CEO Sam Altman comments that OpenAI may become a for-profit company without a board of directors
OpenAI has an organizational structure in which a for-profit corporation is placed under a non-profit corporation with a board of directors, but CEO Sam Altman said, 'We may transition from a non-profit corporation to a for-profit corporation in the future,' according to The Information, a foreign media outlet.
OpenAI CEO Says Company Could Become Benefit Corporation Akin to Rivals Anthropic, xAI — The Information
Sam Altman May Transition OpenAI to a For Profit Firm
https://www.cryptotimes.io/2024/06/15/openai-may-transition-to-unrestricted-for-profit-says-ceo-sam-altman/
Sam Altman says OpenAI could become a for-profit meaning it could eventually IPO - Neowin
https://www.neowin.net/news/sam-altman-says-openai-could-become-a-for-profit-meaning-it-could-eventually-ipo/
OpenAI CEO says company could become for-profit corporation, report says - BusinessToday
https://www.businesstoday.in/technology/news/story/openai-ceo-says-company-could-become-for-profit-corporation-report-says-433446-2024-06-15
OpenAI consists of three main organizations :
◆Non-profit organization OpenAI, Inc.
OpenAI, Inc. is a non-profit corporation ( 501-c-3 ) that aims to promote the development of artificial general intelligence (AGI). The corporation is governed by a 'board of directors' that includes CEO Sam Altman and others, and secures its operating funds by accepting donations.
◆OpenAI GP LLC
OpenAI GP LLC is a management company with the power to manage and govern OpenAI's for-profit subsidiaries and is 'fully controlled' by OpenAI, Inc. This entity allows OpenAI, Inc., a non-profit entity, to indirectly control the for-profit entities.
◆For-profit corporation OpenAI Global, LLC
OpenAI Global, LLC is a for-profit corporation under OpenAI GP LLC, which commercializes and develops AI. Microsoft owns 49% of the corporation, but there is a cap on the profit distribution to Microsoft and other investors. Any profits earned above the cap are returned to the non-profit corporation OpenAI, Inc. and used for the 'benefit of all humanity,' which is OpenAI, Inc.'s goal.
In addition, there are several for-profit corporations, including OpenAI OpCo, LLC and OpenAI, LLC.
The donations that nonprofits receive are not enough to cover the high costs of research and development, but for-profit corporations allow them to obtain more funding. However, some have raised concerns that the existence of for-profit corporations, which may prioritize the pursuit of profits, may contradict the claims of nonprofit organizations that aim to 'democratize AI.' Elon Musk, who helped launch OpenAI, also filed a lawsuit from a similar perspective, but later withdrew the lawsuit.
Elon Musk drops lawsuit against OpenAI - GIGAZINE
According to a report from The Information, CEO Sam Altman wants to make major changes to the structure that has the nonprofit corporation at the top.
It is unclear what changes will be made, but it is reported that they are aiming to become a ' B Corp ' - a type of company not under the control of a 'board of directors', as adopted by rival companies Anthropic and xAI. If this is realized, it will be possible to pursue profits while fulfilling its original purpose of contributing to social good. It has also been pointed out that transitioning to a for-profit corporation could pave the way for an initial public offering. On the other hand, OpenAI's board of directors will lose control of the company.
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