Ensuring AI is democratic by design

OPINION – The story of the Digital Age is one of rapid innovation, with people quickly adopting new tools while institutions meant to ensure everyone shares in the benefits often lag behind.

AI continues to advance at astonishing speed. More than 500 million people around the world—including 80,000 developers representing the next wave of business being built here in California—already use ChatGPT to learn, discover and innovate in ways once thought impossible.

Yet while individuals are embracing the technology, the public sector is still catching up. Government is designed to move deliberately, and for good reason. But at a moment where national security, economic competitiveness, and democratic values are at stake, we need new tools to help bridge that gap.

One such tool is corporate structure.

OpenAI started as a nonprofit research lab. The release of ChatGPT in November 2022 made clear that we were building something that, if harnessed and deployed responsibly, can meaningfully benefit all of humanity. If we are to get AI right and truly democratize its possibilities and benefits, shipping not just technology but actual opportunity, then we need a corporate structure capable of supporting an emerging technology with enormous costs from the computing power needed to run these systems to the talent that builds them.

This isn’t unprecedented. New corporate structures have been created before to support capital intensive, transformative technologies and, most importantly, ensure we democratize them. When exploration in the Age of Discovery required capital beyond what governments could provide, the joint stock corporation (JSC) was created, and society benefited from the scientific advances those journeys enabled. When Europe industrialized, the limited liability corporation (LLC) helped finance railroads and public infrastructure. These structures were built to fund capital-intensive projects and to ensure those projects could reach the broader public.

To pursue this goal, we need a corporate structure that provides a viable business model to pay for the build-out of this emerging technology in a way that helps make it accessible and available to everyone.

More than a decade ago, the Public Benefit Corporation became the newest option for companies wanting to ensure their products or services benefit society. Unlike C-Corporations, which are required to optimize for shareholder return, PBC’s are designed to prioritize a purpose before profit. Not only was the PBC created in the US—California was an early proponent of this structure.

Reflecting the State’s vision, OpenAI has created a corporate structure that will operate mainly in California and support building AI to benefit the most people possible. This is building democracy by design into our corporate structure to help ensure our technology is deployed to benefit as many people as possible.

First, by maintaining a one-of-a-kind nonprofit as the controlling entity dedicated to making sure we get AI right. OpenAI’s nonprofit isn’t going anywhere—it continues to sit at the top of our structure, retaining control over our company and our pursuit of our mission. It will control, and hold a significant stake in the commercial entity and the higher the valuation climbs, the better funded the nonprofit will be, and it will distribute its funds along with AI tools to other nonprofits working to cure cancer, modernize our energy supply, and provide personalized tutors to children lacking access to quality education.

Second, by making the existing for-profit subsidiary a Public Benefit Corporation, our for-profit arm can consider all of society’s stakeholders in AI—not just focus on quarterly shareholder returns. This will let us raise resources to secure the necessary compute and talent—and we strongly believe is a predicate for OpenAI to deliver on its mission of bringing this technology to as many people as possible.

To be clear, a corporate structure designed to help democratize the technology is just one step society will need to take when it comes to ensuring the benefits of AI are broadly shared, but we believe it is an important step.

Our new corporate structure allows us to deliver on our mission and can serve as a “common-sector” model others can look to help bridge the gap between the pace of private-sector innovation and user adoption, and where today’s public sector is with helping to distribute the benefits.

AI can only reach its full potential if scaled by the private sector and we believe it’s critical to get AI right from the start. As with the LLC and the JSC, we’re out to reimagine the corporate structure for AI so we can continue to build it with people front and center.

Chris Lehane is Vice President of Global Affairs for OpenAI.