ChatGate-maker OpenAI is working on plans to reorganize its core business into a for-profit corporation that will no longer be controlled by its nonprofit board, people familiar with the matter told Reuters, a move that would Which will make the company more attractive to investors.
The OpenAI non-profit will continue to exist and will own a minority stake in the for-profit company, the sources said. The move may also have implications for how the company manages AI risks in the new governance structure.
Chief Executive Sam Altman will also receive equity for the first time in the profitable company, which could be valued at $150 billion (roughly Rs. 12,55,438 crore) after the restructuring as it also seeks to remove caps on returns for investors. Sources added. The sources requested anonymity to discuss personal matters.
“We are focused on building AI that benefits everyone, and we are working with our board to ensure we are best positioned to succeed in our mission. Nonprofit The core of our mission is and will continue to exist.” An OpenAI spokesperson said.
Details of the proposed corporate structure, first reported by Reuters, highlight significant governance changes taking place behind the scenes at one of the most significant AI companies. The sources said the plan is still being shared with lawyers and shareholders and the timeline for completing the restructuring remains uncertain.
The restructuring also comes amid a series of leadership changes at the startup. OpenAI’s longtime chief technology officer Mira Muratti announced her sudden departure from the company on Wednesday. OpenAI President Greg Brockman is also on leave.
Founded as a non-profit AI research organization in 2015, OpenAI added the for-profit OpenAI LP entity as a subsidiary of its non-profit organization in 2019, securing capital from Microsoft to finance its research.
The company gained global attention in late 2022 with the launch of ChatGPT, a generative AI app that delivers human-like responses to text questions, which became one of the fastest growing applications in history with over 200 million weekly active users. Has become one. The global race to invest in AI.
With the success of ChatGPT, the new convertible debt round under discussion raises OpenAI’s valuation from $14 billion (roughly Rs. 1,17,174 crores) to $150 billion (roughly Rs. 12,55,438 crores) in 2021 from investors like Thrive Capital. Attracts. And apple.
AI security
The company’s unusual structure, which gives the OpenAI nonprofit full control of the for-profit subsidiary, was originally set out to ensure the mission of creating “safe AGI that is broadly beneficial” is based on artificial intelligence. Refers to intelligence that is at or above human intelligence. ,
The structure came into focus last November during one of Silicon Valley’s biggest boardroom dramas, where nonprofit board members ousted Altman over a breakdown in communication and loss of trust. He was reinstated after five days with overwhelming support from employees and investors.
Since then, OpenAI’s board has been refreshed with more technology executives, headed by Brett Taylor, a former co-CEO of Salesforce who now runs his own AI startup. Any corporate changes require approval from its nine-person nonprofit board.
Removing nonprofit control would allow OpenAI to operate like a normal startup, a move generally welcomed by its investors who have invested billions in the company.
However, it could also raise concerns in the AI safety community about whether the lab still has adequate governance in place to hold itself accountable in its pursuit of AGI, as it did earlier this year in a report focusing on the long-term risks of AI. The superlative team has been disbanded. ,
It’s unclear how much equity Altman will receive. Altman, already a billionaire from his many startup investments, has previously said he decided not to take an equity stake in the company because the board required a majority of disinterested directors with no stake in the company. He has also said that he has enough money and he is doing this because he likes this work.
OpenAI’s new structure will resemble that of its key rivals Anthropic and Elon Musk’s XAI, which are registered as benefit corporations, a form of business that aims to promote social responsibility and sustainability in addition to making profits.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
