FILE PHOTO: OpenAI is working on a plan to restructure its core business into a for-profit company. | Photo credit: Reuters
ChatGPT maker OpenAI is working on a plan to restructure its core business into a for-profit company that will no longer be controlled by a nonprofit board, people familiar with the matter told Reuters, in a move that would put the company in a bind. more attractive to investors.
The nonprofit OpenAI will continue to exist and have a minority stake in the for-profit company, the source said. The move could also have implications for how companies manage AI risks under the new governance structure.
Chief executive Sam Altman will also receive equity for the first time in the for-profit company, which could be worth $150 billion after the restructuring as it also tries to remove caps on returns for investors, sources added. The source requested anonymity to discuss personal matters.
“We remain focused on building AI that benefits everyone, and we are working with our board to ensure that we are in the best position to succeed in our mission. Non-profits are core to our mission and will continue to be,” and the OpenAI spokesperson said.
Details of the proposed corporate structure, first reported by Reuters, highlight significant governance changes taking place behind the scenes at one of the most important AI companies. The plan is still being worked out with lawyers and shareholders and a timeline for completing the restructuring remains uncertain, the source said.
The restructuring also comes amid several leadership changes at the start-up. Longtime OpenAI chief technology officer Mira Murati abruptly announced her departure from the company on Wednesday. Greg Brockman, president of OpenAI, has also been on leave.
Founded in 2015 as a non-profit AI research organization, OpenAI added the for-profit entity OpenAI LP in 2019 as a non-profit subsidiary, receiving capital from Microsoft to fund research.
The company attracted global attention with the launch of ChatGPT at the end of 2022, a generative AI application that provides human-like responses to text queries, which has become one of the fastest growing applications in history with more than 200 million active users per week, which is inactive . the global race to invest in AI.
Along with ChatGPT’s success, OpenAI’s valuation has increased from $14 billion in 2021 to $150 billion in a new convertible debt round discussed, attracting investors such as Thrive Capital and Apple.
SAFETY AI
The company’s unusual structure, which gives full control to its non-profit subsidiary OpenAI, was originally set to ensure its mission of creating “generally useful safe AGI,” referring to artificial general intelligence that is at or beyond human intelligence. .
That structure came into focus last November during one of Silicon Valley’s biggest boardroom dramas, where nonprofit board members slammed Altman over a breakdown in communication and a loss of trust. He returned after five days with the support of his employees and investors.
Since then, OpenAI’s board has been updated with other tech executives, led by Bret Taylor, the former co-CEO of Salesforce who now runs his own AI startup. Any corporate change requires approval from the nonprofit’s nine-person board.
Losing nonprofit control could make OpenAI look more like a typical startup, a move largely welcomed by investors who have poured billions into the company.
However, it may raise concerns from the AI ​​safety community about whether the lab still has enough governance to hold itself accountable in its pursuit of AGI, as it disbanded a superalignment team focused on AI’s long-term risks earlier this year. .
It’s unclear how much equity Altman will receive. Altman, who has become a billionaire from several startup investments, has said he chose not to take an equity stake in the company because the board needs a majority of non-interested directors who do not own a stake in the company. He also said that he had enough money and did it because he liked the work.
The new structure of OpenAI will be similar to that of its main rivals Anthropic and Elon Musk’s xAI, which is listed as a benefit company, a form of profit that aims to promote social responsibility and sustainability in addition to making a profit.
Published – September 26, 2024 09:18 IST
