OpenAI, founded a decade ago as a research organization, is considering a change to the AI company’s structure that would create a more conventional money-making corporation alongside a nonprofit arm.
The board is evaluating a plan that would turn OpenAI’s business into a public benefit corporation — an entity free to pursue income but with the goal of bettering society — while retaining a nonprofit side, according to a blog post Friday. As part of the new structure, the nonprofit arm would hold shares in the moneymaking entity.
Bloomberg previously reported that the company was considering such a move and has been in talks with regulators in California and Delaware about the potential change. Friday’s announcement signals that the board is poised to move forward with a restructuring.
OpenAI’s existing for-profit arm is currently controlled by its nonprofit organization. Under the proposal, the business would become a Delaware Public Benefit Corp., or PBC. The nonprofit entity would continue to exist as one of the “best-resourced nonprofits in history” and would then hold a “significant interest” in the for-profit arm, in the form of shares determined by independent financial advisers at a fair valuation, OpenAI’s board said.
When OpenAI was founded in 2015, it adopted the idealistic mission of building artificial intelligence that would be safe and beneficial to humanity. In 2019, OpenAI created the for-profit subsidiary to help fund the high costs of AI model development. By 2022, when OpenAI debuted its ChatGPT chatbot, the company became a superpower in the artificial intelligence industry — and put its operations under greater scrutiny.
