Five "must see" charts on OpenAI

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So let’s start with a fantastic flow diagram from chartr. It shows that OpenAI might not be so open. In short, this is a classic case of poor governance, a complete lack of transparency and marginalising investors.

At the top, there's the Board of Directors who are suppose to represent the interests of the investors.

Below them is OpenAI, Inc. - the nonprofit side of the business. It's focused on doing good for the world and doesn't make money for itself.

Flowing from here is OpenAI GP LLC. the for-profit side of OpenAI. It can earn money, but there's is a limit to how much profit it can make. It's designed to help the whole company grow.

From this business flows OpenAI Global, LLC, which is where it gets interesting. This business can make some money (but not too much), and this is where minority investors like Microsoft have added their investment to help it grow. They don't decide how the business grows; they just support it.

Finally, you have the "Employees & other investors". They are part of the for-profit branch and get to share the success of the business, but they don't control where the business goes. That's still up to the the Board of Directors. So, even if you are the CEO of the company like Sam Altman, you don't actually have that much power. The most important people – the employees who are the intellectual capital – are swashed right at the bottom of the hierarchy.

Source: Chartr

So how does this make OpenAI different to other companies?

1. In typical companies, the board answers to a wide range of shareholders. OpenAI's board, however, has rare, sweeping authority over its nonprofit and profit-making sectors.
2. In most companies, major investors like Microsoft often hold sway and may get a board seat. But at OpenAI, even as a key investor, Microsoft's minority stake offers limited say and insight into key decisions.
3. Typical companies often have a more transparent governance structure where major decisions, such as changes in leadership, are communicated to key stakeholders (like major investors such as Microsoft) well in advance.

This doesn’t appear to be happening at OpenAI. As mentioned before, this appears to be a poor governance and transparency issue. The company should be completely restructured if it wants to attract further investment. If I was Microsoft right now, I would be furious.

Source: statista

The global influence that OpenAI, stretches far beyond its well-known chatbot ChatGPT. OpenAI's tech has been adopted across sectors, with technology and education leading the way. Business services, manufacturing and finance have also used AI to enhance their workflows.

OpenAI is being used for visual perception, speech recognition, and decision-making. It is being used in web searches, language translations, recommendation systems and autonomous vehicles. In healthcare, AI supports data synthesis for patient care and enhances robotics in surgery and rehabilitation.

Source: The Economist

OpenAI has secured a significant foothold in web traffic with ChatGPT. Despite a dip after its initial hype, ChatGPT still surpasses Google Bard and Bing in monthly unique visits, as reported by Similarweb.

The Economist notes that OpenAI has not only achieved rapid user growth with ChatGPT but has also taken the lead in AI technology and started realising substantial revenue.

OpenAI is now positioning itself as a potential tech giant, actively contending in the race to define the future of artificial intelligence.

Source: Analytics India Magazine

OpenAI has not only established itself as a beacon in the artificial intelligence sector but has also become a cradle for technology entrepreneurs. With its reputation for nurturing top AI talent, it's no surprise that in the past five years, around 30 former employees have ventured out to found their own startups, an ensemble now referred to as the 'OpenAI Mafia.' These spin-offs, led mostly by individuals from upper and middle management, span a spectrum of fields from AI research to biotech and accounting, with companies like Anthropic, Pilot, and Covariant marking notable successes.

Source: Fortune Magazine

To build on the initial chart, this shows the flow of investment into OpenAI. There's nothing inherently problematic with the capital raising method or the profit distribution to shareholders and employees. The core issue lies in OpenAI's governance structure, the misalignment of goals between the Board and employees, and the lack of transparency that seems to have led to the company's CEO being ousted.