The Evolution of OpenAI's Organizational Structure

OpenAI backs off push to become for-profit company

OpenAI announced on Monday that the artificial intelligence (AI) giant is scuttling its plan to move the company away from a nonprofit structure to becoming a for-profit company.

The ChatGPT-maker created a for-profit limited liability company (LLC), which it will now convert into a public benefit corporation that considers the interests of shareholders as well as OpenAI's mission. OpenAI's nonprofit will have operational control over the public benefit corporation and will be a large shareholder in it.

Reason for the Decision

"We made the decision for the nonprofit to retain control of OpenAI after hearing from civic leaders and engaging in constructive dialogue with the offices of the Attorney General of Delaware and the Attorney General of California," OpenAI Chairman Bret Taylor said in a statement.

"We thank both offices and we look forward to continuing these important conversations to make sure OpenAI can continue to effectively pursue its mission of ensuring AGI benefits all of humanity."

CEO's Perspective

OpenAI CEO Sam Altman, who prompted the company's exploration of moving to a for-profit structure to make it easier for the company to raise the large amounts of money for investments he thinks will be needed to achieve artificial general intelligence (AGI), sent a letter to employees explaining the decision and what it means for the company.

Future Plans

He added that public benefit corporations, which will be the new structure for OpenAI's for-profit entity, have "become the standard for-profit structure for other AGI labs like Anthropic and X.ai, as well as many purpose-driven companies like Patagonia. We think it makes sense for us, too."

"Instead of our current complex capped-profit structure – which made sense when it looked like there might be one dominant AGI effort but doesn't in a world of many great AGI companies – we are moving to a normal capital structure where everyone has stock. This is not a sale, but a change of structure to something simpler," Altman wrote.

The OpenAI co-founder went on to say that the company wants "to be able to operate and get resources in such a way that we can make our services broadly available to all of humanity, which currently requires hundreds of billions of dollars and may eventually require trillions of dollars. We believe this is the best way for us to fulfill our mission and to get people to create massive benefits for each other with these new tools."

Original article source: OpenAI backs off push to become for-profit company