OpenAI, the artificial intelligence research company, has announced plans to transition its current corporate structure, a move aimed at better aligning its operations with its ambitious goal of developing artificial general intelligence (AGI) for the benefit of humanity. This proposed shift involves converting its existing for-profit arm into a Delaware Public Benefit Corporation (PBC).
The company currently operates with a for-profit entity controlled by a non-profit, which includes a capped profit model for investors and employees. However, in a recent public statement, OpenAI outlined its intention to move towards a PBC structure with ordinary shares of stock. This transition, according to OpenAI, would better enable it to pursue its mission while attracting necessary capital.
This restructuring proposal follows earlier reports detailing discussions about compensating the non-profit arm for ceding control. OpenAI has confirmed that its current non-profit structure does not allow the board to fully consider the interests of those financing the mission. The envisioned PBC will control OpenAI's operations and business, while the non-profit will focus on charitable initiatives in areas like healthcare and education.
OpenAI claims that the new structure would allow it to balance shareholder interests, stakeholder concerns and a public benefit interest, all while securing funding with conventional terms. The non-profit organization will receive shares in the PBC at a fair market valuation, determined by independent financial advisors, establishing itself as a well-resourced organization with shares in the PBC.
Despite these planned changes, the company faces opposition. Co-founder Elon Musk has filed an injunction to halt the restructuring, accusing OpenAI of betraying its original philanthropic mission. Meta, another AI rival, has also voiced concerns about the conversion, arguing that the move has seismic implications for Silicon Valley.
The proposed change comes as OpenAI continues to deal with a recent major funding round which requires a for-profit transition to be completed within two years and a high-level talent outflow over concerns about prioritizing commercial products over safety. Notably, OpenAI's current structure, which includes the power to determine when AGI is achieved, was a factor in the abrupt ousting of its CEO, Sam Altman, last year.
