5 Sonnet, along with its web-based interface, has rapidly gained favor over ChatGPT among some LLM users who are vocal on social media, though it likely does not yet match ChatGPT in terms of mainstream brand recognition.
In particular, John Schulman, an OpenAI co-founder and key figure in the company’s post-training process for LLMs, revealed in a statement on X that he’s leaving to join rival AI firm Anthropic to do more hands-on work: “This choice stems from my desire to deepen my focus on AI alignment, and to start a new chapter of my career where I can return to hands-on technical work.” Alignment is a field that hopes to guide AI models to produce helpful outputs.
In May, OpenAI alignment researcher Jan Leike left OpenAI to join Anthropic as well, criticizing OpenAI’s handling of alignment safety.
Adding to the recent employee shake-up, The Information reports that Peter Deng, a product leader who joined OpenAI last year after stints at Meta Platforms, Uber, and Airtable, has also left the company, though we do not yet know where he is headed. In May, OpenAI co-founder Ilya Sutskever left to found a rival startup, and prominent software engineer Andrej Karpathy departed in February, recently launching an educational venture.
As De Kraker noted, if OpenAI were on the verge of developing world-changing AI technology, wouldn’t these high-profile AI veterans want to stick around and be part of this historic moment in time? “Genuine question,” he wrote. “If you were pretty sure the company you’re a key part of—and have equity in—is about to crack AGI within one or two years… why would you jump ship?”
Despite the departures, Schulman expressed optimism about OpenAI’s future in his farewell note on X. “I am confident that OpenAI and the teams I was part of will continue to thrive without me,” he wrote. “I’m incredibly grateful for the opportunity to participate in such an important part of history and I’m proud of what we’ve achieved together. I’ll still be rooting for you all, even while working elsewhere.”
This article was updated on August 7, 2024 at 4: 23 PM to mention Sam Altman’s tweet about strawberries.
Enlarge/ Elon Musk and Sam Altman share the stage in 2015, the same year that Musk alleged that Altman’s “deception” began.
After withdrawing his lawsuit in June for unknown reasons, Elon Musk has revived a complaint accusing OpenAI and its CEO Sam Altman of fraudulently inducing Musk to contribute $44 million in seed funding by promising that OpenAI would always open-source its technology and prioritize serving the public good over profits as a permanent nonprofit.
Instead, Musk alleged that Altman and his co-conspirators—”preying on Musk’s humanitarian concern about the existential dangers posed by artificial intelligence”—always intended to “betray” these promises in pursuit of personal gains.
As OpenAI’s technology advanced toward artificial general intelligence (AGI) and strove to surpass human capabilities, “Altman set the bait and hooked Musk with sham altruism then flipped the script as the non-profit’s technology approached AGI and profits neared, mobilizing Defendants to turn OpenAI, Inc. into their personal piggy bank and OpenAI into a moneymaking bonanza, worth billions,” Musk’s complaint said.
Where Musk saw OpenAI as his chance to fund a meaningful rival to stop Google from controlling the most powerful AI, Altman and others “wished to launch a competitor to Google” and allegedly deceived Musk to do it. According to Musk:
The idea Altman sold Musk was that a non-profit, funded and backed by Musk, would attract world-class scientists, conduct leading AI research and development, and, as a meaningful counterweight to Google’s DeepMind in the race for Artificial General Intelligence (“AGI”), decentralize its technology by making it open source. Altman assured Musk that the non-profit structure guaranteed neutrality and a focus on safety and openness for the benefit of humanity, not shareholder value. But as it turns out, this was all hot-air philanthropy—the hook for Altman’s long con.
Without Musk’s involvement and funding during OpenAI’s “first five critical years,” Musk’s complaint said, “it is fair to say” that “there would have been no OpenAI.” And when Altman and others repeatedly approached Musk with plans to shift OpenAI to a for-profit model, Musk held strong to his morals, conditioning his ongoing contributions on OpenAI remaining a nonprofit and its tech largely remaining open source.
“Either go do something on your own or continue with OpenAI as a nonprofit,” Musk told Altman in 2018 when Altman tried to “recast the nonprofit as a moneymaking endeavor to bring in shareholders, sell equity, and raise capital.”
“I will no longer fund OpenAI until you have made a firm commitment to stay, or I’m just being a fool who is essentially providing free funding to a startup,” Musk said at the time. “Discussions are over.”
But discussions weren’t over. And now Musk seemingly does feel like a fool after OpenAI exclusively licensed GPT-4 and all “pre-AGI” technology to Microsoft in 2023, while putting up paywalls and “failing to publicly disclose the non-profit’s research and development, including details on GPT-4, GPT-4T, and GPT-4o’s architecture, hardware, training method, and training computation.” This excluded the public “from open usage of GPT-4 and related technology to advance Defendants and Microsoft’s own commercial interests,” Musk alleged.
Now Musk has revived his suit against OpenAI, asking the court to award maximum damages for OpenAI’s alleged fraud, contract breaches, false advertising, acts viewed as unfair to competition, and other violations.
He has also asked the court to determine a very technical question: whether OpenAI’s most recent models should be considered AGI and therefore Microsoft’s license voided. That’s the only way to ensure that a private corporation isn’t controlling OpenAI’s AGI models, which Musk repeatedly conditioned his financial contributions upon preventing.
