To Continue Innovating, OpenAI Should Return to Its Nonprofit Roots
Many important tech breakthroughs originated in research organizations. But the innovations are most often commercialized elsewhere.
There’s much speculation about the reasons for the abrupt removal and subsequent return of Sam Altman as the CEO of OpenAI. Irrespective of who leads the company going forward, OpenAI faces a fundamental challenge in reconciling its mission with its choice of corporate structure and business model. To solve it, we can learn from the history of tech innovations.
Much of the discourse on OpenAI’s dysfunction has focused on tribal disputes—management against the board, AI safety advocates against business leaders and open source advocates against private innovation champions. OpenAI is too important of an initiative, and its people— whether working on research or commercialization—are too great to be trivialized by a focus on personalities or social media posturing. Instead, we should look at history.
THE TAKEAWAY
- Research organizations have developed many revolutionary technologies. But most often, these innovations have been commercialized and popularized by other, for-profit companies.
Research organizations have developed many revolutionary technologies. But most often, these innovations have been commercialized and popularized by other, for-profit companies. Consider: Researchers at Bell Labs invented the transistor, but Fairchild Semiconductor commercialized it. IBM’s T.J. Watson Lab pioneered work on dynamic random access memory, but Intel made the first commercial DRAM chip. Xerox Parc invented Ethernet and the graphical user interface, but 3Com and Apple, respectively, commercialized them. Hypertext Transfer Protocol was invented at CERN and made broadly accessible by Netscape’s web browser. Most relevantly, the transformer architecture was invented at Google and popularized by OpenAI via ChatGPT.
There are many reasons why the businesses that nurture groundbreaking research have repeatedly failed to capitalize on those innovations commercially. They include misalignment of corporate culture, employee motivations and incentives, investors’ differing time horizons and return expectations and differences in risk tolerance.
A researcher motivated to do groundbreaking innovation and ensure it is both novel and safe may view a rush to commercialization as rash. Conversely, those who aspire to beat competitors to market with an innovative product don’t want to wait to ensure every corner case is accounted for; waiting to achieve perfection may allow others to reap the rewards. Those who are concerned about safety still may differ about the size of the risk and how to mitigate it. Is advanced artificial general intelligence akin to nuclear energy or the natural evolution of computer science? Governments, philanthropies and private investors that back research efforts measure their returns in different ways over different time periods. Aligning such differences in objectives and incentives under one roof has historically been very difficult if not impossible.
OpenAI created a for-profit commercial entity under its original nonprofit research parent. This experiment to have the best of both worlds under one roof might have been ingenious but clearly failed to resolve the misalignment between research and commercialization. The company should take heart that its predicament is not unique, rather a recurrence of a fundamental organizational conflict in tech innovations.
In its post announcing Altman’s firing, the previous board of OpenAI made clear that it is a nonprofit with the responsibility to advance its mission of ensuring that artificial general intelligence benefits all of humanity. History suggests that for this mission to have widespread impact, the company ought to reverse course, go back to its roots as a research organization and leave commercialization to others. Hopefully the new board will pursue that path.