Non-Profit Entity to Keep Control over OpenAI

OpenAI decided its non-profit division would keep control over its for-profit organization. The decision comes after the company previously announced plans to convert to a for-profit scheme.

The ChatGPT maker faced fierce criticism from the likes of investor and co-founder Elon Musk and others over its plan to convert. OpenAI chairman Bret Taylor explained the company’s business wing, which had been under the non-profit since 2019, will transition to a public benefit corporation (PBC). The non-profit will control and be a large shareholder of the PBC, giving the non-profit better resources to support many benefits.

Taylor stated that the company decided that the non-profit should retain control after hearing from civic leaders and having discussions with the offices of the attorneys general of California and Delaware. “We thank both offices, and we look forward to continuing these important conversations to make sure OpenAI can continue to effectively pursue its mission. We look forward to advancing the details of this plan in continued conversation with them, Microsoft, and our newly appointed non-profit commissioners,” added Taylor.

The company is backed by Microsoft, with SoftBank Group reportedly in discussions to invest up to $25 billion. In a letter to employees, CEO Sam Altman explained that the company may eventually require trillions of dollars to fulfill its goal of making its services broadly available to all of humanity. OpenAI commissioned outside financial advisers to discuss a recapitalization plan.