Open AI has decided to open a new for-profit arm of the famed research think tank in a new shocking twist. OpenAI was in news recently when Elon Musk left the board of the world leading research think tank in light of many disagreements. Sam Altman also recently resigned as the president of Y Combinator, a super incubator for startups to focus on activities at Open AI. In a sense, with this move, Open AI transforms into a fancy AI startup with a world class team.
What once started as a nonprofit research lab, co-founded by Musk and Altman in a bid to save the world from the potential dangers of AI and focus on safety of artificial intelligence has now transitioned into a for-profit enterprise. What products could Open AI build as part of its portfolio still remains to be seen. Natural language processing and reinforcement learning are some of the core strengths at Open AI. The new company very well may try selling these AI services to monetise them in the near term.
When the lab was set up, it raised headlines for poaching some of the best researchers from leading universities, leaving a gap in the academic world. With world class researchers and technologists already in place and a market for cutting-edge applications, this for-profit move will push the company to cater to the real world needs of the enterprises along with allowing Open AI to attract the best talent possible. Open AI faced several attritions as leading researchers like Pieter Abbeel and Andrej Karpathy left Open AI to target more commercial gigs of Musk where AI could be applied to real world problems. Move towards profits and investors will encourage more world class researchers and engineers to stay at Open AI.
Altman’s vision to balance capitalism with responsibility has resulted in the company trying out the “capped-profit” model. The statement from Open AI on its blog, says “We’ve created OpenAI LP, a new “capped-profit” company that allows us to rapidly increase our investments in compute and talent while including checks and balances to actualize our mission.” The company pivots to this mode of operation in a hope to actualise its mission in a more fruitful way. Open AI is focussed on making AGI(Artificial general intelligence) safer and ensure a broad adoption of AGI.
Even though the Open AI statement said that the daily work at Open AI would remain the same, it is doubtful how it would make money without building end to end products. Open AI says, “The fundamental idea of OpenAI LP is that investors and employees can get a capped return if we succeed at our mission, which allows us to raise investment capital and attract employees with startup-like equity.”
With a firm focus on profits the company has become the most probable place where AGI will actually be developed and sold off to businesses. With motivation to raise billions of dollars in funding and make multiple times the funding amount the company seems poised to serve enterprises who are struggling to get real value for their AI bucks. Open AI with their superior machine learning capabilities can become a competitor to major AI service companies once they decide which products they will focus on.
Open AI LP’s new structure allows its investors to only make 100x on their returns while everything above that will go back to the non profit entity, “Open AI Non Profit.” Open AI realise that their core mission is unrealistic without the flow of steady and huge amounts of capital. Open AI as a company is late in embracing the AI markets and building products for it will be definitely tough.Open AI LP will have a long way to go to cultivate the ability of creating market ready products. Here is where Sam Altman comes in. Sam Altman left his responsibilities at Y Combinator to lead the new Open AI LP and bring some business to the company which has been in research mode for years.
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