Daily Digest: OpenAI goes for profit

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Hello folks, here’s what we have today;

PICKS

1. OpenAI wants to become a for-profit entity. It currently operates under a unique structure—a non-profit parent company overseeing a for-profit subsidiary. The Information reports CEO Sam Altman is considering shaking things up by ditching this non-profit model.🍿Our Summary (also below)

2. Anthropic is opening limited access to an experimental Steering API for Claude. This will allow you to tune a subset of Claude's internal features—just like the Golden Gate demo we got a few weeks ago.

3. NVIDIA drops Nemotron-4 340B. Folks were waiting for Llama-3 400B, but Nvidia clutched in to release this monster first. The key benefit: it allows you to create synthetic data (which Llama models don’t). Nvidia has also shared sweet deets about their training methodology and techniques in the technical report.

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NEWS

• Brave browser’s Leo AI assistant now uses real-time search results.

• Microsoft’s hiring of Mustafa Suleyman is causing tensions with OpenAI.

• Sakana AI is raising $100M at a $1B valuation.

• Microsoft and Google want to bring ads to their AI search results.

• How political parties used AI and deepfakes in the largest democratic elections in India.

• Everything about multimodal AI in 12 mins.

• McDonald’s will stop testing AI to take drive-thru orders, for now.

• Maintaining large-scale AI capacity at Meta.

• Global audiences are suspicious of AI-powered newsrooms.

• AI in finance is like moving from typewriters to word processors.

View more →

QUICK BITES

OpenAI can turn into a for-profit entity. The ChatGPT maker currently operates under a unique structure—a non-profit parent company overseeing a for-profit subsidiary. This setup is raising eyebrows and sparking discussions.

What's going on here?

The Information reports that OpenAI CEO Sam Altman is considering shaking things up by ditching the non-profit model and converting the entire company into a for-profit entity.

What does this mean?

Currently, the for-profit arm pays a share of its profits to the non-profit parent, but there are caps on how much those investors can earn. Shifting to a fully for-profit model could remove these caps, allowing investors to rake in greater profits. OpenAI employees have already sold more than $800 million worth of shares in the past year.

Ditching the ties from the non-profit will require the company to pay a substantial amount as the non-profit was the major capital provider before Microsoft committed billions to OpenAI. Of course, this switch isn’t going to be smooth (it raises multiple ethical and tax questions too).

Although, if it does happen, it would likely give Altman a sizable stake and the investors more control—something they have been pushing for a while. On the other hand, Altman has often touted his lack of financial incentives as the commitment to build a safe AGI. This change could also pave the way for an OpenAI IPO

Why should I care? 

Any change to OpenAI’s structure could have ripple effects across the industry. A for-profit model could mean a more aggressive push for revenue growth, leading to new products and innovations. However, it could also raise questions about the company's commitment to its original mission of "AI for the benefit of humanity."

One takeaway from this saga: Innovate via the technology, not the org structure, to build something lasting.

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