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OpenAI's Unusual Structure Hinders Public Trading Aspirations

An in-depth look at OpenAI's leadership stance on going public and navigating EU AI regulation.

Sam Altman

OpenAI Shuns Public Market

Sam Altman, Chief Executive of OpenAI, dismissed the idea of a future IPO for the Microsoft-backed company at an Abu Dhabi conference. Known for being behind the artificial intelligence (AI) breakthrough, ChatGPT, OpenAI is choosing a distinct path from typical tech companies, a path dictated by its unique structure and purpose. "Given our venture into superintelligence, we're bound to make choices that might seem peculiar to most investors," Altman explained.

A Unique Business Model

The distinctive nature of OpenAI's corporate structure was brought to light by Altman as a reason for staying private. He mentioned their "capped-profit" model, a hybrid that started as a non-profit entity but later shifted to accommodate external funding. The pivot maintained a promise to its original non-profit core, keeping its benefit intact even as the for-profit branch developed.

OpenAI's Funding and Valuation

OpenAI, with Microsoft (NASDAQ: MSFT) as a major investor, has garnered $10 billion in funding so far, pushing the company's value to almost $30 billion. These funds are majorly invested in expanding OpenAI's computational capacity.

OpenAI's journey ihasits bumps and turns. Altman and a host of leading scientists involved in AI creation and marketing have been vocal about potential risks AI may bring, especially content-creating generative AI such as ChatGPT. They emphasize the need for regulations to manage these AI advancements.

Controversy over EU AI Legislation

Altman faced criticism during his European visit over comments that OpenAI may consider exiting the region due to challenging compliance with impending AI laws. EU Industry Chief Thierry Breton was among the critical voices, although OpenAI later backpedaled on these statements. "We have no intention of leaving the EU. We're waiting for further clarity on the EU AI Act and are eager to operate in Europe," Altman clarified. The EU is drafting laws to regulate AI, including directives requiring companies to reveal copyrighted materials used for training their AI systems, a policy OpenAI has yet to adhere to with its latest model, GPT 4.

OpenAI logo
OpenAI logo

During his global tour, meeting with several state heads, Altman predicted GPT 4 to be seen as rudimentary in a few years as AI evolves. "Expect a future where images, audio, video, text, and computer programming are all integrated," he said. He also acknowledged the impact of AI on the job market, suggesting a significant shift in the future job landscape.

The Future of Work with AI

Altman warns that many jobs, particularly in sectors like transport, logistics, office support, administration, production, services, and retail, could be made redundant by AI advancements. However, he highlighted the prospect of new job opportunities, stating, "Jobs of the future will look significantly different from those of today."