Founded as a non-profit in 2015, OpenAI added a for-profit subsidiary which was largely invested by Microsoft four years later.
Following the abrupt departure of its chief technology officer, Mira Murati, more senior executives are apparently leaving ChatGPT creator OpenAI in order to move forward with aspirations to become a for-profit business.
According to the sources, the OpenAI non-profit will continue to exist while owning a minority ownership in the for-profit corporation. The move may also have consequences for how the corporation tackles AI risks under a new governance structure.
Based out of San Francisco, this startup is on the path to change their corporate structure as it seeks $6.5 billion of new funding as per reports.
Under these corporate structures, OpenAI aims to become a for-profit benefit corporation. It will become an entity which is profitable but is strongly committed to public and social good which will no longer be in control of its non-profit board.
Although details of the report were not confirmed by OpenAI, a spokesperson from the company said that the startup’s nonprofit board would be retained.
The spokesperson further added that the company is mainly focused on building a system that is beneficial for all. OpenAI is said to be working together with the board to ensure that they are in a place to succeed in the mission. The nonprofit is core to their mission and will continue to exist.
Founded as a non-profit in 2015, OpenAI added a for-profit subsidiary which was largely invested by Microsoft four years later. On its website OpenAI describes its structure as “a partnership between our original nonprofit and a new capped profit arm”.
The ChatGPT developer, whose CEO, Sam Altman, has become the poster child for the AI boom, is allegedly on track for a new valuation of $150 billion under the new fundraising round, which is broadly comparable to Uber’s. According to sources, Apple and Nvidia are among the companies that could invest in the latest investment round.
The progress of OpenAI towards its goal of creating artificial general intelligence which they described as “AI systems that are generally smarter than humans”. The progress also alarmed their former employees.
William Saunders, a research engineer who left OpenAI this year, stated that he departed because he “lost faith” in the business’s ability to make responsible decisions about AGI, while Jan Leike, a former top safety researcher at the company, alleged in May that OpenAI prioritised “shiny products” over safety.
The company’s odd structure, in which the OpenAI nonprofit has complete control of the for-profit subsidiary, was originally designed to ensure the objective of generating “safe AGI that is broadly beneficial,” which refers to artificial general intelligence that is equal to or greater than human intelligence.
The structure came to light last November amid one of Silicon Valley’s most intense boardroom dramas, when members of the non-profit board fired Altman due to a breakdown in communication and a loss of trust. He was restored after five days with widespread support from employees and investors.
Ever since then, the board of OpenAI has been refreshed with increased tech executives which is chaired by Bret Taylor, former Salesforce co-CEO who now runs his own AI startup.
The loss of non-profit control may allow OpenAI to run more like a traditional startup, which is usually welcomed by the company’s investors, who have spent billions of dollars into it.
However, it may raise questions among the AI safety community about whether the lab still has adequate governance to hold itself accountable in its pursuit of AGI, given that it dissolved the super alignment team that focuses on AI’s long-term hazards earlier this year.
OpenAI’s new structure would be similar to that of its main competitor, Anthropic, and Elon Musk’s xAI, both of which are registered as benefit corporations, a type of for-profit that aims to promote social responsibility and sustainability while also making money.
