OpenAI is Nothing Like Tata Trusts’ Board Structure

With Sam Altman’s recent ousting by OpenAI’s board, the limelight fell on the board structure of the company, which facilitated the move. While the board framework is considered different from the norm, entrepreneur and venture capitalist Vinod Khosla, has called the OpenAI structure to be similar to that of Tata Trusts that are a group of philanthropic organisations in India which was established by the Tata family with close association to Tata Group. However, it is not an apple to apple comparison as both of them operate differently. 

Two Independent Bodies

Khosla mentioned in his tweet that the Tata Trusts play a significant role in the governance and ownership of the Tata Group, however, Ratan N Tata, the Chairman Emeritus of Tata Group, is the only common factor to Tata Trust and Group as he is the prominent board member for both; the point being - there are two boards that operates there. 

In OpenAI, there is only one board that controls all the functions, including both nonprofit and for-profit. Furthermore, the not-for-profit wing sits at the top of the OpenAI board hierarchy with controlling power over the for-profit wing as well. This is where the stark difference lies. 

OpenAI Structure. Source: Substack (Chamath Palihapitiya) 

Furthermore, Tata Trusts operate independently with a focused motive of providing for the society. Whereas Tata Group, which has 29 publicly listed enterprises that operate independently, comes under the guidance and supervision of its own board of directors. 

Vinod Khosla has been vocal in supporting Sam Altman from the time the ousting crisis began, and is now thrilled with his return. He has also shared other tweets comparing the board to other European conglomerates such as IKEA, Bosch and others, rather rallying a bit too much. 

While the new board has only three independent directors as of now, it is possible that the nine-member board that is speculated to be built will have members including VCs and others who can have prominent say in the company’s functioning.