OpenAI outlines plans to becoming for-profit company
OpenAI was founded as a non-profit in 2015 and has since switched to a "capped" for-profit enterprise allowing for a limited level of money making.
But it has been seeking to become a for-profit public benefit corporation (PBC), which could attract more investment.
In a blog post, the company said it plans to restructure as a PBC, which "requires the company to balance shareholder interests, stakeholder interests, and a public benefit interest in its decision making."
"It will enable us to raise the necessary capital with conventional terms like others in this space," OpenAI added.
It said that it needs to raise more capital than imagined, citing the hundreds and billions of dollars that major firms are now putting into artificial intelligence development.
"Investors want to back us but, at this scale of capital, need conventional equity and less structural bespokeness," OpenAI said.
Currently, its structure does not allow the board to directly consider the interests of those who would finance its mission.
The structure also "does not enable the non-profit to easily do more than control the for-profit," the company said.
With the restructuring, the PBC will control OpenAI's operations and business.
Its non-profit arm will build up a team to pursue charitable initiatives in areas like health care.
OpenAI is under high scrutiny as an artificial intelligence powerhouse, reaching a staggering $157 billion valuation in recent times.
The company, led by Sam Altman, has become one of the most successful startups in Silicon Valley history -- propelled to headlines in 2022 when it released ChatGPT, its generative AI chatbot.
But its corporate set-up imploded in late 2023 when the board fired Altman out-of-the-blue. Staff rebelled and Altman was eventually reinstated, while those involved in his ouster left the company.
Alarmed by the situation, new investors have demanded that OpenAI become a more classic for-profit outfit within two years.
Its restructuring efforts will likely face obstacles, with Elon Musk reportedly asking a US court to stop OpenAI from converting into a for-profit enterprise.
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