OpenAI Drops Plan to Switch into For-Profit, Sticks to Its Mission:
OpenAI chairman Bret Taylor says the company is no longer trying to switch from a nonprofit to a for-profit model. After months of exploring a shift to a for-profit model, OpenAI has changed its mind. On Monday, the company said its nonprofit arm will stay in charge of ChatGPT and its other AI tools, keeping its original mission at the center. They’ve decided to stick with their nonprofit structure.
In a letter to employees, Altman wrote “We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware.” Altman and the chair of OpenAI’s nonprofit board, Bret Taylor, said the board has made the decision for the nonprofit to retrieve control of OpenAI.
However, OpenAI is setting up a new company structure to help it grow- by switching from for-profit business to a public benefit corporation (PBC) like Anthropic and xAI that has to consider the interests of both shareholders and the mission. It will make it easier for OpenAI to raise more money in the future. In fact, the billions raised in the last two rounds depended on removing the cap on how much investors could earn.
Altman said that transitioning to a public benefit corporation “just sets us up to be a more understandable structure to do the things that a company of our scope has to do.” He added “We want to build a brain for the world and make it super easy for people to use for whatever they want.”
Under the new structure, the nonprofit OpenAI Inc. will regain full control over the for-profit PBC, and become one of its major shareholders. With the new setup, investors and employees will get regular stock that can keep increasing in value with no limit, according to spokesperson Steve Sharpe.
“There’s so much more demand to use AI tools than we thought there was going to be,” Altman said and the capital raise will aid the company to accomplish it’s mission which is centered around creating artificial general intelligence (AGI) — powerful AI designed to help all of humanity.
Moreover, he added, “We want our nonprofit to be the largest and most effective nonprofit in history that will be focused on using AI to enable the highest-leverage outcomes for people.”
