OpenAI’s nonprofit to remain in charge
Late last year, ChatGPT maker OpenAI announced it was restructuring its company to go from a for-profit controlled by a nonprofit “with a capped profit share for investors and employees” to a public benefit corporation that would run the show.
Today, OpenAI announced the nonprofit would remain in charge. The for-profit LLC under the nonprofit will still become a public benefit corporation.
CEO Sam Altman wrote in a letter to employees:
“We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware.... Instead of our current complex capped-profit structure — which made sense when it looked like there might be one dominant AGI effort but doesn’t in a world of many great AGI companies — we are moving to a normal capital structure where everyone has stock.”
In March, Microsoft-backed OpenAI secured the largest private funding round ever, a $40 billion round led by SoftBank: $30 billion from SoftBank and $10 billion from Microsoft and others. Previous reporting from both Bloomberg and Reuters stated that to raise the full amount, OpenAI would have to complete its transition to a public benefit corporation by the end of the year. Otherwise, SoftBank would only be on the hook for $20 billion.
CEO Sam Altman wrote in a letter to employees:
“We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware.... Instead of our current complex capped-profit structure — which made sense when it looked like there might be one dominant AGI effort but doesn’t in a world of many great AGI companies — we are moving to a normal capital structure where everyone has stock.”
In March, Microsoft-backed OpenAI secured the largest private funding round ever, a $40 billion round led by SoftBank: $30 billion from SoftBank and $10 billion from Microsoft and others. Previous reporting from both Bloomberg and Reuters stated that to raise the full amount, OpenAI would have to complete its transition to a public benefit corporation by the end of the year. Otherwise, SoftBank would only be on the hook for $20 billion.
