- OpenAI plans to change its non-profit business status
- The step towards better AI future
- From startup to AI powerhouse
OpenAI plans to change its non-profit business status
On Friday, OpenAI, the maker of ChatGPT, unveiled plans for a structural overhaul that will see the AI leader no longer controlled by a not-for-profit company.
OpenAI was set up as a non-profit company in 2015, but in the meantime, it has become a "limited" for-profit company that can make money up to a specific limit.
It has now decided to become a for-profit public benefit corporation (PBC) as it will be able to attract more investment.
In a blog post, the company plans to transform itself into a PBC, which "requires it to consider the interests of shareholders, stakeholders, and the public in its decision-making."
"This will allow us to raise the capital we need in the normal course of business, like other companies of this type," OpenAI added.
The step towards better AI future
The company explained that it will have to raise more capital than previously thought, arguing that major companies spend hundreds of billions of dollars on AI development.
"Investors want to support us, but at this scale of capital, we need more conventional capital and fewer specific structural features," OpenAI said.
Currently, the company's structure does not allow the board to directly consider the interests of those who would fund its mission.
After the restructuring, PBC will control OpenAI's operations and business.
Its non-profit arm will build a team to carry out charitable initiatives in areas such as healthcare.
"As an artificial intelligence powerhouse, OpenAI is receiving increasing attention from regulators, recently reaching a staggering valuation of USD 157 billion.
From startup to AI powerhouse
Sam Altman led OpenAI to become one of the most successful start-ups in Silicon Valley's history. In 2022, it received global media attention with the launch of ChatGPT, a generative artificial intelligence chatbot.
But at the end of 2023, when the board unexpectedly sacked Sam Altman, the company's original set-up fell apart. Employees rebelled, Sam Altman was eventually reinstated as CEO, while those involved in his dismissal left the company.
Alarmed by the situation, the new investors demanded that OpenAI become a traditional for-profit company within two years.
Restructuring efforts will likely face obstacles as Elon Musk has reportedly already asked a US court to prevent OpenAI from becoming a for-profit company.
Based on ELTA reports
