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Key Takeaways
- OpenAI, the ChatGPT maker, announced Monday that they will remain under the control and management of their nonprofit board.
- "OpenAI was founded as a nonprofit, is today a nonprofit that oversees and controls the for-profit, and going forward will remain a nonprofit that oversees and controls the for-profit," it said. "That will not change."
- OpenAI said that it made its decision after consulting with attorneys general in Delaware and California who would have to approve the for profit transformation.
OpenAI, the ChatGPT maker, announced Monday that its nonprofit board will continue to control the company.
OpenAI said that rather than moving to a profit-oriented structure as planned the Limited Liability Corporation (LLC), which makes ChatGPT, and its other AI products, will instead move to a Public benefit corporation (PBC), controlled by its board.
"OpenAI was founded as a nonprofit, is today a nonprofit that oversees and controls the for-profit, and going forward will remain a nonprofit that oversees and controls the for-profit," it said. "That will not change."
The PBC must act in the best interests of its shareholders as well as its stated mission. Previously, the nonprofit structure prevented OpenAI’s investors such Microsoft (MSFT), from having an official say on matters like the CEO Sam Altman being ousted briefly 2023 from his position at the head of the company. OpenAI announced Monday that it will become a “big investor” in the PBC.
OpenAI announced that it had made its decision following consultation with the attorneys general from Delaware and California. They would have been required to approve the transformation into a for-profit company.
The Wall Street Journal reported that Altman claimed the changes proposed on Monday would still allow the company to access a $30 Billion investment from SoftBank. This investment was contingent upon the restructuring’s success.
Elon Musk (TSLA), CEO of Tesla, who founded OpenAI, criticized the move to a profit-driven model, calling it a betrayal from the original mission. He sued to stop this transformation.
