Key Takeaways
- OpenAI is shifting its governance to become a “public benefit corporation” while remaining under its non-profit board’s control.
- This change follows internal power struggles and aims to simplify fundraising while upholding its mission.
- CEO Sam Altman says the move will allow a more standard capital structure for growth.
- Critics and former insiders have raised questions about how the new structure will ensure OpenAI prioritizes public benefit.
OpenAI, the organization behind the popular AI service ChatGPT, has announced a new plan for how it will be managed. This decision comes after a widely publicized internal power struggle.
CEO Sam Altman stated that OpenAI will continue to be overseen by its non-profit board. Alongside this, the company will transition into what is known in the United States as a public benefit corporation.
A similar plan was mentioned by Mr. Altman back in December, but it lacked clarity on the extent of the non-profit’s control. This recent update follows significant scrutiny the startup has faced.
Originally a non-profit, OpenAI has drawn criticism, including from co-founder Elon Musk, that its pursuit of growth risks diverting it from its founding mission of developing technology for humanity’s benefit.
Just last month, a collective of former OpenAI employees and external experts, including AI pioneer Geoffrey Hinton, petitioned regulators in California and Delaware to intervene and block such a conversion, according to BBC News.
OpenAI Chairman Bret Taylor indicated the company made this decision “after hearing from civic leaders and engaging in constructive dialogue with the offices of the Attorney General of Delaware and the Attorney General of California.”
In his Monday update, Mr. Altman confirmed the non-profit will maintain control. It is also slated to receive a “big,” yet-to-be-determined, share in OpenAI’s commercial arm. This stake would provide funds for the non-profit’s own objectives.
He explained that the new structure would free the organization from its current complex governance, which had capped its profits. This cap was reportedly a concern for investors, like Microsoft, and hindered fundraising efforts.
“We are moving to a normal capital structure where everyone has stock,” Mr. Altman wrote in a letter to staff, later shared on the OpenAI website. “This is not a sale, but a change of structure to something simpler.”
Unlike traditional for-profit companies, which are primarily obligated to shareholders, a public benefit corporation also has a responsibility to a specific public mission. Mr. Altman believes that growth and expanding AI access, which requires substantial funding, aligns with the company’s mission.
He feels this will help people “build incredible things for each other and continue to drive society and quality of life forward.” He acknowledged potential misuse, writing, “It will of course not be all used for good, but we trust humanity and think the good will outweigh the bad by orders of magnitude.”
It’s not yet clear whether this new arrangement will satisfy investors or appease critics. Page Hedley, OpenAI’s former policy and ethics adviser who was part of the group that sent last month’s letter, commented that the update doesn’t resolve fundamental issues. These include questions about who will own the firm’s technology and how its various goals will be prioritized.
“We’re glad that OpenAI is listening to concerns from civil society leaders … but crucial questions remain,” Mr. Hedley remarked.
