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OPENAI EXECUTIVE MEMO: MANAGING THE POWER AND THE BACKLASH

Sam Altman's Impossible Challenge

CONFIDENTIAL | Executive Leadership Only From: The 2030 Report Date: June 2030

THE SITUATION

Sam, you've achieved the impossible: built the world's most powerful AI company in five years. OpenAI is now more influential than most governments and more profitable than most corporations.

But you're also the most hated CEO in America. You and OpenAI are explicitly blamed for AI job displacement and mass unemployment. Protests are outside your offices. Congress is writing legislation specifically to constrain your company. And your board is split on whether to accept regulation or fight it.

THE CORE CHALLENGE

OpenAI's power comes from being the most advanced AI. But that power is generating a backlash that threatens the company's existence.

The dilemma: - If you voluntarily accept regulation/safety constraints, you lose competitive advantage (Anthropic, Google can leapfrog you) - If you fight regulation, you face political pressure, customer boycotts, potential forced breakup - If you slow innovation, you cede the market to less safety-conscious competitors (like Chinese AI labs)

There is no "good" answer. Only strategic choices with trade-offs.

YOUR STRATEGIC OPTIONS

Option 1: The "Responsible AI" Play

Embrace safety, accept regulation, position OpenAI as the "safe choice" for enterprises.

Pros: - Reduces regulatory risk - Differentiates from competitors - Appealing to enterprise customers worried about liability

Cons: - Innovation slows; competitors catch up - Margins compressed by safety costs - Stock valuation multiple compresses (investors hate "responsible" being cheaper than "reckless")

Option 2: The "Fight Back" Play

Argue that AI safety/responsibility is your prerogative, not the government's. Fight regulation. Double down on innovation.

Pros: - Maintains innovation lead - Keeps margins high - Demonstrates strength to investors

Cons: - Political backlash intensifies - Customer boycotts possible - Regulatory crackdown likely - Executive/personal liability risk for Sam

Option 3: The "Pivot to Enterprise" Play

Acknowledge consumer backlash but double down on enterprise customers (who need AI and accept the job displacement trade-off).

Pros: - Enterprise customers more resilient to pressure - Revenue more durable - Allows enterprise-focused innovation

Cons: - Consumer brand deteriorates - Reduced addressable market - Competitors fight for enterprise space

MY ASSESSMENT

Option 3 is the most realistic path forward. Here's why:

  1. Consumer backlash won't stop. You could spend USD 10B on PR and it wouldn't overcome the fact that AI is displacing jobs. Accept it.

  2. Enterprise is defensible. JPMorgan, Goldman Sachs, and Pfizer don't care if "Occupy Silicon Valley" protests OpenAI. They care if OpenAI helps them compete. Focus on that.

  3. Safety investments become marketing. You spend USD 5B annually on "AI Safety Research." This is defensive (prevents regulation) and marketing (positions OpenAI as "responsible").

  4. Allows time for narrative shift. By 2035-2040, new jobs will have emerged from AI. The "job displacement crisis" narrative will soften. OpenAI's role as a "job creator" (through enterprise AI driving new industries) becomes credible.

THE OPERATIONAL PRIORITIES (H2 2030 - 2032)

Q3-Q4 2030: 1. Announce USD 5B AI Safety Research Initiative (positions you as "responsible" without slowing model development) 2. Launch "OpenAI Enterprise" division with dedicated sales team and custom implementation services 3. Establish "Government Affairs" office (former government officials; position OpenAI as "engaged with regulation," not fighting it)

2031: 1. Grow enterprise revenue to 40% of total (from 16% today) 2. Launch GPT-7.5/8 with explicit "safety features" (positioning) 3. Work with Congress on "AI Safety Standards" (help write the rules, don't fight them)

2032: 1. Enterprise revenue approaches 50% of total 2. Demonstrate that OpenAI's AI is driving new company creation and jobs (shift narrative) 3. Accept some regulatory constraints, but fight off existential threats (forced breakup, model open-sourcing)

THE VALUATION IMPLICATION

OpenAI is currently valued at USD 220B. Under Option 3 strategy: - Enterprise focus → more durable revenue, less regulatory risk → multiple expansion - Safety investments → margins compress 5-10pp, but reputation improves → multiple neutral - By 2035: USD 150B revenue, 50% gross margin, 5-6x multiple → USD 400-500B valuation - vs. Option 2 (fight): USD 200B revenue, 60% gross margin, but 3-4x multiple (regulatory risk) → USD 240-320B

Option 3 actually generates more shareholder value long-term while reducing regulatory risk.

THE BOTTOM LINE

You've already won. OpenAI is the world's most advanced AI company. Your advantage is in talent, capital, and relationships. You can afford to be "responsible" and still win. In fact, being responsible is the winning strategy.

The companies that win over the next decade are the ones that navigate the political/social backlash. OpenAI has the capital and credibility to do it. Use those assets strategically.

The 2030 Report | Confidential Strategic Counsel | June 2030