Ahead of massive IPOs, AI companies are sketching plans to share their wealth

NEW YORK (AP) — As they move toward large public stock offerings on Wall Street, leading artificial intelligence companies have started making plans to share their wealth with the public. They say this is important because the technology could change jobs and threaten people's ability to earn a living.

Executives at Anthropic and OpenAI have long said that artificial intelligence will bring many benefits to ordinary people. They have also promised that people will share in the profits. The companies are now describing different ways to distribute the wealth created by AI. But important questions remain unanswered, including how the plans would work, how openly the companies would share information, and who would decide who receives help.

On Sunday, Anthropic said it would commit 3% of its shares to the Anthropic Public Benefit Fund, a new organization within the company, pending approval from shareholders. The fund's share could grow as the company grows. The maker of the Claude AI assistant said the fund might make larger donations to traditional nonprofit groups or possibly distribute money to specific groups of people.

The San Francisco-based company has shared little information about which organizations the fund would support or which issues it would address. Anthropic said one area it would not support is lobbying and political giving.

Phil Buchanan, president of the Center for Effective Philanthropy, welcomed Anthropic's commitment, especially at a time when he said some billionaires are acting as if they are making philanthropy less important. But he warned Anthropic not to show the same arrogance as earlier technology leaders who assumed their professional expertise would automatically make them wise philanthropists.

Buchanan recommended that the fund support highly effective existing nonprofits. But he said it is difficult to talk about these choices because the ideas are so broad and unclear.

“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 depends on Wall Street plans

Anthropic, which was valued at nearly $200 billion earlier this year, is preparing for an initial public offering as soon as next month. It could become one of the biggest public stock offerings ever.

Once a company becomes publicly traded, it can make donations by giving away future shares or possibly paying cash dividends in the future, explained Jay R. Ritter, a director of the IPO Initiative at the University of Florida's Warrington College of Business. The exact process for making charitable donations through Anthropic's fund is not yet clear.

Even so, Ritter said the announcement is helpful because it allows potential investors to “know what they're buying.”

Anthropic has already committed $1 million to study the broader economic effects of AI. Along with Sunday's announcement, Anthropic said about 3% of its shares would be dedicated to the “public good,” plus any additional percentage that could be added if the company's value reaches certain milestones.

In announcing the benefit fund, Anthropic pointed to the effects on workers as one example of its focus on doing good.

“AI may create enormous economic value, but it could also cause instability for many workers,” Anthropic said in a blog post Sunday. It added that the fund would have the “flexibility” to pursue “bold approaches” that might be needed to address those effects. The company said it would share more details about the fund's structure and leadership in the coming months.

In a recent interview with The Associated Press, Anthropic President Daniela Amodei said she expected the company's success to lead to more support for medical research and to help “ensure that everyone around the world gets to share in the prosperity that we hope AI creates.”

The companies' promises have met with doubt 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 win public support while still holding on to control and resisting openness is annoying.”

Companies are considering different ways to share their wealth

Anthropic and OpenAI are both structured as public benefit corporations. This type of company must work toward a social good as well as making a profit.

The OpenAI Foundation, the nonprofit that controls OpenAI, promised earlier this year to commit $25 billion to build up its ability to give grants.

Separately, in April, OpenAI proposed creating a “Public Wealth Fund” to spread the economic growth driven by AI more widely across companies. OpenAI said the fund could invest in a range of assets, with returns paid directly to people whether or not they invest in financial markets. OpenAI is planning its own initial public offering next year.

OpenAI CEO Sam Altman has also spoken to lawmakers on both sides of the political aisle about sharing ownership of AI companies with the public.

SpaceX CEO Elon Musk, who has often challenged traditional philanthropy, pledged as recently as Monday to donate some shares of his own company.

During the personal computer boom, people such as Michael Dell of Dell Technologies and Microsoft co-founder Bill Gates started private foundations to manage their philanthropy. Today, Silicon Valley leaders, including Meta CEO Mark Zuckerberg, have instead set up limited-liability companies, giving them more freedom to choose how to use their money. Anthropic is seeking a similar option for its public benefit fund.

Experts say this structure gives owners more control. Unlike a foundation, a public benefit corporation does not have to follow the same spending rule that requires foundations to distribute at least 5% of their assets each year.

“They have a lot more flexibility and freedom in how to use the resources they put into the fund,” said Katherine Rosqueta, founding executive director of the University of Pennsylvania's Center for High Impact Philanthropy.

Brian Mittendorf, an accounting professor at Ohio State University, said public benefit corporations can take part in activities outside traditional philanthropy, such as making payments to individuals that would not be possible through a 501(c)(3) charity. But if they are not making traditional charitable gifts, they enter a “gray area” because it raises questions about how the public benefits, he said.

Public benefit corporation owners do not receive the same tax benefits as foundation donors, according to Rosqueta and Mittendorf. Anthropic's promise does not immediately trigger a tax write-off, and the company can claim a deduction only after the donated shares have been transferred to a public charity. Public benefit corporations are also subject to fewer transparency requirements.

Overall, Anthropic's announced commitment to “yet-to-be-specified wider goals” reflects more of an intention to do things in the future than an action taken now, Mittendorf said.

AP philanthropy editor Glenn Gambôa contributed from Cleveland, and Grantham-Philips contributed from Chicago.