After months of speculation, OpenAI has finally revealed its plans to become a commercial company. OpenAI said Thursday in a blog post written by its board of directors that it plans to transition its for-profit arm to a public benefit corporation in 2025. A PBC or B Corp is a for-profit organization that seeks to balance the interests of its stakeholders. while making a positive impact on society.
“For 2025, we must become a durable company, not just a lab or a startup,” OpenAI said, noting that many of its competitors are registered as PBCs, including Anthropic. and Elon Musk’s own xAI. “(This move) will allow us to raise the necessary capital on traditional terms, in line with other companies in this space.”
As part of the transformation, OpenAI’s nonprofit arm will hold a stake in the for-profit arm in the form of stock “at a fair valuation determined by an independent financial advisor,” but will lose direct oversight of the company. It will be. “Our plan is to be one of the best-resourced nonprofits in history,” OpenAI claims.
After the reorganization, the for-profit division will be responsible for overseeing OpenAI’s “operations and business,” while the nonprofit division will operate independently with its own leadership team and focus on philanthropy in health care, education, and science. Become.
OpenAI did not say whether CEO Sam Altman would acquire stock as part of the restructuring. Last year, OpenAI’s board laid off Altman and then brought him back, a process that sparked an organizational crisis that led to this week’s announcement. According to some estimates, OpenAI’s commercial arm could be worth $150 billion. In 2019, OpenAI estimated it would need to raise at least $10 billion to build artificial general intelligence. The company secured $6 billion in new funding in October.
“The hundreds of billions of dollars that leading companies are currently investing in AI development shows what it really takes for OpenAI to continue pursuing its mission,” OpenAI said. “We once again need to raise more capital than we imagined. Investors want to support us, but with capital of this size there is a lack of traditional capital and less structural bespokeness. It’s not necessary.”
Despite this week’s announcement, OpenAI will likely face multiple obstacles in implementing its plans. In addition to its ongoing legal battle with Elon Musk, Meta recently sent a letter to California’s attorney general asking him to block OpenAI’s transformation into a for-profit company, calling the move ” “This is wrong” and “could lead to widespread fraud.” Similar start-up ventures that are conceptually philanthropic until potentially profitable. ”
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