NEW YORK (AP) — As they head toward massive IPOs on Wall Street, companies on the cutting edge of artificial intelligence have begun sketching out plans to share their wealth with the public — a commitment they say is imperative to confronting the disruption the technology could bring to workforces and people’s livelihoods.
Executives at Anthropic and OpenAI have long argued that the arrival of technology will bring many benefits to ordinary people, and they have promised that this will include a share of the profits. Companies are presenting a series of proposals to distribute AI fortunes, but so far they have not resolved key questions about how they will work, how transparent they will be and who will determine the beneficiaries.
On Sunday, Anthropic announced it would commit 5% of its shares to the Anthropic Public Benefit Fund, a new entity within the company, pending shareholder approval. The stake could increase “as the company grows” in the future. AI assistant creator Claude said the fund “may explore” larger donations to traditional nonprofits or potentially distribute money to “specific populations.”
The San Francisco-based company has shared little information about the types of organizations the fund supports and the issues they will address. One area it will not support, Anthropic said, is lobbying and political donations.
Phil Buchanan, 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 warned that Anthropic should avoid the “arrogance” of previous tech barons who thought their professional expertise would translate into philanthropic wisdom.
Buchanan recommended that the fund support highly effective existing nonprofits, but said it was “difficult to talk about all that because it’s all too 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 really going on.”
Anthropic’s commitment depends on Wall Street’s plans
Anthropic, which was valued at nearly $1 trillion earlier this year, is gearing up for an IPO as early as next month that is shaping up to be one of the largest ever.
Once a company goes public, donations can be made through future stock sales, or potentially as cash dividends in the future, explained Jay R. Ritter, director of the IPO Initiative at the University of Florida’s Warrington College of Business. Details of how charitable donations will be made through the Anthropic fund are not yet clear.
Regardless, Ritter said the announcement is now helpful so potential investors “know what they’re buying.”
Anthropic has already committed $200 million to study the economic effects of AI more broadly. Along with Sunday’s announcement, Anthropic said about 20% of its shares would be dedicated to the “public good,” plus any additional percentages that might be added if the company’s valuation hits certain milestones.
In announcing the charitable fund, Anthropic cited impacts on the job market as an example of its philanthropic focus.
“AI can generate enormous economic value, but it could also cause instability for many workers,” Anthropic said in a blog post on Sunday. He added that the fund will have the “versatility” to pursue “bolder approaches” that may be needed to offset this. The company said it would share more details on the structure and governance of the fund 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 increased philanthropic support for disease research and “ensure that everyone in the world can share in the prosperity we hope to create through AI.”
The companies’ commitments have drawn 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 on Sunday. “Trying to curry favor with the public while maintaining control and resisting disclosure is boring.”
AI Companies Take Various Routes for Charitable Distributions
Anthropic and OpenAI are each structured as a public benefit corporation, a designation that requires companies to pursue not only profit but also social good.
The OpenAI Foundation, the nonprofit that controls OpenAI, promised to boost its grantmaking capacity earlier this year with a $1 billion commitment.
Furthermore, OpenAI proposed in April the creation of a “Public Wealth Fund” with participation in “economic growth driven by AI” across all companies. This fund could be invested in a handful of assets, OpenAI noted, with returns distributed directly to people, whether or not they are invested in financial markets. OpenAI is planning its own IPO next year.
OpenAI CEO Sam Altman also spoke with lawmakers on both sides of the party about sharing AI companies’ equity with the public.
SpaceX CEO Elon Musk, who tends to avoid traditional philanthropy, pledged last Monday to donate some shares in his own company.
During the personal computer boom, Michael Dell and Microsoft co-founder Bill Gates established private foundations to manage their philanthropy. Today, Silicon Valley executives, including Meta CEO Mark Zuckerberg, have turned instead to limited liability companies, the option Anthropic is pursuing for its public benefit fund.
The structure offers more control to its owners, experts say. An LLC is not subject to 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 that they put into the fund,” said Katherina Rosqueta, founding executive director of the Center for High Impact Philanthropy at the University of Pennsylvania.
Brian Mittendorf, chair of accounting at Ohio State University, said LLCs allow activities outside of “traditional philanthropy,” such as payments to individuals that would not be possible through a 501(c)3 charity. But if they don’t make traditional charitable donations, that puts them in a “gray area” by raising the question of how the public benefits, he said.
LLC owners also don’t get the same tax benefits, according to Rosqueta and Mittendorf. Anthropic’s commitment does not immediately trigger a tax deduction, and the company can only claim a deduction once the donated shares are transferred to a public charity. LLCs are also less transparent.
Overall, Anthropic’s announcement amounts to a commitment to “broader goals yet to be clarified,” Mittendorf said. The move “reflects more of an intention to do things in the future rather than an act now,” Mittendorf said.
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Glenn Gamboa, AP Philanthropy editor, contributed from Cleveland and Grantham-Philips from Chicago.
