OpenAI Will Need More Capital Than Any Non-Profit Has Ever Raised

Microsoft’s $1 billion investment into OpenAI is merely petty cash compared to what the high-profile artificial intelligence research group believes will be necessary to further the field.

OpenAI’s CEO Sam Altman said Thursday in San Francisco during TechCrunch’s Disrupt conference that the research group will “need more capital than any non-profit has ever raised, probably.”

For contrast, the United Way non-profit says it raises $4.6 billion every year and is the “world’s largest privately-funded nonprofit.”

However, it’s not an apples-to-oranges comparison between OpenAI and United Way, considering the A.I. group created a separate for-profit company called OpenAI LLP in March. That move was intended to help the research firm raise money like a fast-growing startup, as exemplified in July when Microsoft said it would invest $1 billion into OpenAI. 

OpenAI executives believe its for-profit arm will entice more financial backers who stand to make money if the group is successful. Under it’s so-called capped-profit model, OpenAI’s initial funders will have their profits “capped” at 100 times their investment, with the rest of the money flowing back to the OpenAI non-profit.

Altman, who co-founded OpenAI in 2015 with other prominent tech luminaries like Elon Musk (who left the group’s board in 2018) and LinkedIn co-founder Reid Hoffman, was once the president of the Y Combinator startup incubator before he became OpenAI’s chief.

OpenAI CTO Brockman said that the group’s plan to develop artificial general intelligence (AGI) is “actually a really expensive endeavor” because of the enormous amount of computing resources required. Unlike today’s most powerful deep learning systems that can perform well on specific tasks like translating languages or identifying objects in pictures, an AGI system would be capable of human-like intelligence that can handle myriad tasks. 

Speaking about the recent Microsoft investment, Altman noted that it’s “cash” and not merely the equivalent of $1 billion of credits to be used for Microsoft’s Azure cloud computing service. 

But, Brockman said that OpenAI would be running A.I. projects “exclusively” on Azure, and that OpenAI and Microsoft “are working together to build these massive supercomputers and push A.I. technologies.” Brockman said that Microsoft can also use technologies from OpenAI in its own products, if the group chooses to license some of its tech.  

OpenAI is not without its share of critics who claim that the group overinflates its technological capabilities. Machine-learning expert and University of California at Berkeley professor Ben Recht told Fortune’s Jeremy Khan that OpenAI is “this weird Silicon Valley vanity project.”

Indeed, several A.I. experts believe that AGI, the stuff out of science fiction novels, is decades or even longer from becoming a reality.

“We obviously have an enormously difficult challenge ahead of us,” Altman said.  

However, he claims that A.I. is rapidly advancing and has eclipsed what he thought was possible when OpenAI was first being developed. 

“We figured out how to do it,” Altman said referring to software that learns, like OpenAI’s software that beat an e-sports team in the video game Dota 2. “That’s like figuring out how to go to the moon.”

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