Following in the footsteps of its arch-rivals OpenAI and Anthropic, Elon Musk-led artificial intelligence (AI) company xAI has adopted a for-profit benefit corporate structure in Nevada, as per a report by The Information.
A late November filing with Nevada suggests this unusual corporate structure will enable xAI to focus more on having a positive impact on society while paying less attention to its obligations to shareholders.
xAI has registered the company not as profit-seeking organization but ‘benefit organization.’
— Girish Madanshetti (@Mysticlost1) December 27, 2023
Unlike traditional for-profit companies, benefit corporations prioritize not just shareholder returns, but also a “positive impact on society & environment.” pic.twitter.com/8YPG48gqHO
The goal of the company, according to the filing, is to create a "material positive impact on society and the environment, taken as a whole".
Elon Musk's goal behind announcing xAI
In March this year, Musk announced xAI in a bid to understand the "true nature of the universe". On its official website, xAI says it is "working on building artificial intelligence to accelerate human scientific discovery".
The company further insists its mission is to advance our collective understanding of the universe. The 52-year-old billionaire previously said xAI will use X (formerly Twitter) and Tesla data to train its AI systems.
Are rich startups really benefiting humanity?
Leading US-based artificial intelligence companies OpenAI, Anthropic and xAI identify themselves as benefit corporations or non-profit organisations. It is worth noting that these companies suggest AI is too dangerous to maximise profits.
Despite the morally righteous sentiment, these companies are making a lot of profit. For instance, according to a separate report by The Information, Google-backed AI company Anthropic is projecting at least $850 million of revenue in 2024 (about £663.46 million).
Likewise, a Bloomberg report suggests OpenAI is seeking a valuation of $100 billion (about £78 million). While Anthropic is organised as a benefit corporation in Delaware, OpenAI also has a for-profit arm as well.
The OpenAI drama that saw Altman's profit-seeking branch trying to overpower the non-profit board creates doubts about the claims of these AI startups that are supposedly aiming to benefit society.
Moreover, these companies have contrasting visions. Unlike xAI, which aims to build AI to expedite human scientific discovery, Anthropic aims to build "reliable, interpretable, and steerable" AI systems.
The company says it will team up with "policymakers and civil society in the US and abroad to help promote safe and reliable AI". Meanwhile, Musk hasn't shied away from discussing the risks posed by advanced AI systems.
The tech mogul was one of the founders and investors of OpenAI, but he reportedly stepped down as a board member citing concerns over OpenAI's approach to AI safety. He even signed an open letter that urged AI companies to pause training AI systems more powerful than GPT-4 for at least 6 months.
