OpenAI says its corporate structure must evolve to ensure AI artificial general intelligence (AGI) can complete most tasks that benefit all humans.
OpenAI currently has a for-profit entity controlled by a non-profit organization that shares “profits” with investors and employees. A car Blog post In a release on Friday, the company said it plans to transfer common stock to the Delaware Public Benefit Corporation (PBC) for its current profits and the OpenAI mission as its public benefit.
There were those details. reported elsewhere.. The New York Times in December; disclosed. OpenAI is in talks to pay its nonprofit billions of dollars to relinquish control of it. However, this is the first time that OpenAI has outlined its proposal in a public memo.
“As we enter 2025, we must become more than a lab and startup, we need to become a sustainable company,” OpenAI wrote in its post. “The world is moving to build a new infrastructure of energy, land use, chips, data centers, data, AI models and AI systems for the 21st century economy. We are looking to evolve to take the next step in our mission.”
OpenAI says the establishment of the PBC will allow it to “balance the interests of shareholders, the interests of shareholders and the public interest” in decision-making. It will also create one of the best-resourced nonprofits in history, OpenAI says. OpenAI's current non-profit organizations will receive shares in PBC at fair value determined by independent financial advisors.
“We remain both a non-profit and for-profit organization today,” OpenAI wrote. “Our current structure doesn't allow the board to directly consider the interests of those who fund the mission, and does so much more easily than control profits to nonprofits. OpenAI's PBC It will control operations and operations, and the nonprofit will hire a leadership team and staff to carry out philanthropic activities in areas such as healthcare, education and science.”
OpenAI was founded in 2015 as a non-profit research lab. But as its experiments became more capital intensive, was created. Its current structure is to take outside investments from VCs and companies. including Microsoft.
OpenAI in October rose up 6.6 billion worth of $157 billion, increasing its total to $17.9 billion. The company still expects to lose money this year—$5 billion; according to to CNBC — and the terms of its latest funding round require it to complete a profitable turnaround within two years.
The scheme faces difficulties.
Billionaire Elon Musk, co-founder of OpenAI, has one. Imported. An injunction to halt the company's for-profit transition accused OpenAI of abandoning its original charitable mission. Musk accused OpenAI of withdrawing capital from his own AI company xAI by extracting pledges from investors to fund it.
There is OpenAI. called. Musk's complaints are “baseless” and plain sour grapes.
Facebook's parent company and AI competitor Meta is also supporting efforts to block OpenAI's conversion. Must submit in December. Sent. He sent a letter to California Attorney General Rob Bonta arguing that allowing the move would have “seismic implications for Silicon Valley.”
“If OpenAI's new business model is valid, non-profit investors will receive the same profits as conventional for-profit investors, while benefiting from government-funded taxes,” Meta wrote in the letter.
OpenAI competitors such as xAI and Anthropic are organized as PBCs but do not have a non-profit component.
The structure of OpenAI as it exists today. after all CEO Sam Altman was abruptly ousted last November, much to the dismay of investors. in particular Microsoft. This gives OpenAI's board the power to determine exactly when OpenAI's AGI is successful, and exempts this AGI from licensing agreements it enters into with end users.
One of those customers is Microsoft, Microsoft and OpenAI. specific Internal financial definition According to AGI's The Information, the two companies signed an agreement last year stating that OpenAI will only be successful when OpenAI develops AI systems that generate at least $100 billion in revenue.
OpenAI continues to handle. One outflow of Advanced Talent Partly because of concerns that the company is prioritizing commercial products at the expense of safety. Carroll Wainwright, a former employee who researched aligning AI systems with safety policies, wrote in the letter. Post In X, OpenAI “acts like a non-profit (but) is a for-profit” and “should not be (trusted) when it promises to do the right thing later.”
in one Posts in the series Miles Brundage, a longtime policy researcher who left OpenAI in October, said he had “serious concerns” about OpenAI's transition plan.
“First, despite the fact that this is a central issue, there is surprisingly little discussion of the actual governance details,” Brundage wrote. “Secondly, A side-funded nonprofit is not a substitute for PBC product decisions … consistent with the primary nonprofit mission … Third, health care, As with education and science, This is a very narrow scope relative to the original OpenAI mission. What about promoting safety and good policy?”
Brundage said he was concerned that OpenAI's nonprofit would become a “side product” that licenses PBC to operate as a “normal company.”
“Besides the board details, what other safeguards have been put in place to ensure that the existence of a non-profit group does not (perhaps) shut down the PBC too easily?” he wrote. “(a) OpenAI (I know in part from the work I wrote there); Competitions become diagonal. What will PBC and non-profit organizations do about this?