SAN FRANCISCO, Sept 25 – OpenAI, the innovative company behind ChatGPT, is reportedly planning a significant transformation of its business model. Sources indicate that OpenAI will shift from its current structure, dominated by a non-profit board, to a for-profit benefit corporation. This strategic move aims to enhance the company’s appeal to investors while maintaining its mission to create beneficial artificial intelligence.
Under the new arrangement, the existing non-profit organization will remain intact, retaining a minority stake in the for-profit entity. This restructuring is expected to affect how OpenAI governs its AI development and mitigates associated risks. Notably, CEO Sam Altman will receive equity in the for-profit venture for the first time, which may be valued at a staggering $150 billion following the changes. Furthermore, the company is exploring ways to eliminate existing caps on investor returns, according to insiders who spoke on the condition of anonymity.
An OpenAI spokesperson emphasized the company’s commitment to building AI that serves the greater good, asserting, “We remain focused on building AI that benefits everyone, and we’re working with our board to ensure that we’re best positioned to succeed in our mission. The non-profit is core to our mission and will continue to exist.”
The reported restructuring plan reveals considerable governance shifts at OpenAI, which has become a crucial player in the AI landscape. Details of the corporate changes are still under negotiation with legal teams and shareholders, and the timeline for implementation remains unclear.
This development comes amid notable changes in OpenAI’s leadership. Mira Murati, the company’s long-serving chief technology officer, recently announced her departure, while Greg Brockman, OpenAI’s president, has been on leave.
Founded in 2015 as a non-profit organization focused on AI research, OpenAI introduced the for-profit OpenAI LP in 2019, allowing it to secure substantial investment from Microsoft and further advance its research capabilities. The launch of ChatGPT in late 2022 catapulted OpenAI into the global spotlight, drawing over 200 million weekly active users and sparking a frenzy of investment in AI technology.
The company’s valuation has surged dramatically, escalating from $14 billion in 2021 to approximately $150 billion in the latest round of convertible debt discussions. This surge has attracted high-profile investors, including Thrive Capital and Apple.
Initially, OpenAI’s unique structure aimed to ensure that its for-profit subsidiary would be held accountable by the non-profit board, reinforcing its mission to develop “safe AGI that is broadly beneficial.” This governance model came under scrutiny last November when a boardroom crisis led to Altman being ousted, only to be reinstated five days later following strong support from employees and investors.
Since then, the board has welcomed new technology executives, now chaired by Bret Taylor, a former co-CEO of Salesforce, who has since founded his own AI startup. Any changes to the corporate structure will still require approval from the non-profit board, which consists of nine members.
While the shift away from non-profit control may align OpenAI more closely with typical startup practices—an approach welcomed by many investors—it raises concerns within the AI safety community about the company’s accountability in pursuing its goals. Earlier this year, OpenAI disbanded its superalignment team, which was dedicated to addressing long-term AI risks.
The extent of the equity stake that Altman will receive remains uncertain. Previously, Altman, already a billionaire from his various entrepreneurial ventures, opted not to take an equity position in OpenAI, citing the necessity for a board majority of independent directors without financial interests in the company. He has expressed that his motivations stem from a passion for the work rather than financial gain.
The impending restructuring of OpenAI could result in a model similar to that of competitors such as Anthropic and Elon Musk’s xAI, both of which are classified as benefit corporations. These entities prioritize social responsibility and sustainability alongside their profit motives, reflecting a growing trend among tech companies to balance business objectives with broader societal goals.