December 6, 2023
What happens when you pursue purpose without profit?  OpenAI shows the pitfalls of a non-profit model

Good morning.

I have written here before about the disadvantages of chasing benefits without any purpose. But what about the disadvantages of pursuing an objective without benefits? This seems to be at the heart of the dispute between OpenAI’s founders. The company was launched as a non-profit dedicated to deploying AI “for the benefit of all” and avoiding uses of AI that would “unnecessarily concentrate power.” But with the release of ChatGPIT it immediately became an economic powerhouse, with a market value of tens of billions of dollars and a relationship with Microsoft – the original unfair concentration of tech power – which caused the tech giant’s stock price to soar.

Count me in as someone who likes the for-profit model. The people who invent a new technology with massive value to society should be made rich and power concentrated in their hands. This is how capitalism works. You’re unlikely to change this by declaring your business a non-profit dedicated to the benefit of all. Instead, you replace the relative clarity that comes from the principled pursuit of profit with the confusion that comes from a committee empowered as the keepers of the true objective. No system is perfect. But the former has a much better track record of providing value to society.

The OpenAI fight also serves as a stark reminder of where power lies in today’s economy. The majority of OpenAI employees – more than 90% – have signed a letter calling for Sam Altman to be reinstated as CEO. If he isn’t, they can walk straight out the door and sign up at Microsoft, which has cleverly appointed Altman and former president Greg Brockman to lead a “new AI research team.” However the OpenAI boardroom drama ended, Microsoft won.

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alan murray

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