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OpenAI has made a surprising announcement, revealing plans to shift from its current non-profit model to a for-profit business structure. This change comes as the parent company of ChatGPT seeks to address ongoing governance challenges and reshape its future in the AI industry.
From Non-Profit to “Capped” For-Profit
Despite its 2015 non-profit inception, OpenAI is now a “capped” for-profit business, meaning it can make money, but only under limited parameters.
But now ChatGPT is trying to change its legal status to that of a for-profit public benefit corporation (PBC), which should open doors to more investment options.
With its reorganisation as a PBC, OpenAI must now weigh the needs of its stakeholders, shareholders, and the public good when making important choices.
“It will enable us to raise the necessary capital with conventional terms like others in this space,” the company stated in a blog post.
Additionally, the business emphasized that the board cannot directly examine the interests of those who would fund its objective under the present organizational framework.
The reorganization includes the PBC’s new role as supervisor of OpenAI’s operations and business. As a side project, the company’s charitable division will form a specialized team to spearhead charitable endeavors in fields including education, healthcare, and science. Notably, OpenAI competitors such as Anthropic and Elon Musk’s xAI also use PBCs.
