OpenAI No More A Non-Profit? Plans To Restructure Business Model Said To Be In Place, Altman To Get Equity

OpenAI's non-profit structure will still retain a minority stake once the new changes come in.

By : Shayak Majumder | Updated at : 27 Sep 2024 10:17 AM (IST)

OpenAI gained global prominence with the release of ChatGPT in late 2022, a widely successful AI chatbot that now boasts over 200 million weekly users.
Source : X/@my_entre_ai

OpenAI reportedly plans to restructure its business model, shifting from its current non-profit control to a for-profit benefit corporation, according to a report by Reuters based on source inputs. This move is expected to make the company more appealing to investors, though its non-profit entity will still retain a minority stake in the new structure, insiders reportedly revealed.

The proposed changes may also impact how OpenAI manages risks associated with artificial intelligence (AI), as the company adopts a new governance framework. Additionally, OpenAI CEO Sam Altman is set to gain equity in the restructured organisation, which could value the company at around $150 billion, the sources added.

Previously, Altman opted out of owning shares to maintain impartiality in decision-making.

'Building AI That Benefits Everyone'

An OpenAI spokesperson confirmed the ongoing restructuring discussions, emphasising the organisation's commitment to advancing AI for the greater good, reported Reuters. "We remain focused on building AI that benefits everyone," they said, ensuring that the non-profit will continue to play a central role in the company's mission.

This shake-up follows significant leadership transitions, including the sudden departure of Chief Technology Officer Mira Murati and a temporary leave of absence by President Greg Brockman. OpenAI, founded in 2015, first introduced its for-profit subsidiary, OpenAI LP, in 2019 to secure investments from partners like Microsoft.

ALSO READ: OpenAI Top Layer Quits: CTO Mira Murati, VP Research Barrert Zoph & CRO Bob McGrew Resign

$150-Billion Valuation

The company gained global prominence with the release of ChatGPT in late 2022, a widely successful AI chatbot that now boasts over 200 million weekly users.

The buzz around ChatGPT has led to a surge in OpenAI's valuation, climbing from $14 billion in 2021 to $150 billion in the latest round of funding talks, attracting interest from investors such as Thrive Capital and Apple.

AI Safety Still A Priority?

However, the restructuring could spark concerns about the company’s commitment to AI safety. OpenAI was initially structured to prioritise the safe development of artificial general intelligence (AGI). The planned governance overhaul, which needs approval from OpenAI’s non-profit board, may alter the balance between profit-driven goals and ensuring the long-term safety of AGI.

The shift would align OpenAI's corporate structure more closely with other AI companies like Anthropic and Elon Musk's xAI, both of which are registered as benefit corporations — companies designed to balance profit with social impact.

Published at : 27 Sep 2024 10:12 AM (IST)
Tags :
Technology AI OpenAI Sam Altman

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