Investors are eagerly awaiting the initial public offerings (IPOs) of SpaceX, OpenAI, and Anthropic, but these listings may reveal a concerning trend: the erosion of corporate governance.
The three firms have sought to govern cutting-edge technologies with custom-made rules, departing from traditional corporate governance frameworks.
One notable departure is the entrenchment of super-voting equity, which grants founders voting control despite owning a minority of the equity.
SpaceX's IPO filings cement a structure granting Elon Musk and other insiders shares with ten times the voting power of ordinary shares, securing him a clear voting majority.
Another departure involves jurisdiction-shopping and regulatory arbitrage, with states and stock exchanges competing to secure the listings.
SpaceX is using this competition to its advantage, moving to Texas and listing on Nasdaq to benefit from the exchange's new 'fast entry' rule.
The third departure is the use of hybrid structures, such as OpenAI's Public Benefit Corporation (PBC) and Anthropic's Long-Term Benefit Trust.
While these experiments are untested in situations with high stakes for humanity, investors and regulators must take notice.
Institutional groups are lobbying for governance changes, and governments and regulators should design future AI rules with these corporate structures in mind.
