OpenAI has announced its decision to become a commercial company. In the official blog, its board declared a structural change that will transfer management to the commercial department.
By 2025, OpenAI plans to transform into a Public Benefit Corporation (PBC), which is a commercial entity but operates for the public good. The commercial division will manage and oversee the operations and business of OpenAI, while the nonprofit OpenAI will retain a stake in the business but will lose its supervisory role.
The nonprofit will operate separately, with its own distinct leadership and staff, to undertake charitable initiatives in sectors such as health care, education, and science. The board of directors stated that this structure will allow OpenAI to gather the necessary capital to create general artificial intelligence, as well as to establish “one of the best nonprofits in history.” OpenAI’s competitors, Anthropic and Elon Musk’s xAI, also operate as PBCs.
Rumors that OpenAI would become a commercial company have been circulating for a while, as the company looks for ways to attract investors and raise funds to support its AI models that require data. In September, Bloomberg reported that CEO Sam Altman would receive about 7% of the shares as part of OpenAI’s plans to go commercial — Altman reportedly denied this.
“Hundreds of billions of dollars that major companies are currently investing in the development of artificial intelligence show that OpenAI really needs to continue its mission. We need to raise more capital than we imagined again. Investors want to support us, but on such a scale, they need regular capital and less structural uniqueness,” the board reports.
According to the structure defined by the OpenAI board, the nonprofit organization will receive shares of the PBC “at fair value determined by independent financial advisors.” Even after this move, OpenAI faces opposition. Last month, Elon Musk filed a petition to prevent OpenAI from becoming a commercial company, and Meta CEO Mark Zuckerberg also asked the Attorney General of California to block the transition.
Source: TheVerge
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