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

Synopsis

As they move toward huge stock market listings on Wall Street, leading artificial intelligence companies have started making plans to share some of their wealth with the public. They say this is important because AI could change jobs and affect how people earn a living.

Leaders at Anthropic and OpenAI have long said that AI will bring many benefits to ordinary people. They have also promised that people will share in the profits. The companies are considering different ways to share the wealth created by AI. But important questions remain unanswered, including how these plans would work, how open the companies would be about them, and who would decide who receives the money.

On Sunday, Anthropic said it would set aside 5% of its shares for the Anthropic Public Benefit Fund, a new organization within the company, if its stockholders approve. This share could grow as the company grows in the future. Anthropic, which makes the AI assistant Claude, said the fund might consider making larger donations to existing nonprofit groups or giving money directly to certain groups of people.

The San Francisco-based company shared few details about the kinds of organizations the fund would support or the problems it would try to solve. Anthropic said the fund would not support lobbying or political donations.

Phil Buchanan, president of The Center for Effective Philanthropy, said he welcomed Anthropic's promise. He said this was especially important at a time when some billionaires were making philanthropy seem less important. However, he warned Anthropic not to make the same mistake as earlier technology leaders who assumed that their business skills also made them experts in giving money to good causes.

Buchanan suggested that the fund support existing nonprofit organizations that have a strong record of helping people. But he said it was difficult to judge the plan because so little was known about it.

"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 promise depends on its plans to go public

Anthropic, which was valued at nearly $1 trillion earlier this year, is preparing for a stock market listing, known as an initial public offering (IPO), as soon as next month. It could become one of the biggest IPOs ever.

After a company goes public, it might make donations by selling shares it owns in the future. It could also use cash dividends, which are payments made to shareholders, explained Jay R. Ritter, director of The IPO Initiative at the University of Florida's Warrington College of Business. It is not yet clear exactly how Anthropic will make charitable donations through its fund.

Even so, Ritter said announcing the plan now helps possible investors understand what they are buying when they invest in the company.

Anthropic has already promised $200 million to study the wider effects of AI on the economy. With Sunday's announcement included, the company said about 20% of its shares would be set aside for the public good. That share could grow further if the company's value reaches certain targets.

When Anthropic announced the fund, it pointed to the effects of AI on jobs as one area it might support.

"AI may generate enormous economic value, but it could also cause instability for many workers," Anthropic said in a blog post on Sunday. The company added that the fund would have the freedom to try bigger and newer approaches that might be needed to reduce these problems. Anthropic said it would share more information about how the fund is organized and managed in the coming months.

In a May interview with The Associated Press, Anthropic president Daniela Amodei said she expected the company's success to lead to more support for disease research and efforts to make sure that people around the world share in the wealth AI may create.

Some critics have questioned the companies' promises.

"Anthropic is playing games here," Gary Marcus, a longtime AI expert and professor emeritus at New York University, wrote on social media on Sunday. He said the company was trying to win public support while keeping control and refusing to share enough information.

AI companies are considering different ways to give money to the public

Anthropic and OpenAI are both set up as public benefit corporations. This type of company must aim to do social good as well as make money.

The OpenAI Foundation, the nonprofit organization that controls OpenAI, promised earlier this year to expand its grantmaking work, setting aside $1 billion for this purpose.

Separately, OpenAI proposed creating a "Public Wealth Fund" in April. The fund would own a share of the economic growth driven by AI across a wider range of companies. OpenAI said it could invest the money in a small number of assets and then distribute the returns directly to people, whether or not they invest in financial markets. OpenAI is planning its own IPO next year.

OpenAI CEO Sam Altman has also spoken with lawmakers from both major political parties about giving the public ownership shares in AI companies.

SpaceX CEO Elon Musk, who has often chosen not to follow traditional forms of philanthropy, promised as recently as Monday to donate some of his own company's shares.

During the personal computer boom, business leaders such as Michael Dell and Microsoft co-founder Bill Gates created private foundations to manage their charitable work. Today, some Silicon Valley leaders, including Meta CEO Mark Zuckerberg, have instead chosen limited-liability companies (LLCs). Anthropic is using this type of structure for its public benefit fund.

Experts say this structure gives its owners more control. Unlike a foundation, an LLC does not have to follow the same rules about how much money it must spend. A foundation is required to distribute at least 5% of the value of its endowment each year.

"They have a lot more flexibility and latitude in how to use the resources they put into the fund," said Katherina Rosqueta, 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 can support activities beyond traditional charity. For example, they can pay money directly to individuals in ways that a nonprofit charity registered under section 501(c)(3) cannot. But if these companies do not make traditional charitable donations, it becomes harder to tell how the public benefits, he said.

According to Rosqueta and Mittendorf, LLC owners also do not receive the same tax benefits as traditional charities. Anthropic cannot claim an immediate tax deduction for its promise. It can claim a deduction only when the donated shares are transferred to a public charity. LLCs also face fewer requirements to share information publicly.

Overall, Mittendorf said, Anthropic's announcement is a promise to work toward wider goals that have not yet been clearly defined. He said the move shows an intention to take action in the future rather than making a concrete change now.