OpenAI is said to be “pursuing” plans to abandon its nonprofit roots and restructure as a for-profit entity — a move that could insulate Sam Altman and his allies from “hostile takeovers” or opposition to their leadership.
The firm’s board is planning to restructure itself as a public benefit corporation — an unusual structure in which its leaders would weigh social impact and profit when making decisions, The Financial Times reported. Rival firms like Elon Musk’s xAI and Amazon-backed Anthropic use the framework.
If the move is finalized, the nonprofit entity that has overseen OpenAI since it was founded in 2015 will continue to exist, but will no longer be in control of the firm’s operations.
The restructuring will allow OpenAI to take a “multiple approach to fiduciary obligations” and a “safe harbor” from any activist investors or attempts to challenge Altman, a person with knowledge of the talks told the FT.
Altman was famously fired from the firm’s nonprofit board of directors last fall. Altman returned as CEO within days as part of talks that saw the resignation of nearly all previous board members.
Last week, OpenAI raised $6.6 billion in a funding round that valued the company at $157 billion. This is despite the fact that the firm has been burning cash at a rapid clip while developing its upcoming AI models.
Sources familiar with OpenAI’s thinking told the newspaper that no final decisions have been made and that the restructuring will likely take time to complete. The nonprofit unit, which would acquire a stake in OpenAI’s for-profit corporation, is not expected to be led by Altman.
“OpenAI wants to maintain that social licence, with both a mission and a duty, creating cutting-edge technology,” a source told the FT.
The Post has contacted OpenAI for comment.
Reports of OpenAI restructuring discussions emerged last month on the same day that chief technology officer Mira Murati and two other senior executives resigned from their posts.
Their departures were the latest in a significant exodus of top OpenAI executives who have resigned or taken extended leave since the start of the year.
OpenAI has said it is “focused on building AI that benefits everyone, and we are working with our board to ensure we are best positioned to succeed in our mission.”
“The nonprofit is central to our mission and will continue to exist and thrive,” the company said in a statement when reports of a potential restructuring first surfaced last month.
The fundraising round was led by Josh Kushner’s Thrive Capital, with other participants including Microsoft, AI chip supplier Nvidia, Khosla Ventures, SoftBank, Abu Dhabi state-backed fund MGX, Altimeter Capital and Fidelity.
The potential restructuring was said to be a sticking point for investors, who reportedly could renegotiate OpenAI’s valuation – or get their money back entirely – if the turnaround is not complete within two years, Reuters reported.
Altman – who has faced scrutiny over what critics have described as an aggressive and domineering leadership style – is expected to take an equity stake in the restructured OpenAI, although the exact terms remain unclear.
During a staff meeting last month, Altman described reports that his stake could approach 7% – valuing it at more than $10 billion – as “ridiculous”.
Elsewhere, some critics have accused Altman of prioritizing rapid progress over safety as he builds advanced AI that could potentially pose a threat to humanity.
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