What went wrong at OpenAI? Why did Sam and his team decide to abandon Elon Musk's vision for the company?
Sam transferred all of the non-profit OpenAI Inc's technology to his own for-profit OpenAI LP and today the technology is under the control of Microsoft - exactly what Elon Musk sought to avoid.
In 2015 OpenAI Inc. was founded as a non-profit to develop open-source artificial intelligence technology to benefit the entirety of humanity. The dream of an open and altruistic AI died two years later on December 22, 2017. This post explores what went wrong. Here is a video of Elon Musk describing the company.
OpenAI Inc. was founded in 2015 by Elon Musk (Chairman), @sama (CEO), @gdb, @ilyasut, @johnschulman2, and @woj_zaremba. The company was initially funded with a $1 billion pledge from its founders and other philanthropists, including @reidhoffman, @peterthiel, and @jesslivingston. It has been reported that Elon invested $100 million in the company, but I have not been able to confirm the amount.
Two years later Sam decided to abandon the original non-profit structure by licensing the tech from OpenAI Inc. to a new for-profit company he started called OpenAI LP. After the Microsft deal the non-profit reportedly owned just 2% of the LP. The for-profit OpenAI LP is run by @sama(CEO), @gdb(CTO), and @ilyasut (Chief Scientist) and funded by @ycombinator, the Reid Hoffman Foundation, and @khoslaventures. Elon Musk is NOT involved in the for-profit company.
According to Crunchbase, there have been two OpenAI LP secondary market transactions from 5 investors in 2021 and 2022 by Matthew Brown (Dallas), Tiger Global, @sequoia, @BedRockCapital, & @a16z. Presumably to enrich the company’s early founders and investors.
OpenAI LP raised $1 billion from Microsoft in 2019 and by 2023 they had invested $10 billion in total valuing the company at $29 billion post-funding. The deal gives Microsoft 75% of profits until its $10 billion is recouped. After that it will own 49%, the employees will own 49%, and the original non-profit will own 2%.
When Elon Musk and Sam Altman started OpenAI they did so to get super-AI first and distribute it to the world FIRST instead of keeping it concealed and concentrated in the hands of big tech.1 Under the terms of the $10 billion investment, Microsoft received an exclusive license to OpenAI's GPT-3 - exactly what Elon Musk sought to avoid when he started the company. No one outside of OpenAI will ever be allowed to see what is under the hood.2 Microsoft-funded/owned ChatGPT is an example of how AI can be used to spread partisan propaganda and ideology - exactly what Elon Musk worried about. ChatGPT, built by registered Democrat voters, was designed to lie and spread dangerous left-wing misinformation.3
Today OpenAI LP's CEO Sam Altman is calling Elon Musk a 'jerk' for sharing his frustration that Sam perverted their company by choosing profits over humanity.4 Elon Musk hasn't been shy about his frustrations over Sam's decision to hide OpenAI's code transforming the company into a for-profit enterprise.5
Never one to give up, Elon Musk has announced he is starting ‘TruthGPT’ to rival OpenAI and Google.6 I wouldn’t bet against Elon…
Shieber, Jonathan. "Elon Musk's Billion-Dollar Crusade to Stop the AI Apocalypse." Vanity Fair, 27 Mar. 2017, https://web.archive.org/web/20230312123049/https://www.vanityfair.com/news/2017/03/elon-musk-billion-dollar-crusade-to-stop-ai-space-x.
Microsoft. "Microsoft Teams up with OpenAI to Exclusively License GPT-3 Language Model." Microsoft, 22 Sept. 2020, https://blogs.microsoft.com/blog/2020/09/22/microsoft-teams-up-with-openai-to-exclusively-license-gpt-3-language-model/.
Yahoo Finance. "OpenAI CEO Sam Altman calls Tesla's Autopilot 'an under-appreciated asset' that's 'never going to get worse over time'." Yahoo Finance, 6 Apr. 2021, https://finance.yahoo.com/news/openai-ceo-sam-altman-calls-211537864.html.
Trent, Logan. "Elon Musk says he wants to start Truth GPT to rival OpenAI and Google." Engadget, 6 Apr. 2021, https://www.engadget.com/elon-musk-says-he-wants-to-start-truthgpt-to-rival-openai-and-google-014938539.html?