OpenAI announces its intention to shift to a for-profit company-led business model
OpenAI, known for developing the chat AI 'ChatGPT,' has announced its intention to change its structure of having a for-profit subsidiary under a non-profit organization to one led by a for-profit company.
Why OpenAI's Structure Must Evolve To Advance Our Mission | OpenAI
OpenAI's for-profit plan includes a public benefit corporation
https://www.engadget.com/ai/openais-for-profit-plan-includes-a-public-benefit-corporation-163634265.html
OpenAI announces plans to convert to a public benefit corporation - San Francisco Business Times
https://www.bizjournals.com/sanfrancisco/news/2024/12/27/openai-public-benefit-corporation.html
OpenAI lays out plans for its for-profit transformation • The Register
https://www.theregister.com/2024/12/27/openai_for_profit_push/
OpenAI was founded in 2015 as a non-profit organization called OpenAI Inc. In 2019, a for-profit company called OpenAI Global LCC was established as a subsidiary of OpenAI Inc., resulting in an unusual form of operation in which a non-profit organization manages the for-profit division.
However, developing AI models is very costly, and as a non-profit organization, we cannot prioritize shareholder profits, which limits our ability to raise funds.
For this reason, CEO Sam Altman and others were aiming to 'commercialize' OpenAI.
OpenAI may turn into a for-profit organization, CEO Sam Altman reportedly in negotiations to acquire 7% of all shares - GIGAZINE
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However, Elon Musk, a former director and owner of X, filed a lawsuit and applied for an injunction in court, claiming that commercializing OpenAI was 'suspected of anti-competitive behavior.'
Elon Musk files for court injunction to block OpenAI from commercializing - GIGAZINE
Meta was in line with this movement.
According to the official announcement, OpenAI will entrust its shares and mission to a 'Public Benefit Corporation (PBC)' based on Delaware law. PBCs are a form of corporation that seeks to balance the interests of shareholders and stakeholders and the public interest, and are adopted by many companies in the United States. With this form, OpenAI will be able to easily raise more funds than before.
On the other hand, OpenAI will not become a commercial company; the non-profit organization, OpenAI Inc., will remain and pursue charitable activities in the fields of health, education, and science.
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