The Corporate Takeover of Nonprofit OpenAI

Economics Non-Profit

             Marble Falls       Why should we care about the headline grabbing drama in Silicon Valley and tech neighborhoods around the world about OpenAI and the fate of its globetrotting CEO Sam Altman?  Good question, especially since every report is fabricated from hints, winks, and gestures, lacking any hard facts about exactly what triggered the OpenAI nonprofit board to summarily fire him.  They claimed a lack of transparency between him and the board, and in doing so have insisted on a total absence of any transparency, likely they feared that any revelations would have brought a locust horde of lawsuits on them.  Unfortunately, we kind of have to care because Altman has been the Rebecca of Sunnybrook Farm, Pied Piper for artificial intelligence, and this hapless board of nonprofit OpenAI has been the only ones with the finger in the dike, trying to assure us that artificial intelligence is still under control on the other side of the levee.

Sadly, in previous discussions about this mess, I argued that it was all about money and that under pressure from the deep pocketed investors, betting odds were that the board would end up folding like a cheap suit.  I was right, but not right enough.  Sure, they folded when caught in a vise between the money people and their own staff when the vast majority signed a letter demanding they take Altman back and resign. They didn’t just fold, they resigned and abetted a total corporate takeover.  The only holdover in the nonprofit was one of the tech guys from Quora.  The newbies include a former co-chief executive of Salesforce.  If that doesn’t say it all, they also added Larry Summers, which they may have thought lent credibility to this coup, but to me pretty much spells game over, head for the hills, and drown your devices on your way.

Larry Summers on the top line of his resume was a controversial president of Harvard, especially when it came to race and women.  He was Treasury Secretary for a minute.  He was an adviser to Obama.  He’s been a critic of Biden’s economic program.  Whatever, that’s all blah, blah, blah, because when it comes to the techies, he’s been bought and sold as a captive of their dreams and ambitions. Take a look at where he has been on the board of directors, and it’s easy to follow the money trail over the last twenty-years, even on Wikipedia:

On October 19, 2006, Summers was hired as a part-time managing director of the New York-based hedge fund D. E. Shaw & Co. for which he received $5 million in salary and other compensation over a 16-month period.[68] At the same time Summers earned $2.7 million in speaking fees from major financial institutions,[69] including Goldman Sachs, JPMorgan Chase, Citigroup, Merrill Lynch and Lehman Brothers.[70] Upon being nominated Treasury Secretary by President Clinton in 1999, Summers listed assets of about $900,000 and debts, including a mortgage, of $500,000.[69] By the time he returned in 2009 to serve in the Obama administration, he reported a net worth between $17 million and $39 million.[69] He is a former member of the Steering Committee of the Bilderberg Group.[71] In 2013, Summers became an early angel investor in India’s first car rental company, Zoomcar, which was started by his former Harvard Teaching Fellow.[72]In June 2011 Summers joined the board of directors of Square, a company developing an electronic payment service,[84] and became a special adviser at venture capital firm Andreessen Horowitz.[85] He joined the board of person-to-person lending company Lending Club in December 2012.[86] In July 2015 Summers joined the Board of Directors of Premise Data, a San Francisco-based data and analytics technology company that sources data from a global network of on-the-ground contributors.[87][88]

No mistake about it.  We’re in big trouble.  The guardrails are gone.  The oversight of the for-profit OpenAI by the nonprofit has disappeared, so that it will be impossible to tell the difference between the two.  This isn’t reform but a coup, and we’re all the worse for this tech Game of Thrones.