Anthropic’s $2 trillion IPO puts powerful external trustees in spotlight

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In recent years, there has been a broader trend in Silicon Valley of tech companies diverging from conventional governance norms, making it harder for shareholders and the public to hold them to account.

Anthropic and OpenAI, the two major AI labs, have both designed unusual company structures, with self-appointed “guardians” of their mission rather than just traditional board directors with fiduciary duties.

OpenAI, which was founded as a nonprofit, became a cautionary tale in November 2023, when its board tried to fire its chief executive Sam Altman but lost the confidence of the company’s investors and employees. The incident led to most of the board members being replaced and a broader restructuring of the startup.

Anthropic’s trust is seen as less risky than OpenAI’s governance because it has a built-in “kill switch” that allows the trustees to be fired with the support of 85 percent of the shareholders’ voting power, a supermajority that could change when the company goes public, according to a person with knowledge of its structure.

A person close to Anthropic said the private investors who have backed the company across multiple rounds did so with full understanding of its governance structure, and several specifically cited its emphasis on safety as part of their investment thesis.

However, early investors also assumed the company would have to become a commercial juggernaut in order to fulfill its core mission, said one venture capitalist who has backed Anthropic.

“There was a judgment made by investors that capitalism would win in the end. Whatever you say, if you need a lot of money for compute and to compete [for the best model], investors assume there will be a business,” they said.

The move into public markets will expose that structure to a broader and potentially less-forgiving investor base as Anthropic faces mounting pressure to earn a profit.

“Under the firms’ current structures, these directors … may have little skin in the game and can or must ignore profit in decision-making. OpenAI has already had a … debacle. Anthropic, with a less risky structure, hasn’t,” wrote Harvard’s Fried in his July paper. “Investors should scrutinize both companies’ arrangements, which may still change before their IPOs, and price shares accordingly.”

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