Forbes StaffOpenAI’s history has been as a nonprofit research institution, but according to the latest reports, it will now fully convert into a for-profit corporation.
OpenAI has been known as a nonprofit research institution for all these years; however, the latest reports suggest that it is now all set to fully convert into a for-profit corporation, which will be accountable to shareholders. The so-far nonprofit institution that sells commercial products like ChatGPT may end its run as a nonprofit and transition into a for-profit corporation.
The AI company’s board is considering changing it into a public benefit corporation.
According to sources, the Artificial Intelligence company’s board looks forward to changing it into a public benefit corporation. OpenAI thus far has had a for-profit division, where most of its staff works, but it is controlled by its nonprofit board of directors, whose mission has remained to help humanity. However, this would soon change if the company chooses to convert the core of its structure to a public benefit corporation, which is a type of corporate entity supposed to help society and also be profitable. The source said that no official decision has been made by the board yet, and the timing of the shift also hasn’t been determined.
CEO Sam Altman on restructuring.
Recently, OpenAI’s CEO Sam Altman acknowledged in public remarks that the company is thinking about restructuring, but he also said that the departures of key executives the other day weren’t related. While in Italy, speaking at a tech conference, he mentioned that OpenAI has been considering an overhaul to get to the “next stage.” Without specifying anything, he said, “OpenAI will be stronger for it as we are for all of our transitions,” he told the Italian Tech Week event in Turin. He added, “I saw some stuff that this was, like, related to a restructure. That’s totally not true. Most of the stuff I saw was also just totally wrong. But we have been thinking about (a restructuring).” In a statement, OpenAI said it will retain a nonprofit arm. The written statement read, “We remain focused on building AI that benefits everyone, and as we’ve previously shared, we’re working with our board to ensure that we’re best positioned to succeed in our mission. The nonprofit is core to our mission and will continue to exist.”
Recent resignations of Chief Technology Officer Mira Murati, Chief Research Officer Bob McGrew, and another research leader, Barret Zoph, were “just about people being ready for new chapters of their lives and a new generation of leadership,” said Altman.
