Next months of speculationOpenAI has finally revealed how it plans to become a commercial company. IN blog post OpenAI said Thursday it plans to transform its commercial arm into a Public Benefit Corporation sometime in 2025. PBCs or B Corps are for-profit organizations that attempt to balance the interests of their stakeholders while creating a positive impact on society.
“As we enter 2025, we will have to become more than just a laboratory and a start-up – we must become a sustainable company,” OpenAI said, adding that many of its competitors are registered as PBCs, including anthropic and even Elon Musk's own xAI. “(This move) will allow us to raise the necessary capital on customary terms, like others in this space.”
As part of the transformation, OpenAI's nonprofit arm will retain an equity stake in the for-profit arm “at a fair valuation determined by independent financial advisors” but will lose direct control of the company. “Our plan will create one of the most resourced nonprofit organizations in history,” OpenAI says.
Following the reorganization, the for-profit division will be responsible for overseeing OpenAI's “operations and business,” while the nonprofit division will operate separately with its own leadership team and focus on philanthropic work in health, education and science.
OpenAI did not say whether CEO Sam Altman will receive an equity stake as part of the restructuring. Last year, the OpenAI board of directors briefly fired Altman before bringing it back, sparking the institutional crisis that led to this week's announcement. According to some estimatesOpenAI's commercial arm could be worth up to $150 billion. OpenAI estimates that at least $10 billion will be needed to create artificial general intelligence in 2019. In October the company received $6 billion in new financing.
“The hundreds of billions of dollars that large companies are now investing in AI development show what it will actually take for OpenAI to continue its mission,” OpenAI said. “We again need to raise more capital than we anticipated. Investors want to support us, but at this scale of capital they want regular equity capital and fewer structural changes.”
Despite this week's announcement, OpenAI is likely to face many obstacles to its plan. In addition to your ongoing legal feud with Elon Musk, Meta recently sent a letter California's Attorney General, calling on him to stop OpenAI from becoming a for-profit company, saying the move would be “wrong” and “could lead to more similar startups that are theoretically philanthropic until they become potentially profitable.”
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