OpenAI is reportedly transitioning its main operations into a for-profit benefit corporation, a shift from its non-profit governance, according to individuals close to the situation as reported by Reuters. The strategic change is anticipated to enhance the organization's appeal to investors.
While the non-profit arm of OpenAI is set to remain operational and retain a minority ownership in the new for-profit entity, this development could influence the organization's approach to managing AI risks under the revised governance framework. Altman first outlined the restructuring of the company earlier this month.
Retaining Non-Profit Division
Reuters reports that Altman is poised to receive equity in the for-profit venture for the first time, with the company's valuation potentially reaching $150 billion post-restructuring. The move is also aimed at eliminating the limit on investor returns, added the sources, who wished to remain anonymous while discussing confidential matters.
An OpenAI spokesperson affirmed the company's dedication to developing AI that universally benefits, emphasizing ongoing collaboration with the board to align with the mission. The spokesperson reiterated the integral role of the non-profit in the company's mission.
Reuters initially reported the proposed changes to the corporate structure, which underscore substantial governance alterations at one of the leading AI firms. The restructuring process is currently being refined with legal advisors and stakeholders, and the timeline for its completion is yet to be determined, the sources mentioned.
Major Ongoing Departures
OpenAI's restructuring coincides with notable leadership transitions at the company. Mira Murati, the long-serving CTO, unexpectedly announced her exit this week. While acknowledging the challenges of leaving, she emphasized that this was the right time to embark on a new endeavor. Murati committed to ensuring a smooth transition, aiming to maintain OpenAI's positive trajectory.
OpenAI was established in 2015 as a non-profit dedicated to AI research and later introduced a for-profit subsidiary, OpenAI LP, in 2019, backed by funding from Microsoft to support its research endeavors.
OpenAI's distinctive governance model, which entrusts the oversight of its profit-driven subsidiary entirely to its non-profit entity, was initially established to fulfill its objective of developing “safe AGI” that would be advantageous on a wide scale, creating an artificial general intelligence comparable or superior to human intellect.
Drama and Controversy
This framework garnered significant attention last November amidst one of Silicon Valley's most notable corporate upheavals, when non-profit board members dismissed Altman due to a collapse in communication and a deterioration of trust. His reinstatement occurred swiftly within five days, buoyed by substantial backing from staff and financial backers.
The potential withdrawal of non-profit oversight might transition OpenAI towards operating more akin to a conventional startup, a change that has been met with approval from its investors, who have invested substantial funds into the enterprise.
Nonetheless, this shift could provoke apprehension within the AI safety sector regarding whether the organization maintains sufficient regulatory mechanisms to enforce accountability in its quest for AGI, especially after the dissolution of the superalignment team earlier this year, which was dedicated to addressing the long-term perils associated with AI.
