OpenAI, the creator of ChatGPT, is reportedly planning a restructuring that will transform the company into a for-profit benefit corporation, reports Reuters, citing sources.
This move will shift control away from its non-profit board and is expected to make the company more appealing to investors.
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According to the sources, OpenAI non-profit will retain a minority stake in the for-profit entity, but the governance changes could impact how AI risks are managed.
After the reorganisation, OpenAI CEO Sam Altman is expected receive equity in the for-profit company for the first time.
The proposed restructuring is still being finalised with legal and shareholder consultations, and the timeline for completion is currently uncertain.
Amidst these changes, OpenAI has seen executive shifts, including the sudden departure of CTO Mira Murati and the sabbatical currently being taken by president Greg Brockman.
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By GlobalDataIn a statement, an OpenAI representative said: “We remain focused on building AI that benefits everyone, and we are working with our board to ensure that we are best positioned to succeed in our mission. The non-profit is core to our mission and will continue to exist.”
Since its inception as a non-profit AI research organisation in 2015, OpenAI has grown significantly, especially after the launch of ChatGPT in late 2022.
The app’s success has led to a valuation surge from $14bn in 2021 to an estimated $150bn.
Investors such as Thrive Capital and Apple have shown keen interest in the company’s convertible debt round.
OpenAI’s unique structure was designed to ensure the development of “safe AGI that is broadly beneficial.”
However, in November 2023, Altman was temporarily ousted by the non-profit board due to internal conflicts, only to be reinstated shortly after.
The board, now chaired by Bret Taylor, former Salesforce co-CEO, has since been refreshed with more tech executives.
The removal of non-profit control may align OpenAI’s operations more closely with typical startups, a change supported by investors.
However, this has raised concerns within the AI safety community about the company’s commitment to managing long-term AI risks, especially after dissolving its superalignment team earlier this year.
Regarding equity, it is not yet clear how much Altman will receive.
Altman, who is already a billionaire from his investments in multiple startups, had previously refrained from taking an equity stake to maintain a board majority of disinterested directors.
OpenAI’s new structure will resemble that of competitors such as Anthropic and Elon Musk’s xAI, which are also registered as benefit corporations.
