ChatGPT creator OpenAI plans to restructure into a for-profit organization next year, according to a blog post the company published on Thursday outlining its transition into a Delaware Public Benefit Corporation (PBC).
OpenAI said it must “evolve” to advance its mission of ensuring artificial general intelligence (AGI) — autonomous systems that can perform most economically valuable tasks better than humans can — benefits all of humanity.
“As we enter 2025, we will have to become more than a lab and a startup — we have to become an enduring company,” OpenAI wrote in its blog post. “The world is moving to build out a new infrastructure of energy, land use, chips, data centers, data, AI models, and AI systems for the 21st century economy. We seek to evolve in order to take the next step in our mission.”
OpenAI’s Board of Directors is evaluating its current corporate structure with the following objectives:
- Choose a non-profit / for-profit structure that is best for the long-term success of the mission.
- Make the non-profit sustainable.
- Equip each arm to do its part.
OpenAI, founded in 2015 as a non-profit research lab, is currently structured as a for-profit organization controlled by the original non-profit. Its current, “bespoke” corporate structure came about as the organization’s experiments became increasingly capital-intensive and called for outside funding.
In 2019, OpenAI created a for-profit arm, allowing it to accept outside investment from venture capitalists and companies like Microsoft. However, the for-profit has a capped profit share for investors and employees.
OpenAI noted in its blog post that the company must once again “raise more capital than we’d imagined.” To that end, the AI giant plans to transform its for-profit organization into a Delaware PBC with ordinary shares of stock and a more conventional appeal to investors.
Transitioning into a PBC would allow OpenAI to raise the capital its mission requires and “balance shareholder interests, stakeholder interests, and a public benefit interest” in its decision-making. OpenAI’s original mission will serve as the PBC’s public benefit interest.
The move would also create one of the best-resourced non-profits in history, per OpenAI. OpenAI’s existing non-profit would receive shares in the PBC “at a fair valuation determined by independent financial advisors.”
“The PBC will run and control OpenAI’s operations and business, while the nonprofit will hire a leadership team and staff to pursue charitable initiatives in sectors such as health care, education, and science,” OpenAI explained.
OpenAI closed a $6.6 billion funding round in October at a $157 billion valuation — under terms that it would complete a for-profit transition within two years. However, OpenAI’s for-profit ambitions won’t be short of challenges.
Tesla CEO and X owner Elon Musk, who was also one of OpenAI’s original co-founders, has filed for an injunction to block the company’s transition to a for-profit. Musk has accused OpenAI of abandoning its philanthropic founding principles and hindering the fundraising efforts of his own AI company, xAI, which is developing rival technologies.
Meta, another AI rival, has also publicly protested against OpenAI’s planned conversion. Earlier this month, the social media behemoth sent a letter to California attorney general Rob Bonta, claiming that allowing the transition would have “seismic implications for Silicon Valley.”
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