OpenAI, the maker of ChatGPT, is preparing for a sweeping makeover under which it will convert its core business into a for-profit benefit corporation and transfer control from its board of directors, according to people familiar with the move.
This step is aimed at highlighting OpenAI prominently lucrative to the investors at the same time retaining its mission-driven pace.
A nonprofit OpenAI arm will survive but own only a minority stake in the newly reconfigured for-profit company. This can potentially reshape how the firm manages risks emanating from AI, an important aspect of contention for those thinking about AI safety.
$150 billion in equity share will be given to Sam Altman, CEO OpenAI after the restructuring process.
Till now, Altman wanted to retain the independence of a nonprofit board, though he had rejected equity altogether. He stands to gain now from the exploding valuation of the company, thanks to the stellar performance of products such as ChatGPT.
An OpenAI spokesperson said the not-for-profit remains part and parcel of the company’s mission, explaining, “We stay focused on building AI that benefits everyone, and we’re working with our board to confirm of being rightly positioned to success in the objectives.”
There have been changes at OpenAI, most specifically the recent resignation of longtime Chief Technology Officer Mira Murati and a leave of absence for President Greg Brockman. These happen as the valuation of the company has skyrocketed from $14 billion in 2021 to a projected $150 billion.
Indeed, OpenAI’s original governance model was aimed at ensuring that its creation of artificial general intelligence would benefit society. The for-profit subsidiary is under the umbrella of the non-profit, propelling the company’s mission to create safe and beneficial AI. It has become the focal point of controversy following a boardroom coup late last November when Altman was temporarily forced out before being reinstated days later with strong backing from both employees and investors.
This will likely be welcomed by investors, who will appreciate the added flexibility in this step toward a more traditional startup model. However, there is likely to be a pushback from the AI safety community, particularly following the disbandment of OpenAI’s superalignment team, which had dedicated efforts put into averting long-term risks with AGI. The motion raises further questions over whether the company can police itself as it continues pushing forward with the development of advanced AGI.
A benefit corporation is basically a for-profit, but it focuses on social responsibility and sustainability.
While the amount of equity to be taken by Altman will never be known, he continues saying he is motivated to work on designing a new future for the company based on passion rather than an interest in possible monetary compensation; after all, he’d said before that he has “enough money.” The restructuring comes at a time when OpenAI will have to embark upon its mission of trying to create AI in a responsible manner while trying to win over a growing population of investors.
