“Engineering is easy. People are hard.” That quote comes from technologist Bill Coughran, whose career has spanned Bell Labs, Google, and the famed venture-capital firm Sequoia.
OpenAI’s Failed Experiment in Governance
In mixing the for-profit and nonprofit models, OpenAI hoped for the best of both worlds. Instead, it got the worst.
November 30, 2023
HBR Staff; Joel Saget/AFP/Getty Images; Wizemark/Stocksy
Summary.
OpenAI has undoubtedly succeeded in its product innovations, with ChatGPT. But its governance innovations have failed spectacularly. Put in place to guard against the abuse of its product, the company’s unusual structure — a nonprofit that owns a for-profit — proved unpredictable and subject to the whims of its directors. There’s a reason the most successful startups stick to best practice: A more traditional governance structure would help OpenAI to scale while making the development of its technology more predictable.