OpenAI has finally shared details about its plans to shake up its core business by moving to a for-profit business structure.
On Thursday, OpenAI posted confirmation on its blog that its existing for-profit arm will be converted into a Delaware-based public benefit corporation (PBC) in 2025. As a PBC, OpenAI would be required to balance the interests of its shareholders and stakeholders with the public interest. To achieve that, OpenAI would offer 'common stock shares' while using a portion of the profits to further its mission – 'to ensure Artificial General Intelligence (AGI) benefits all humanity' – to serve a social good .
To compensate for the loss of control over the profit motive, the nonprofit would have some shares in the PBC, but it is currently unclear how many of those will be allocated. Independent financial advisors will help OpenAI achieve a “fair valuation,” the blog said, while promising that the new structure would “multiply” the donations that previously supported the nonprofit.
“Our plan would result in one of the best-funded nonprofits in history,” OpenAI said. (At its last funding round, OpenAI was valued at $157 billion.)
OpenAI claimed that the nonprofit's mission would be more sustainable under the proposed changes, as the costs of AI innovation only continue to rise. The new structure would give the PBC control over OpenAI's operations and operations, while the nonprofit would hire “a leadership team and staff to pursue charitable initiatives in sectors such as healthcare, education and science,” OpenAI said.
Some of OpenAI's rivals, such as Anthropic and Elon Musk's xAI, use a similar corporate structure, OpenAI noted.
Critics had previously pushed back on this plan, arguing that humanity would be better served if the nonprofit continued to control OpenAI's for-profit arm. But OpenAI argued that the old way made it difficult for the board “to directly consider the interests of those who would fund the mission, and does not allow the nonprofit to easily do more than control the profit organizations.
