Anthropic was founded in 2021 to help humanity control and benefit from AI in the long term. But as Frontier Labs approaches its initial public offering, there is a class of humanity that is spiraling out of control. Those are the people who buy Frontier Labs stock on the open market.
Complex structures that allow founders like Elon Musk and Mark Zuckerberg to control their publicly traded companies without owning most of them are not uncommon in Silicon Valley. But Anthropic’s focus on AI safety has resulted in truly baroque corporate governance, with public shareholders having little say in most important decisions at AI companies, including board membership.
First, Anthropic is a public interest company, a for-profit company whose goal is to promote safety in AI and is legally allowed to weigh interests against the public mission. This status protects the board’s ability to make decisions about AI safety that are not based entirely on shareholder value without being sued by angry investors.
The board of directors is currently chaired by Anthropic president Daniela Amodei, and includes CEO Dario Amodei (her brother), Netflix co-founder Reed Hastings, former Microsoft and GM CFO Christopher Liddell, Novartis CEO Vasu Narasimhan, and Spark Capital partner Yasmin Razavi. There is one vacancy on the board of directors.
Second, Anthropic assigned significant control of its board of directors to a long-term benefit trust (LTBT). LTBT is an independent committee dedicated to keeping the company focused on its mission to benefit humanity. The trust owns a class of stock known as Class T directors that can elect and remove a majority of the company’s board of directors. The LTBT is chaired by Neil Shah, a global health expert and former managing director of GiveWell, a nonprofit organization that rates charities, and whose members include former Federal Reserve Chairman Ben Bernanke, national security expert Richard Fontaine, and Harvard University physicist Christopher Stubbs. There is currently one vacancy in LTBT. Existing members choose who to replace them.
Third, Anthropic’s seven founders jointly own a special class of stock that gives the majority 50.1% of shareholder voting rights and the ability to elect three members of the board of directors. If, for any reason, there is no majority of the founders, then and only then their shares will be voted in proportion to the holders of common stock.
Finally, the board can tick the LTBT. If LTBT appoints a “specific” one of its four directors or removes that director without cause (i.e., without any allegation of wrongdoing), the board’s nominating committee may refuse to approve the transfer and refer the decision to an employee vote.
Everything looks like this:
The dynamics of such complex structures are difficult to predict. We’ve already seen one notable example where a similar structure was essentially subverted. That’s the so-called blip in OpenAI. OpenAI’s board temporarily removed CEO Sam Altman, citing concerns that he was not being forthcoming. Thanks to the loyalty of the company’s employees to Altman, the board backed down and reinstated him, and a new governance structure was put in place. Anthropic’s structure appears to formalize that kind of employee power.
At Anthropic, a crack in the founders’ united front could give ordinary shareholders more say than expected, while employees could overturn LTBT’s board seats if they side with the board over a group of celebrities.
The founder’s control will not last forever. Ten years after the IPO, the founders can choose to terminate control of the company, or have it automatically terminate when fewer than three people remain. At that time, LTBT will continue to exist until 85% of its common stockholders vote to terminate or its board of directors elects to step down.
If neither special shareholder ceases to exist, and I hope it’s not due to an AI disaster, ordinary shareholders will eventually take control.
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