“Musk contributed considerable money and resources to launch and sustain OpenAI, Inc., which was done on the condition that the endeavor would be and remain a non-profit devoted to openly sharing its technology with the public and avoid concentrating its power in the hands of the few,” Musk’s complaint said. “Defendants knowingly and repeatedly accepted Musk’s contributions in order to develop AGI, with no intention of honoring those conditions once AGI was in reach. Case in point: GPT-4, GPT-4T, and GPT-4o are all closed source and shrouded in secrecy, while Defendants actively work to transform the non-profit into a thoroughly commercial business.”
Musk wants Microsoft’s GPT-4 license voided
Musk also asked the court to null and void OpenAI’s exclusive license to Microsoft, or else determine “whether GPT-4, GPT-4T, GPT-4o, and other OpenAI next generation large language models constitute AGI and are thus excluded from Microsoft’s license.”
It’s clear that Musk considers these models to be AGI, and he’s alleged that Altman’s current control of OpenAI’s Board—after firing dissidents in 2023 whom Musk claimed tried to get Altman ousted for prioritizing profits over AI safety—gives Altman the power to obscure when OpenAI’s models constitute AGI.
OpenAI recently unveiled a five-tier system to gauge its advancement toward developing artificial general intelligence (AGI), according to an OpenAI spokesperson who spoke with Bloomberg. The company shared this new classification system on Tuesday with employees during an all-hands meeting, aiming to provide a clear framework for understanding AI advancement. However, the system describes hypothetical technology that does not yet exist and is possibly best interpreted as a marketing move to garner investment dollars.
OpenAI has previously stated that AGI—a nebulous term for a hypothetical concept that means an AI system that can perform novel tasks like a human without specialized training—is currently the primary goal of the company. The pursuit of technology that can replace humans at most intellectual work drives most of the enduring hype over the firm, even though such a technology would likely be wildly disruptive to society.
OpenAI CEO Sam Altman has previously stated his belief that AGI could be achieved within this decade, and a large part of the CEO’s public messaging has been related to how the company (and society in general) might handle the disruption that AGI may bring. Along those lines, a ranking system to communicate AI milestones achieved internally on the path to AGI makes sense.
OpenAI’s five levels—which it plans to share with investors—range from current AI capabilities to systems that could potentially manage entire organizations. The company believes its technology (such as GPT-4o that powers ChatGPT) currently sits at Level 1, which encompasses AI that can engage in conversational interactions. However, OpenAI executives reportedly told staff they’re on the verge of reaching Level 2, dubbed “Reasoners.”
Bloomberg lists OpenAI’s five “Stages of Artificial Intelligence” as follows:
Level 1: Chatbots, AI with conversational language
Level 2: Reasoners, human-level problem solving
Level 3: Agents, systems that can take actions
Level 4: Innovators, AI that can aid in invention
Level 5: Organizations, AI that can do the work of an organization
A Level 2 AI system would reportedly be capable of basic problem-solving on par with a human who holds a doctorate degree but lacks access to external tools. During the all-hands meeting, OpenAI leadership reportedly demonstrated a research project using their GPT-4 model that the researchers believe shows signs of approaching this human-like reasoning ability, according to someone familiar with the discussion who spoke with Bloomberg.
The upper levels of OpenAI’s classification describe increasingly potent hypothetical AI capabilities. Level 3 “Agents” could work autonomously on tasks for days. Level 4 systems would generate novel innovations. The pinnacle, Level 5, envisions AI managing entire organizations.
This classification system is still a work in progress. OpenAI plans to gather feedback from employees, investors, and board members, potentially refining the levels over time.
Ars Technica asked OpenAI about the ranking system and the accuracy of the Bloomberg report, and a company spokesperson said they had “nothing to add.”
The problem with ranking AI capabilities
OpenAI isn’t alone in attempting to quantify levels of AI capabilities. As Bloomberg notes, OpenAI’s system feels similar to levels of autonomous driving mapped out by automakers. And in November 2023, researchers at Google DeepMind proposed their own five-level framework for assessing AI advancement, showing that other AI labs have also been trying to figure out how to rank things that don’t yet exist.
OpenAI’s classification system also somewhat resembles Anthropic’s “AI Safety Levels” (ASLs) first published by the maker of the Claude AI assistant in September 2023. Both systems aim to categorize AI capabilities, though they focus on different aspects. Anthropic’s ASLs are more explicitly focused on safety and catastrophic risks (such as ASL-2, which refers to “systems that show early signs of dangerous capabilities”), while OpenAI’s levels track general capabilities.
However, any AI classification system raises questions about whether it’s possible to meaningfully quantify AI progress and what constitutes an advancement (or even what constitutes a “dangerous” AI system, as in the case of Anthropic). The tech industry so far has a history of overpromising AI capabilities, and linear progression models like OpenAI’s potentially risk fueling unrealistic expectations.
There is currently no consensus in the AI research community on how to measure progress toward AGI or even if AGI is a well-defined or achievable goal. As such, OpenAI’s five-tier system should likely be viewed as a communications tool to entice investors that shows the company’s aspirational goals rather than a scientific or even technical measurement of progress.
