OpenAI was founded as a nonprofit about a decade ago, but is effecting a transition to a for-profit that many analysts have seen coming for years now. Among the concerns voiced by internal employees, and evinced by the succession of exits by many key players in OpenAI’s history, is that OpenAI has been rushing product development and, notably, safety testing, as detailed in a Wall Street Journal article. For business owners, this may mean less dependable and more risk-laden A.I. products made purely to extract profits from said business owners.
The Five Most Key Takeaways from This Blog Post
OpenAI has been forging ahead despite what many publications call “turmoil” inside the company. That turmoil largely consists of let’s just call it conflicting viewpoints on a fairly important question, which is just what exactly the company should be. And these conflicting viewpoints have led to the departure of several key day-one figures, even as the employee roster continues to balloon.
Initially, the nonprofit nature of OpenAI more or less made it something like a well-funded and extraordinarily well-connected research hub for cutting-edge A.I. with a specific stated purpose for A.I. safety. The transition to a for-profit entity, which is apparently long (indeed, yearslong) and complex and demanding and not to mention rare, some real challenges lay ahead.
That being said, the company has successfully been gaining funding from all over, including a $4-billion credit line from an assortment of banking entities. But these investments are tempered by projected losses in the billions, meaning the company will be in the red during its transition to for-profit status. Even with—rather, because of—hundreds of millions of users, the company is eating the enormously expensive costs of running A.I. systems.
For business owners, the reportedly rushed products may be lower-quality products. A.I. companies have already been basically treating the public as a product-testing group of participants, but OpenAI’s products may be less reliable.
The major advantage that companies like Google and Meta have over OpenAI currently is that they are indeed for-profit companies that are pulling in more than enough capital to fund A.I. efforts, some of which have arguably matched OpenAI’s tools. And also plus the for-profit status of those companies means that pretty much everyone at those companies is clear on the idea that the products they are creating are not idealistic research projects but moneymaking ventures.
Two Years to Make Good On Its Promise
The deal that OpenAI has with investors has a your-money-back-guaranteed condition, with the refund conditioned on whether OpenAI can indeed become a public-benefit corporation (P.B.C., i.e., a for-profit entity with the express purpose of turning a profit while also creating “social good”.)
If you are looking for an idea of what a social good is, then just check out the guidelines for what qualifies as a public benefit cited in a Harvard Law article on this notably recent type of corporation:
a positive effect (or reduction of negative effects) on [one] or more categories of persons, entities, communities or interests (other than stockholders in their capacities as stockholders), including, but not limited to, effects of an artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technological nature
And looking at the Cornell Law definition of a P.B.C., one gets the notion that the company indeed gets to identify for itself what public benefits it will bring forth.
The Impact on Business Owners
For OpenAI to both make enough money while seemingly creating a social good, the likely path toward that is getting more products out the door that will both attract new business and justify raising prices for existing subscribers to ChatGPT Plus.
But, as mentioned, business owners should be wary of OpenAI’s efforts in the coming years, as the internal reports from employees have indicated that safety, which ties into the overall category of “product quality” and involves things like A.I. hallucination and manipulation-of-human-user, will likely become a more noticeable problem in the products in this period of growing pains for the company.
Other Great GO AI Blog Posts
GO AI the blog offers a combination of information about, analysis of, and editorializing on A.I. technologies of interest to business owners, with especial focus on the impact this tech will have on commerce as a whole.
On a usual week, there are multiple GO AI blog posts going out. Here are some notable recent articles:
- For Businesses and Other Organizations, What Makes a Successful Chatbot?
- IBM Watson vs. ChatGPT vs. Gemini: How Will Each Affect Search Engines?
- Using A.I. to Find Resources for Business Owners
- How Would Restricting Open-Source A.I. Affect Business Owners?
- The EU’s A.I. Act Has Become Law: The Implications for Business Owners (Especially American)
In addition to our GO AI blog, we also have a blog that offers important updates in the world of search engine optimization (SEO), with blog posts like “Google Ends Its Plan to End Third-Party Cookies”.
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