It reminds me of the loyalty successful generals like Caesar and Napoleon commanded from their men. The engineers building GPT-X weren’t loyal to The Charter, and they certainly weren’t loyal to the board. They were loyal to the projects they were building and to Sam, because he was the one providing them resources to build and pumping the value of their equity-based compensation.
They were not loyal to the board, but it is not clear if they were loyal to The Charter since they were not given any concrete evidence of a conflict between Sam and the Charter.
Feels like an apt comparison given that the way we find out now is what happens when some kind of Senate tries to cut to size the upstart general and the latter basically goes “you and what army?”.
Another key difference is that the growth is currently capped at 10x. Similar to their overall company structure, the PPUs are capped at a growth of 10 times the original value.
As the company was doing well recently, with ongoing talks about a investment imply a market cap of $90B, this would mean many employees might have hit their 10x already. The highest payout they would ever get. So all incentive to cash out now (or as soon as the 2-year lock will allow), 0 financial incentive to care about long term value.
This seems worse in aligning employee interest with the long term interest of the company even compare to regular (unlimited allowed growth) equity, where each employee might hope that the valuation could get even higher.
Also:
It’s important to reiterate that the PPUs inherently are not redeemable for value if OpenAI does not turn a profit
So it seems the growth cap actually encourages short term thinking, which seems against their long term mission.
It reminds me of the loyalty successful generals like Caesar and Napoleon commanded from their men. The engineers building GPT-X weren’t loyal to The Charter, and they certainly weren’t loyal to the board. They were loyal to the projects they were building and to Sam, because he was the one providing them resources to build and pumping the value of their equity-based compensation.
They were not loyal to the board, but it is not clear if they were loyal to The Charter since they were not given any concrete evidence of a conflict between Sam and the Charter.
Feels like an apt comparison given that the way we find out now is what happens when some kind of Senate tries to cut to size the upstart general and the latter basically goes “you and what army?”.
From your last link:
As the company was doing well recently, with ongoing talks about a investment imply a market cap of $90B, this would mean many employees might have hit their 10x already. The highest payout they would ever get. So all incentive to cash out now (or as soon as the 2-year lock will allow), 0 financial incentive to care about long term value.
This seems worse in aligning employee interest with the long term interest of the company even compare to regular (unlimited allowed growth) equity, where each employee might hope that the valuation could get even higher.
Also:
So it seems the growth cap actually encourages short term thinking, which seems against their long term mission.
Do you also understand these incentives this way?