Elon Musk Rejected Shares in OpenAI

Elon Musk claims he was offered shares in OpenAI at “various points” but says it “seemed unethical/illegal to accept them.”

In response to an X user‘s question about his founding donation, Musk added it wasn’t clear to him how the company’s structure was legal.

https://www.businessinsider.com/elon-musk-openai-says-offered-shares-didnt-accept-sam-altman-2024-2?utm_campaign=business-sf&utm_medium=social&utm_source=twitter

As a quick note… OpenAI has a somewhat bizarre structure. It’s a non-profit or “capped profit” organization (there are actually several organizations), but offers returns on investment. Returns on the first rounds of investments are capped at 100x. So for every dollar invested by Microsoft, it can theoretically make one hundred dollars in return. After that one hundred dollars, the investment is ‘finished’ and profits stay with OpenAI. Weird but I guess a 100x return is fair.

Now onto the organization chart…

Confused? Me too. This is what Elon Musk was talking about.

Instead of just making a socially conscious company, OpenAi made a non-profit, and then had to find ways around non-profit rules to reward employees and investors… giving you this odd chart.

I don’t know if it’s illegal, but it certainly seems a little suspect.