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OpenAI Announces Plan to Transform into a For-Profit Company
In a recent blog post, OpenAI’s board has announced plans to restructure the organization and transition from a nonprofit entity to a for-profit Public Benefit Corporation (PBC). This move is expected to have significant implications for the company’s operations and future direction.
According to the announcement, OpenAI will replace its existing structure with a new model that puts control in the hands of its for-profit arm. The current nonprofit will retain a stake in the business but lose its oversight role, instead focusing on charitable initiatives in areas such as healthcare, education, and science.
The move is seen as a necessary step to raise the capital required to build towards artificial general intelligence (AGI). As the company continues to invest heavily in large-scale AI models, it has become increasingly clear that the nonprofit structure is no longer viable for its ambitious plans. The board emphasized that “the hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing its mission.”
The new PBC model will allow OpenAI to raise capital from investors in a more conventional manner, something that was not possible under the nonprofit structure. However, this change has raised concerns about the potential loss of control and oversight by the nonprofit board.
This development comes as no surprise given the rumors circulating for months regarding OpenAI’s plans to transition into a for-profit entity. In September, Bloomberg reported that CEO Sam Altman would receive around a 7% equity stake in the company, although this was later denied by Altman himself.
The move has sparked controversy, with Elon Musk filing a motion to stop OpenAI from becoming a for-profit company and Meta CEO Mark Zuckerberg requesting California Attorney General Rob Bonta to block the transition.
Source: www.theverge.com
