On December 27, ChatGPT creator OpenAI outlined plans to adopt a new corporate structure, moving away from its non-profit control—a change that has sparked debate within the artificial intelligence industry.
Founded as a non-profit in 2015, OpenAI transitioned to a “capped” for-profit model, allowing a limited amount of profit-making. However, the company has been aiming to become a for-profit public benefit corporation (PBC) to attract greater investment.
In a blog post, the company announced its intention to reorganize as a Public Benefit Corporation (PBC), which “obligates the company to balance the interests of shareholders, stakeholders, and public benefits in its decision-making.”
“This shift will allow us to raise the required capital under conventional terms, similar to other companies in this field,” OpenAI explained. The company noted that it needs to secure more funding than initially anticipated, referencing the hundreds of billions of dollars major firms are currently investing in artificial intelligence development.
“Investors are eager to support us, but at this level of capital, they require traditional equity and less customized structure,” OpenAI stated.
At present, its organizational structure does not allow the board to directly consider the interests of those funding its mission.
Additionally, the current setup “limits the non-profit's role to merely overseeing the for-profit,” the company explained.
Under the new structure, the PBC will oversee OpenAI’s operations and business activities.
Meanwhile, the non-profit division will focus on building a team to pursue philanthropic efforts in sectors like healthcare.
OpenAI is facing intense scrutiny as a leading force in artificial intelligence, recently achieving a remarkable valuation of US$157 billion (S$213 billion).
Led by Sam Altman, the company has become one of Silicon Valley's most successful startups, gaining widespread attention in 2022 with the release of ChatGPT, its generative AI chatbot.
However, its corporate structure faced turmoil in late 2023 when the board unexpectedly dismissed Altman. Staff protested, leading to Altman’s reinstatement and the departure of those responsible for his removal.
In light of the situation, new investors are pushing for OpenAI to transition into a more traditional for-profit organization within two years.
The company's restructuring plans are expected to encounter challenges, with billionaire Elon Musk reportedly seeking a U.S. court order to block OpenAI from becoming a for-profit entity.