OpenAI, an artificial intelligence research group created by Silicon Valley investors as a non-profit, will now be seeking “capped” profit, according to a blog post on the OpenAI website published Monday.
SpaceX and Tesla CEO Elon Musk, startup accelerator Y Combinator president Sam Altman, and several other Silicon Valley figures launched OpenAI in late 2015 with $1 billion in seed funding and the stated goal of ensuring that AI “benefits all of humanity.” Musk stepped down from OpenAI in February 2018. Since its founding, the group has conducted research with reinforcement learning, robotics, and language.
According to OpenAI, the original nonprofit entity will own a limited partnership called OpenAI LP that’s designed to give a “capped return” to investors and employees and funnel excess funds back to the nonprofit. It’s unclear exactly how OpenAI’s technologies will generate the value needed to provide these returns, but the blog notes that OpenAI is flexible enough to allow for a return “in the long term.”
“The fundamental idea of OpenAI LP is that investors and employees can get a capped return if we succeed at our mission, which allows us to raise investment capital and attract employees with startup-like equity,” the blog post reads.
OpenAI’s blog claims that returns for the first round of investors will be capped at 100 times their original investment, and returns to employees will be “negotiated in advance.”
Wired reported that the shift toward seeking a "capped profit" was an effort to compete with other corporate groups in AI research, like Google DeepMind. OpenAI is now an entity that exists in part to enrich venture capitalist investors, with extremely modest financial “caps.”
OpenAI’s shift toward seeking profit in order to both woo and remunerate investors isn’t surprising, considering the venture capitalist resumes of Musk, Altman, Peter Theil, and others who helped get OpenAI off the ground.
Altman’s venture capital seed funding company Y Recombinator has invested in over 1,400 for-profit companies, including Reddit, Airbnb, Dropbox, and Stripe. Musk has poured billions of his own money into his companies SpaceX and Tesla. Thiel, a Trump-supporter, has funded Silicon Valley companies SpaceX and Airbnb, and is a principal investor in Palantir, a data-mining company used by US banks and police departments to create a "digital dragnet" of individuals designed to track and potentially incriminate them. Musk and Thiel co-founded PayPal, and OpenAI backer Reid Hoffman was a PayPal executive before co-founding LinkedIn.
OpenAI claims that its shift to a capped profit structure is specifically designed on nurturing the development of “safe” artificial general intelligence (AGI)—or, human-like intelligence. The blog states, “Our structure gives us flexibility for how to create a return in the long term, but we hope to figure that out only once we’ve created safe AGI.”
Experts have argued that the concept of AGI is based on false or unprovable assumptions about the nature of intelligence, and is a conceptual myth. It’s also worth noting that “artificial intelligence” is often appropriated by startups to elicit hype. In many cases, “AI” is used as a buzzword for standard computer programming. According to a recent survey from London venture capital firm MMC, 40 percent of European startups who are classified as “AI companies” do not even use AI. While OpenAI is working with real AI as the term is commonly understood, the hype about AI will likely play into their financial interests.
OpenAI has some incremental wins under its belt, but also hasn’t accomplished any paradigm-shifting breakthroughs in AI research. In July 2018, OpenAI claimed that its Dactyl robot-hand system achieved dexterity and flexibility was nearly but not quite comparable to that of a human hand. In August, OpenAI built neural networks that can beat humans at the game Dota 2 by basically cheating.
It’s not clear exactly how or if OpenAI’s “capped profit” structure will change things on a day-to-day level for researchers at the entity. But generally, we’ve never been able to rely on venture capitalists to better humanity.