OpenAI is reportedly “pursuing” plans to abandon its nonprofit roots and restructure as a for-profit entity – a move that could insulate Sam Altman and his allies from a “hostile takeover” or opposition to their leadership.
The company's management plans to restructure as a public benefit corporation – an unusual structure in which its leaders would consider both social impact and profits when making decisions, the Financial Times reported. This structure is used by competitive companies such as Elon Musk's xAI and supported via Amazon Anthropic.
If the move is finalized, the nonprofit organization that has overseen OpenAI since its founding in 2015 will continue to exist but will no longer control the company's operations.
The restructuring would allow OpenAI to take a “multi-pronged approach to fiduciary obligations” and provide a “safe harbor” for any activist investors or attempts to challenge Altman, a person with knowledge of the talks told the FT.
Last fall, Altman was fired by the company's nonprofit board. Altman returned as CEO within days amid talks that resulted in nearly all of the previous board members resigning.
Last week, OpenAI raised as much as $6.6 billion in a fundraising round that valued the company at $157 billion. This is despite the fact that the company has rapidly burned through cash developing new artificial intelligence models.
Sources familiar with OpenAI's position told the website that no final decisions have been made yet and that the restructuring will likely take some time. Altman is not expected to run a nonprofit entity that would gain a stake in the for-profit OpenAI corporation.
“OpenAI wants to maintain this social license, with both mission and responsibility, while building cutting-edge technology,” a source told the FT.
The Post has reached out to OpenAI for comment.
Reports of OpenAI restructuring discussions emerged last month on the same day that Chief Technology Officer Mira Murati and two other senior executives resigned from their positions.
Their departure was the latest in a significant exodus of top OpenAI executives who have resigned or taken extended leave since the beginning of the year.
OpenAI said it is “focused on building AI that benefits everyone, and we are working with our management to ensure we are best positioned to succeed in our mission.”
“This not-for-profit organization is core to our mission and will continue to exist and thrive,” the company said in a statement when reports of a potential restructuring first emerged last month.
The fundraising round was led by Josh Kushner's Thrive Capital, and other participants included Microsoft, AI chip provider Nvidia, Khosla Ventures, SoftBank, Abu Dhabi state-backed fund MGX, Altimeter Capital and Fidelity.
The potential restructuring is said to be a sticking point for investors, who reportedly could renegotiate OpenAI's valuation or receive a full refund if the turnaround is not completed within two years, Reuters reported.
Altman – who has faced criticism for what critics have described as an aggressive and domineering leadership style – is expected to receive a stake in the restructured OpenAI, although the exact terms remain unclear.
During a staff meeting last month, Altman described reports that his rate could get closer to 7% – which would be valued at more than $10 billion – as “ridiculous.”
Elsewhere, some critics accused Altman of prioritizing rapid progress over safety when creating advanced artificial intelligence that could potentially pose a threat to humanity.
