Can Anthropic’s Shadow Board Cripple Its IPO?
Anthropic's upcoming IPO has a hidden power structure that could hand control of the board to an outside trust with a mandate to steer AI for humanity's benefit, and investors are starting to ask what happens when that mission conflicts…
The press and savvy investors have combed through Anthropic’s IPO documents. On Sunday, they found something called the Anthropic Long-Term Benefit Trust. It holds only 5% of Anthropic shares. Among other things, it can grant stock to non-profits. More importantly, it appears to have control over the Anthropic board.
The Long-Term Benefit Trust can appoint most of the AI giant’s board. It can appoint four board members. According to The Wall Street Journal, “Trustees can also block corporate actions. Its mandate is to steer AI for humanity’s long-term benefit.” Board members are not paid. The group also has some say in issuing debt and selling more than half the company.
Anthropic has already appointed a very powerful member to the oversight organization. In a government filing, the company announced: “Anthropic’s Long-Term Benefit Trust (LTBT) has appointed Dr. Ben Bernanke, a Distinguished Fellow at the Brookings Institution and former Chair of the Federal Reserve, as its newest member.” Dr. Neil Buddy Shah, the CEO of the Clinton Health Access Initiative, has also already been appointed.
It is not unusual for a board’s appointments to rest in one set of hands. A number of companies, from Meta (NASDAQ: META | META Price Prediction) to Alphabet (NASDAQ: GOOG) to Ford (NYSE: F), have dual-class voting structures. However, founders almost always control them, presumably because financial success is their main goal. Additionally, they control the sale of all or part of the company.
The new group could open a Pandora’s box of uncertainty about the AI company’s cutting-edge advances. If the LTBT views a management decision as something other than a “long-term benefit,” what do management and the rest of the board do?
Anthropic is in a race against Chinese AI advances and those of its major competitors like OpenAI. Can it afford to have any of its initiatives blocked? So far, the federal government has stayed out of this governance. IPO investors may see this as a risk to Anthropic’s ability to innovate without interference.
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