By JAMES POLLARD and WYATTE GRANTHAM-PHILIPS, AP Business Writers
NEW YORK (AP) — As they steam toward massive public offerings on Wall Street, the companies at the forefront of artificial intelligence have begun sketching plans to share their wealth with the public — a commitment they say is imperative to address disruptions the technology could bring to the workforce and people’s livelihoods.
Executives at Anthropic and OpenAI have long argued the technology’s arrival will bring many benefits for everyday people, and they’ve promised that will include a share of the profits. The companies are outlining a range of proposals for distributing AI fortunes, but so far they have not resolved key questions over how they would work, how transparent they will be, and who will determine beneficiaries.
On Sunday, Anthropic said it would commit 5% of its shares to the Anthropic Public Benefit Fund, a new entity within the company, pending approval from stockholders. The stake could increase “as the company grows” in the future. The maker of AI assistant Claude said the fund “might explore” larger donations to traditional nonprofits or potentially distribute money to “specific populations.”
The San Francisco-based company shared little information about the types of organizations supported by the fund and the issues they will address. One area it will not support, Anthropic said, is lobbying and political giving.
Phil Buchanan, the president of The Center for Effective Philanthropy, said he welcomed Anthropic’s commitment — especially at a time when he said some billionaires are “diminishing the importance of philanthropy.” But he cautioned that Anthropic should avoid the “arrogance” of previous technology barons who assumed their professional expertise would translate to philanthropic wisdom.
Buchanan recommended the fund support highly effective, existing nonprofits but said it is “hard to talk about any of this because it’s all so abstract.”
“I guess I’m hopeful,” Buchanan said, “but I’m not going to get too excited until I see some evidence of what’s actually happening.”
Anthropic’s pledge hinges on Wall Street plans
Anthropic, which was valued at close to $1 trillion earlier this year, is preparing for an initial public offering as soon as next month that is shaping up as one of the biggest ever.
Once a company is public, donations might be made through the selling of future shares, or potentially turning to cash dividends in the future, explained Jay R. Ritter, director of The IPO Initiative at the University of Florida’s Warrington College of Business. The specifics on how charitable donations will be made through Anthropic’s fund are not clear yet.
Regardless, Ritter said the announcement now is helpful for potential investors to “know what they’re buying.”
Anthropic has already committed $200 million to study the economic effects of AI more broadly. Combined with Sunday’s announcement, Anthropic said roughly 20% of its shares will be dedicated to the “public good,” plus any additional percentage that could be added if the company’s valuation reaches certain milestones.
In announcing the benefit fund, Anthropic offered labor market impacts as one example of its philanthropic focus.
“AI may generate enormous economic value, but it could also cause instability for many workers,” Anthropic said in a blog post Sunday. It added the fund will have the “versatility” to pursue “bolder approaches” that might be necessary to offset that. The company said it would share more details about the fund’s structure and governance in the coming months.
In a May interview with The Associated Press, Anthropic president Daniela Amodei said she expected the company’s success would generally lead to more philanthropic support for disease research and “ensuring that everyone around the world gets to share in the prosperity that we hope AI creates.”
The companies’ pledges have met with skepticism from some critics.
“Anthropic is playing games here,” Gary Marcus, a longtime AI expert and professor emeritus at New York University, wrote on social media Sunday. “Trying to curry public favor while still holding control and resisting disclosure is annoying.”
AI companies are pursuing a range of pathways for charitable distributions
Anthropic and OpenAI are each structured as a public benefit corporation, a designation that requires the companies to pursue not just profit but a social good.
OpenAI Foundation, the nonprofit that controls OpenAI, promised to build out its grantmaking capacity earlier this year with a $1 billion commitment.
Separately, OpenAI in April proposed the creation of a “Public Wealth Fund” with a stake in “AI-driven economic growth” across companies more broadly. That fund could be invested in a handful of assets, OpenAI noted, with returns distributed directly to people regardless of whether or not they’re invested in financial markets. OpenAI is planning its own initial public offering next year.
OpenAI CEO Sam Altman also has spoken to lawmakers on both sides of the aisle about sharing equity in AI companies with the public.
SpaceX CEO Elon Musk, who has tended to eschew traditional philanthropy, pledged as recently as Monday to donate some shares of his own company.
During the personal computer boom, the likes of Michael Dell and Microsoft co-founder Bill Gates started private foundations to manage their philanthropy. Today, Silicon Valley’s leaders including Meta CEO Mark Zuckerberg have turned instead to limited-liability companies, the option that Anthropic is pursuing for its public benefit fund.
The structure offers more control for its owners, experts say. An LLC is not bound by the same spending rules as a foundation, which is required to distribute at least 5% of the value of its endowment.
“They have a lot more flexibility and latitude in how to use the resources they put into the fund,” said Katherina Rosqueta, the founding executive director of the University of Pennsylvania’s Center for High Impact Philanthropy.
Brian Mittendorf, the chair in accounting at Ohio State University, said LLCs allow for activity outside “traditional philanthropy,” such as payouts to individuals that would not be possible through a 501(c)3 charity. But if they are not making traditional charitable gifts, that puts the companies in a “gray area” by raising the question of how the public is benefiting, he said.
LLC owners don’t reap the same tax benefits, either, according to Rosqueta and Mittendorf. Anthropic’s pledge doesn’t immediately trigger a tax write-off, and the company can only claim a deduction once the donated shares are moved to a public charity. There’s also less transparency required of LLCs.
Overall, Anthropic’s announcement amounts to a commitment to “yet-to-be-specified wider goals,” Mittendorf said. The move “reflects more of an intention to do things in the future rather than an act now,” Mittendorf said.
AP Philanthropy editor Glenn Gamboa contributed from Cleveland and Grantham-Philips contributed from Chicago.