tweeted Elon Musk Saturday a ChatGPT chat which speculated about the transition of its creator, OpenAI, from a non-profit to a for-profit organization in 2019. The AI chatbot found that if a for-profit company used a nonprofit’s funds to make a difference, it would be “highly unethical and illegal.”
It seems Musk and ChatGPT didn’t have all the facts. Tax filings seen by Root Devices show that the original nonprofit OpenAI retained control of all of its financial assets totaling tens of millions of dollars, meaning none of its money was used to spin off the organization’s commercial businesses.
It’s interesting where that money ended up: funding Universal Basic Income pilot projects aimed at fixing the very problems that OpenAI technologies apparently cause.
And that’s just one thread in a web of commercial investments and nonprofits all tied to Sam Altman, best known as the co-founder of startup accelerator Y Combinator and OpenAI, the nonprofit he co-founded with Musk.
His investments span a dozen industries, from nuclear fusion and supersonic aircraft to molecular diagnostics and crypto, but key among his broader interests is a collection of nonprofits run by Altman and his close friends.
The story of this family of nonprofits illustrates how a small group of like-minded entrepreneurs can use their charitable giving not only to support their personal goals, but to advance commercial interests and perhaps even accelerate societal transformation.
The web of non-profit organizations
It’s far from unusual for tech entrepreneurs to have a charitable foundation or two that distributes their wealth exactly as they see fit. But Altman’s commercial and charitable operations are more intertwined than most.
Altman controls at least two nonprofits, OpenAI and OpenResearch, and has provided funding to a previously unreported third known as UBI Charitable.
UBI Charitable’s mission is to research and implement Universal Basic Income (UBI) programs—the no-strings-attached payout scheme that futurists like Altman and Musk believe will be necessary as robotics and artificial intelligence advances similar to those being developed by technologists. , making many human occupations unprofitable. it is already funds at least two UTD schemes.
Understanding the connections and cash flows between Altman’s businesses and charities takes us back to 2015.
That was the year Altman co-founded OpenAI with Musk, Reid Hoffman and others as a 501c3 organization to conduct AI research safely and transparently. It was also the year he launched a separate non-profit research lab from Y Combinator that would eventually be called OpenResearch. This research lab was created to take on work that required a very long time horizon, trying to answer open questions or develop technology that Altman felt should not be owned by any company.
“We’re not doing this to help YC’s startups succeed or contribute to our bottom line,” Altman wrote on the Y Combinator blog at the time. “At the risk of sounding cliche, it’s for the good of the world.”
He claimed in the blog that he would start by personally donating $10 million to OpenResearch and raise more money later.
An IRS filing shows the lab actually received just $1 million in donations in 2016. Funding for OpenResearch initially lagged, but by 2019 it had eventually surpassed $10 million. The source of this money was not specified. According to tax filings, OpenResearch has received a total of nearly $24.5 million in funding since its founding. Altman also provided the organization with a $5.2 million loan in 2016, which he increased each year. According to the latest data, Altman has lent a total of $14 million to OpenResearch by the end of 2021 (although he has written off some of the debt).
The 2016 filing also noted that OpenResearch has already made “significant progress” in areas as diverse as programming languages, simulation systems, physical/virtual user interfaces, computer-mediated interaction between students and teachers, and virtual reality.
OpenResearch kept a low profile in its early years. That changed with the COVID-19 pandemic.
In March 2020, when the virus was shutting down America, Altman tweeted a call for help with clinical trials of potential therapies, which connected him with computational biologist Benjamin Liu, founder of TrialSpark.
OpenResearch has awarded TrialSpark a $1 million grant to help establish Project Covalence, a platform to support COVID-19 trials in community settings or patients’ homes. The project’s website said: “The world has no time to waste. By coordinating efforts, sharing resources and streamlining logistics, together we can stop the spread of COVID-19.”
At least one trial has been conducted, not for actual therapy, but for a remote diagnostic test for COVID antibodies. The summer 2020 trial was successful, with high-quality samples collected and positive responses from participants.
And yet, by late summer 2021, the Project Covalence website was gone. Soon after, Altman led a $156 million Series C investment in the company. TrialSpark’s valuation would rise to $1 billion by the time the round closes.
“When donors give and then benefit from their donations, they are likely promoting their own good, not the public good,” says Patricia Illingworth, a philosophy professor at Northeastern University and author of Giving Now, a book on the ethics of philanthropy. “I remember the practice of parents donating to the schools their children attend. The donation has an element of self-dealing.”
