OpenAI To Restructure As For-profit Benefit Corporation, Targets $150 Bn Valuation
The new structure will increase OpenAI's appeal to investors while keeping a minority interest in its non-profit arm
OpenAI is proposing a major reform of its corporate structure, transitioning from a non-profit to a for-profit benefit corporation, according to Reuters. This approach is expected to attract more investors, potentially raising OpenAI's worth to USD 150 billion.
OpenAI plans to change its governance, transitioning from a non-profit to a for-profit benefit corporation. The new structure will increase OpenAI's appeal to investors while keeping a minority interest in its non-profit arm. The restructuring reflects how the company, which was created as a non-profit research institution in 2015, would function and govern itself in the quickly growing AI market.
As part of the restructuring, OpenAI CEO Sam Altman is set to gain shares in the for-profit firm for the first time. Altman has previously declined to hold shares, preferring impartial board governance. However, given the company's new trajectory, his choice to accept shares marks a watershed moment in his leadership role. Following the restructuring, which includes raising the ceiling on investor returns, OpenAI's valuation might exceed USD 150 billion, which is expected to pique investor interest even more.
OpenAI was founded with the goal of enhancing artificial general intelligence (AGI) in a safe and helpful manner. It first grabbed global headlines in 2022 with the release of ChatGPT. The generative AI tool currently has more than 200 million weekly users. The company's valuation has risen from USD 14 billion in 2021 to a predicted USD 150 billion due to increased interest in artificial intelligence.
While investors have welcomed the transition to a for-profit structure, there are concerns in the AI community about the potential impact on OpenAI's safety aims. Earlier this year, the business dismantled its superalignment team, which was in charge of managing long-term risks connected with AI. The company's emphasis on profitability may indicate changes in how it addresses AI safety and governance, however these concerns are still theoretical as specifics of the restructure are being finalised.
