Anthropic’s safety trust may weaken shareholder control

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 36:54

   that I found particularly fascinating, which is their long-term benefit trust, right? So they announced this thing, which is a really interesting, pretty radical form of corporate governance. So there's like the public benefit corporation. There's a new class of shares called Class T shares that are the long-term benefit trust, which is a financially independent. group of trustees, and they have the power to appoint and remove a majority of the board.

2. 37:24

   And that gives the trust huge influence over the corporate direction. They've essentially embedded the MTP into the governance, which is something really impressive and fascinating. So this is something I've never seen before. The test will come, okay, what happens when doing the right thing costs you $100 billion? Who makes that trade-off, right? This is like Larry and Sergey, right? It's a bit like that, but this goes even further, right?

3. 37:51

   It's not even Larry, it's not just the founders here. They're going to have a trust appointed, and the board members of the trust completely govern the company and the long-term future of the company. So they've embedded MTP totally into corporate governance, and they've turned that from just an MTP from a motivational statement into a governance mechanism. And the mission, the MTP gets a seat at the table and the power to choose the table.

4. 38:19

   So this I found really, really fascinating. Of course, you have to be concerned about who watches the guardians, who determines what's good for humanity, like how does that work? Who holds the trustees accountable? But directionally, I find this totally fascinating. Yeah, I think actually the class T stock, the financials are great and everything, but the class T stock, I was actually quite concerned by it.

5. 38:41

   Unlike OpenAI, which started as a nonprofit and then sleepwalked its weight, eventually threw a few lawsuits into public benefit corporation status and deals and anti-deals with Microsoft, Anthropic started life as a public benefit corporation. And to set up, yes, they had all sorts of advisory committees and board committees during their life as a private corporation, but now to step into life as a publicly traded company and to cede control over potentially the majority of their board seats, otherwise basically taking away Class A voting, Class A shareholders' abilities to influence major decisions and ceding it voluntarily, preemptively to this long-term benefit.

6. 39:27

   trust of independent, maybe not necessarily economically aligned individuals, I actually think is potentially concerning. Maybe this is a slightly overstrained analogy, but it almost reminds me of the way the Chinese Communist Party exerts ideological control over its companies. To I have a committee. a trust that's ostensibly motivated by certain ideological considerations, essentially overwhelming the economic interests of the broad public. I think this is qualitatively potentially different from founder control, where at least the founder created the company or co-founders and they're economically aligned with the outcome of the company and it's their baby and so on. This, my understanding with the long-term benefit trust is it's not their baby. They're bringing in folks to serve on the trust governance that perhaps the founders think are ideologically

7. 40:21

   aligned with them. But it just raises so many concerns in my mind that this is actually going to degenerate into ideological control. This will be one of the most powerful companies on the planet for quite some time. Yeah. And, you know, if you look at the history of great, great management teams and great, great entrepreneurs like Jensen Huang or Steve Jobs and the amount of pain and suffering and torture they went through in their journey to getting to the top of the pyramid, including Steve Jobs getting fired, humiliated, coming back, Jensen on the brink of bankruptcy multiple times. That grit is what a shareholder looks for in a management team, not the ideological, you know, fluffy stuff. And the short, the path of Anthropic from founding to success was so short and so pain-free. So that'll be an interesting test for this management

8. 41:12

   team. So now what they're putting in place there in terms of that structure, Alex is comparing it to the CCP, but I don't think that's out of bounds. I think it's very concerned about AI safety, very concerned about the future of the world, which I love and I appreciate that. And anyone who thinks that Dario is in it for the money has lost their mind. He's 100% in it for the good of the world. But as a shareholder, does that scare you? And it might, it might. It's actually the one weakness that I completely agree with everything Alex said. It should. And Alex's point is very valid, right? You could end up with a really, you could end up with groupthink at the trustee level. You could, there's like a total lack of accountability because it seems that trustees appoint each other. So you've got this circular mechanism there. So there are some,

9. 42:00

   challenges with this i just i do like the overall direction because it's putting uh it's it's not just it's not capital stakeholders it's a kind of a general civilization stakeholders uh we just have to make sure they're uh the right people uh and They're not communist-leaning Marxist types, right? Well, this is the danger. Maybe every generation is doomed to repeat the mistakes of the past and reinvent all the isms from the first part of the 20th century.

10. 42:32

    My concern is that some institution like this degenerates to a smoke-filled back room where decisions on the future light cone are made rather than it being at very minimum, say, the entire market helping to make decisions rather than just a few select individuals in a smoke-filled room. I want to just say one thing, one quick point.