TrialSpark issued the following statement: “We terminated the Covalence project once the vaccines and therapies were approved and approved. We had no qualms about OpenResearch’s contribution to the Covalence project and Sam’s investment in TrialSpark because they are two separate things.”
Altman could not be reached for comment, but an OpenResearch spokesperson issued a similar statement: “The Covalence project was part of a number of efforts during the pandemic, a project that OpenResearch’s board of directors believed at the time would be of benefit to the public. It is important to note that the Covalence project is different from TrialSpark.”
A press release issued by TrialSpark itself in July 2020 described the Covalence project as a TrialSpark platform.
AI vs. Services
By 2020, OpenResearch had largely abandoned its work in user interfaces and virtual reality. In addition to the one-time grant to TrialSpark, OpenResearch’s attention and resources will now be devoted to UTD research.
In a lengthy 2021 essay, Altman predicted that AI technologies could pay every American $13,500 a year by 2031, and “that dividend could be much higher if AI accelerates growth.” Last year, he tweeted for a $25 minimum wage: “I think it’s good to force the issue of automating jobs that we’re not willing to pay that much for anyway. In the long term, I still think this is the wrong framing and we will probably need something like UBI.”
And he was willing to put his nonprofit’s money where his mouth was.
Altman drew funding from OpenAI in 2021 and awarded a $75,000 OpenResearch grant to work on UBI. This work includes designing and evaluating UTD programs and advising other groups.
It makes sense that Altman turned to OpenAI to fund other projects. After all, OpenAI had no trouble attracting donors. By 2018, it had raised nearly $100 million to fund research projects in AI gaming, training a dexterous robotic arm, organizing machine conferences, and building its own AI security team. However, it has yet to make any external grants. That same year, Musk surrendered his board seat, citing potential conflicts of interest with Tesla’s AI efforts.
In 2019, most of OpenAI’s 125 employees moved to a new for-profit company, also confusingly called OpenAI, which would try to commercialize the technologies it had developed, including large GPT language models and text-to-image generators. Microsoft, along with other investors and venture capitalists, invested $1 billion.
But the original nonprofit still had $30 million in the bank. As its AI technologies branched out, it has now started making grants, starting with modest contributions to organizations like the ACLU, Black Girls Code, and Campaign Zero, a nonprofit that works to end police violence.
Then in 2020, the original OpenAI gave $10 million, nearly one-third of its assets, in a previously undisclosed donation to the nonprofit UBI Charitable, founded that same year. UBI Charitable has no website or staff or volunteers, and its address is the same as OpenResearch.
A California state tax filing reveals that UBI Charitable’s “primary and only current planned activity will be to make grants to organizations implementing universal basic income programs and other policies and programs aimed at broadly distributing the benefits of technological progress.”
UBI Charitable’s president and treasurer is Altman’s longtime friend and former Mountain View Mayor Chris Clark. Clark is also director of OpenResearch and head of strategy at OpenAI itself. UBI Charitable’s only other income in 2020, a $15 million donation, came through a donor-advised fund that protects the author’s identity. He received an additional $5.3 million in 2021.
UBI Charitable started spending almost immediately. As of 2020, he has given $8.3 million to CitySquare, an anti-poverty charity in Dallas, and an additional $8.2 million to Heartland Alliance, a similar organization in Chicago that already runs a UBI pilot project called Chicago Resilient Communities. At the end of 2021, the most recent year for which tax records are available, UBI Charitable had assets of nearly $15 million.
Fixing the problem it caused
The ethics of funding AI, a technology that could lead to job losses and providing for people whose livelihoods are threatened, are undoubtedly complex.
AI technology alone can see two sides of Altman’s actions. When Root Devices asked ChatGPT, he wrote, “If an entrepreneur’s nonprofit creates a tool that could lead to job losses, it can be held responsible for mitigating the harm that might occur. By funding another non-profit organization to provide support to those who might lose their jobs, the entrepreneur can be considered to fulfill this responsibility.”
However, the AI system continued: “If the entrepreneur’s actions are motivated by a desire to protect his financial interests rather than a genuine concern for those who may be affected by the tool, this could be seen as a conflict of interest. and potentially unethical.”
Of course, no one should rely on legal or ethical advice from a chatbot, and as Illingworth notes, “We want billionaires to give away their money as quickly as possible.”
Whether Altman is trying to stay ahead of the coming tech tsunami, covering his own ass, or having a combination of both, the net result is still millions of dollars going to people in financial distress. It remains to be seen whether Altman’s charity UBI keeps up with the changes that AI is likely to bring and the profits that ChatGPT is likely to make in the coming years.