The Structure of OpenAI: From a Research Lab to a Non-Profit Company: A Conversation with Ilya Sutskever

In June I had a conversation with chief scientist Ilya Sutskever at OpenAI’s headquarters, as I reported out WIRED’s October cover story. The structure of the company was one of the topics we discussed. OpenAI began as a nonprofit research lab whose mission was to develop artificial intelligence on par or beyond human level—termed artificial general intelligence or AGI—in a safe way. The company discovered a promising path in large language models that generate fluid text but it required huge amounts of computing infrastructure and cash to implement them. This led OpenAI to create a commercial entity to draw outside investors, and it netted a major partner: Microsoft. Everyone at the company worked for this for-profit arm. Limits were put on the company’s commercial life. After Openai reverted to being a pure nonprofit, there would be a cap on the profit delivered to investors. The board of the original nonprofit, which answered only to the original mission, ran the rest of the shebang.

There have been many twists and turns since Friday, with Altman making a failed attempt to return as CEO, the board replacing Murati as interim CEO with Twitch cofounder Emmett Shear, Microsoft announcing it would hire Altman and Brockman, and almost every OpenAI employee threatening to quit unless Altman returned.

When I made fun of the chart that mapped this relationship, Sutskever did not find it funny. He pointed out that the only company in the world with a capped profit structure is his company. “Here is the reason it makes sense: If you believe, like we do, that if we succeed really well, then these GPUs are going to take my job and your job and everyone’s jobs, it seems nice if that company would not make truly unlimited amounts of returns.” To make sure that the profit-seeking part of the company does not shirk its commitment, there is a board that is keeping an eye on things.

The board fired Sam Altman last Friday because it no longer had confidence in the CEO due to him being not consistently candid in his communications. There were no examples of that alleged behavior nor did anyone at the company become aware of it until just before it was publicly announced. There was no advance notice given to Microsoft CEO and other investors. The four directors, representing a majority of the six-person board, also kicked OpenAI president and chairman Greg Brockman off the board. Brockman quickly resigned.