Anthropic's corporate structure

Anthropic amended their certificate of incorporation a few weeks ago, because they plan on doing an IPO soon. I think they'll probably amend it again immediately before they close the IPO, and that amendment will probably be a lot more interesting than the most recent one (i.e. that one would be the amendment that gives special voting rights to founders, as was reported). In this post I will describe the current (pre-IPO) corporate structure of Anthropic.

This post isn't very interesting; I'm mostly writing this to reference when I discuss Anthropic's corporate structure in the future, since it's not documented very well currently. I mostly focus on the aspects relevant to control of Anthropic's business, and not the parts that are only about economic benefits.

Directors

The board of directors has seven seats:

• 2 directors elected by common shareholders (Dario Amodei and Daniela Amodei)
• 1 director elected by voting preferred shareholders (Yasmin Razavi), called the Electing Preferred Director
• 4 directors elected by the Long Term Benefit Trust (Reed Hastings, Chris Liddell, Vas Narasimhan, and 1 vacant seat)

If there's a tie (e.g. due to the vacant seat), the CEO gets to break it.

While the board of directors can issue additional authorized stock with a simple majority vote, there are anti-dilution provisions that kick in for certain kinds of stock issuance (e.g. new employee option plans) if the Electing Preferred Director doesn't approve. Aside from that, the Electing Preferred Director doesn't have any other special powers in the certificate of incorporation itself (unlike in previous versions of the certificate of incorporation, where either 61% of directors or the EPD had to approve for certain matters listed in a secret agreement), the non-public Investors' Rights Agreement probably does give the EPD some powers.

There's no provision in the certificate of incorporation that would allow other shareholders to override the LTBT. Section IV(D)4(b) provides a mechanism for converting class T shares to normal common shares, but it requires the consent of the LTBT (plus a supermajority of multiple classes of shares). So the mechanism for dismantling the LTBT must live in the LTBT itself.

LTBT

The Long Term Benefit Trust (LTBT) owns 1 class T share of Anthropic PBC. It is governed by a trust agreement, but it isn't public and the LTBT isn't required to make any public filings about it. Presumably the trust agreement has a mechanism to let some large majority of Anthropic shareholders dissolve the trust.

According to Anthropic, the LTBT trustees are appointed by themselves ("Trustees serve one-year terms and future Trustees will be elected by a vote of the Trustees"), although it's possible that there are additional rules about trustee selection in the trust agreement that aren't public.

The certificate of incorporation implies that the LTBT is a party to a "Voting Agreement", but this agreement isn't public. It's possible it binds the LTBT to appoint directors in certain ways.

The LTBT has to be notified in advance about certain actions (e.g. Anthropic transferring a sufficiently capable model, or a majority of the shares being transferred), presumably so the LTBT can act (through its directors) to prevent them if the LTBT doesn't like those actions.

Conclusion

I really wish Anthropic and the LTBT were more transparent about their corporate structure! Anthropic's specified public benefit is "to responsibly develop and maintain advanced AI for the long term benefit of humanity"; it's in the public interest for Anthropic to be transparent about who controls and governs increasingly capable AI models. Anthropic should publish the LTBT Trust Agreement and the Voting Agreement. (They might publish those as a part of the IPO process soon.)

1. E.g. the parts about dividends, preferred share conversion, liquidation preferences, the relative rights of different preferred holders etc.
2. Technically the non-public Amended and Restated Voting Agreement defines the term, but I think it's reasonable to assume the preferred shareholder appointee is the Electing Preferred Director?
3. The announcement of his appointment didn't say he was appointed by the LTBT, but I can infer it was the LTBT by process of elimination.
4. Jay Kreps resigned his directorship (presumably due to a conflict of interest) in May; the LTBT has yet to appoint a replacement.
5. I think the LTBT should really get on filling that vacant seat!
6. Assuming the CEO is also a director (currently he is), and that he doesn't have a conflict of interest in the vote.
7. It used to own 1000 shares, but the September amendment did a 1000:1 reverse split of class T stock.
8. Specifically the certificate of incorporation exempts "the entry into the Voting Agreement" by the LTBT from being considered a Transfer. Another part of the certificate says that the term "Founders" is "defined in the Voting Agreement", which implies that the Voting Agreement is already in force.
9. To be clear I think Anthropic/LTBT should still publish those documents now, rather than wait to do it with the IPO process, but it's not that bad if they delay publishing them for a month or two.