Vinod Khosla cites Tata Trust example, says nothing wrong with OpenAI's governance structure

Indian-American billionaire and venture capitalist Vinod Khosla said there is “nothing wrong” with the governance structure of ChatGPT-maker OpenAI after the AI startup dismissed and within a week reinstated cofounder and CEO Sam Altman.

On Wednesday, OpenAI said it is bringing back Altman as CEO, and also reconstituting its board to be led by former Salesforce co-CEO Bret Taylor.

Khosla added that several European companies have similar relationships between for profits and non-profits.


“Much has been said about @OpenAI's corp structure. Many European companies, Ikea, Bosch, Novo Nordisk Foundation, Bertelsmann Foundation, Carlsberg Foundation etc have similar relationships between for profits and non-profits. Nothing wrong with the best of both worlds. Just ask ChatGPT!,” he posted on X, the microblogging platform formerly known as Twitter.

“As to @OpenAI's structure being constantly referred to as odd, ‘Tata Trusts’ are a group of public charities by the Tata family members in India. These trusts are non-profit entities, and they play a significant role in the governance and ownership of the Tata Group, which is one of India's largest and oldest conglomerates,” he said in a separate post on X.


Microsoft CEO Satya Nadella had on Tuesday said there was a need for a governance overhaul at OpenAI after Altman's ouster.

Also read | OpenAI researchers warned board of AI breakthrough ahead of CEO ouster

Khosla's firm Khosla Ventures had invested in OpenAI during the company's transition from a nonprofit to a private enterprise in 2019. It is currently one of the primary investors in OpenAI along with Microsoft and Thrive Capital.

OpenAI has an unusual governance structure despite its transition from a nonprofit to a “capped-profit” company in 2019, “to build artificial general intelligence (AGI) that is safe and benefits all of humanity.”

The board oversees that mission for OpenAI Inc, which was launched as a non-profit eight years ago. The non-profit runs the “capped-profit” OpenAI LP.

Also read | OpenAI spat highlights perils of leaning on a single GenAI tool

According to the company’s website, the for-profit would be legally bound to pursue the nonprofit’s mission, and carry out that mission by engaging in research, development, commercialisation and other core operations. “In that way, the nonprofit would remain central to our structure and control the development of AGI, and the for-profit would be tasked with marshaling the resources to achieve this while remaining duty-bound to pursue OpenAI’s core mission,” according to the website.

Khosla had earlier said that his firm wanted Altman “back at OpenAI but will back him in whatever he does next”.


On November 19, in an x post, Khosla expressed support for Altman's potential return to OpenAI. He declared that Altman is a “once in a generation CEO”, commended his positive impact on the world, and said it was an honour to work alongside him.