OpenAI outlines its ambition to become a public benefit corporation.

The company that created ChatGPT, OpenAI, is considering reorganizing its organizational structure to better “support the aim of ensuring artificial general intelligence (AGI) benefits all of humanity.”

According to an official statement from the company, its board of directors is currently considering changing the corporate structure. One change would be to convert the company’s current for-profit division into a Delaware Public Benefit Corporation (PBC) while keeping its non-profit division until the end of the following year.

Since there had been previous rumors that OpenAI would alter the company’s internal operations and not everyone was in favor of this, the development itself is scarcely shocking. One of the company’s co-founders, Elon Musk, had already sued to stop the company from becoming a charity, and social networking behemoth Meta is also attempting to stop this change.

The nonprofit division of OpenAI would remain in place if the organizational transition is successful, but it would no longer have authority over the day-to-day management of the business. Rather, it would focus on philanthropic endeavors in science, education, and health care while also owning a portion of the for-profit company, whose shares are valued by independent financial advisors.

On the other hand, the for-profit organization will concentrate on overseeing the company’s “business and operations.”

We currently have a non-profit and a for-profit, and we will keep having both. The success of the for-profit allows the nonprofit to be better supported, have more funding, and be in a better position to carry out its objective. We see this mission as our greatest contemporary challenge. It necessitates enhancing AI’s potential, security, and beneficial effects on society all at once.

In an official statement, OpenAI stated, “In this post, we describe the history of our existing structure, why we think a change is necessary, and what precise change we are proposing.” Several AI companies, including Anthropic and Musk’s xAI, are also listed as PBCs.

Nine years have passed since Musk, Greg Brockman, Sam Altman, and others created OpenAI. Four years later, in response to the growing expense of creating sophisticated AI systems and to help finance its costly research, the company formed a for-profit subsidiary.

To promote its AI initiatives, OpenAI was able to get venture capital and relationships with significant Big Tech corporations, such as Microsoft, thanks to its corporate structure, which saw a nonprofit organization oversee a for-profit business.

Despite the early effectiveness of this strategy, the dual structure gradually started to show symptoms of strain as the nonprofit’s power over the for-profit arm made it more difficult to manage the business side of operations and raise financing.

The switch to a PBC would alter this, which might help OpenAI’s need for more capital to advance its AI objectives. The corporation anticipates losing almost $5 billion this year alone, despite having raised large sums of money in recent years, including a $6.6 billion investment round back in October.

The substantial expenditures needed for talent, research, and computer infrastructure are some of the reasons for this, as is the growing desire from investors for traditional equity in return for their funding, which the nonprofit-controlled organization found difficult to meet.