OpenAI details plans for becoming a for-profit company
SAN FRANCISCO — OpenAI revealed details Friday about its plans to adopt a new corporate structure that will remove the company from control by a nonprofit that has been the focus of contention.
OpenAI’s leaders have been privately discussing a change for several months but had provided few specifics.
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In a company blog post published Friday, OpenAI said it planned to restructure as a public benefit corporation, or PBC, which is a for-profit corporation designed to create public and social good. OpenAI rivals like Anthropic and Elon Musk’s xAI use a similar structure.
“The PBC is a structure used by many others that requires the company to balance shareholder interests, stakeholder interests, and a public benefit interest in its decision making,” the company said. “It will enable us to raise the necessary capital with conventional terms like our competitors.”
A year ago, the board of the nonprofit tried to fire CEO Sam Altman. It failed, but the incident spooked OpenAI’s investors, including Microsoft. In the months since, Altman and his colleagues have been working toward a new structure.
With the change in structure, Altman and his colleagues must find ways to compensate the nonprofit for its loss of control. OpenAI said the nonprofit would receive shares in the PBC but added that the value it would receive was still being negotiated by independent financial advisers.
The plan “would result in one of the best resourced nonprofits in history,” the company said in its blog. OpenAI’s latest funding round valued the company at $157 billion.
Altman founded OpenAI as a nonprofit in 2015 with several AI researchers and entrepreneurs, including Musk. The aim, Altman and his co-founders said, was to build AI for the benefit of humanity — not for corporate shareholders.
But by 2018, OpenAI’s founders realized that building powerful AI technology would require far more money than they could raise through a nonprofit.
This article originally appeared in The New York Times.