OpenAI Foundation Set To Spend Like New York State By 2040

By 2040, the OpenAI Foundation will spend a much as the State of New York does today. - The OpenAI Foundation owns 26% of OpenAI - What few know, is that it also has a 15 year right to buy shares at a $5 trillion valuation - OpenAI is expected to go public this year at a $1 trillion valuation - Is the warrant useless then? - No! The valuation gain on the warrant is just 11.3% per year, compared to a long term S&P500 return of 10% What does the warrant get the foundation? - We don't know! - One speculation: It recreates the original OpenAI 100x profit cap for other investors. - If this was so, it will be incredibly dilutive, getting the OpenAI Foundation to more than 50% stake in OpenAI Given AI continues to grow, and OpenAI does a modest 10x in the years post IPO and gets to $10 trillion valuation (not impossible given Nvidia is already past $5T) - Original stake = $2.6 trillion - New estimated warrant shares : $2.4 trillion - Total Foundation Stake: $5 trillion US foundations usually disburse about 5% of the liquid assets per year - Post IPO -> $13 billion per year - Post Warrants in 15 years - $250 billion per year In 2040, The OpenAI Foundation will spend as much as the state of New York does in a year. In terms of political and policy powers, what is being created is the equivalent of a large new state, except it doesn't have elected officials, just an appointed board responsible only to themselves.