OpenAI Maintains Nonprofit Oversight of For-Profit Operations
In a surprising turn of events, OpenAI has decided to retain its nonprofit governance structure amidst discussions of altering its business approach. This decision comes months after the organization expressed intentions to restructure.
Key Changes Announced
According to a recent blog post by OpenAI, the board of directors has determined that the nonprofit arm will continue to oversee the for-profit segment. “OpenAI was founded as a nonprofit, and is today overseen and controlled by that nonprofit,” stated Bret Taylor, the chairman of the board. He reaffirmed that this governance model will remain in place moving forward.
While the for-profit arm has existed under the nonprofit umbrella since 2019, it will transition into a public benefit corporation (PBC). This classification allows it to pursue profits while also considering public welfare in its decision-making process. The nonprofit division will maintain majority control of the PBC, solidifying its influence over business operations and initiatives.
Community and Legal Engagement
The choice to maintain nonprofit control follows consultations with civic leaders and engagement with the offices of the Attorney General in Delaware and California. In the preceding month, a coalition of over 30 civic leaders, along with former OpenAI employees and Nobel laureates, advocated against the shift away from nonprofit governance, raising concerns with the attorneys general.
Background on OpenAI
Founded in 2015 as a nonprofit organization, OpenAI transitioned to a “capped profit” model in 2019, allowing it to leverage investments while ensuring that excess profits would support its nonprofit endeavors. Microsoft has played a significant role in financing OpenAI, contributing nearly $14 billion since the partnership began.
Despite facing legal disputes with co-founder Elon Musk, OpenAI has surged in popularity with the launch of its AI chatbot, ChatGPT, which reached 500 million users per week by March 2023. The company also closed a historic $40 billion funding round earlier this year, further solidifying its valuation at $300 billion.
Conclusion
As OpenAI moves forward with its commitment to ensure that artificial general intelligence benefits humanity, the decision to uphold nonprofit oversight demonstrates a dedication to its foundational principles while navigating an evolving corporate landscape.