The OpenAI saga puts tech governance in the spotlight

All anyone was talking about last week was OpenAI. Over the course of five short days, its chief executive officer Sam Altman was fired by the board, hired by Microsoft and reinstated as the head of OpenAI. But, while the events of last week were reported from the perspective of the 700 odd employees who threatened to walk out if their CEO was not reinstated, the tech giant whose $13 billion commitment to a company over whose board it had little control was imprudent to say the least, and also of the 37-year-old CEO who remains the undisputed face of today’s Generative Artificial Intelligence (AI) revolution, despite the drama, the long-term effects of the week’s events will be most deeply felt by the governance community, whose attempt at controlling the most transformative technology in over a century has truly failed.

- Rahul Matthan

OpenAI was born out of a fear that commercially funded AI research labs—like Google’s DeepMind—were hidden from public gaze, which meant that the technologies they were creating could be dangerous and no one would be any wiser. It was to ensure that AI development proceeds in a safe and responsible manner that OpenAI was set up as a non-profit organization with the objective of making sure “… artificial intelligence benefits humanity regardless of profit." Its original founders—Sam Altman and Elon Musk—committed up to $1 billion of their own money to a not-for-profit entity that had been established for that purpose.

Despite the generous initial commitment, it soon became clear that building a large language model was far more expensive than they had originally imagined. OpenAI was going to need far more capital than a non-profit would ordinarily be able to access. To marry the twin objectives of raising private capital while prioritizing safety, OpenAI gave itself a somewhat unusual corporate structure in 2019—with a for-profit unit housed within an entity that was supervised by a not-for-profit board.