ChatGPT developer OpenAI is making a radical structural change

Details of the new model were announced

According to OpenAI’s statement, a new public interest company structure of the company will manage its operations and commercial activities. Against this, current nonprofit organization, health, education and science It will employ a leadership team and workforce for philanthropic initiatives in sectors such as.

Founded in 2015 as a completely research-focused non-profit organization, OpenAI needs a more flexible investment model, especially due to the high costs of the Artificial General Intelligence (AGI) development process. The company’s latest $6.6 billion funding round, which valued it at $157 billion, hinged on whether the ChatGPT maker could change its corporate structure and lift the profit cap for investors.

OpenAI, supported by Microsoft, said in its blog post:Once again We need to raise more capital than we imagined. “Investors want to support us, but they need traditional equity and less structured equity at that scale of capital.” he says. OpenAI this year $3.7 billion in revenue and $5 billion in losses statement is expected.

How will the structure function?

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OpenAI, which currently operates as a non-profit organization, will transition to the Public Benefit Company model and continue its commercial operations under this new structure. of the company non-profit wingı is based on a fair valuation determined by independent financial advisors. will become a partner of PBC and will focus on philanthropic projects in areas such as health, education and science.

The board noted that the current structure makes it difficult to directly consider investors’ interests and expand the scope of charitable initiatives. The new model will enable the company to continue supporting its philanthropic activities while pursuing its business objectives.

This move by OpenAI is similar to a strategy used by other competitors in the industry. Organizations like Anthropic and Elon Musk-owned xAI have managed to attract large-scale investments with similar structure changes.

Source

https://www.reuters.com/technology/artificial-intelligence/openai-lays-out-plan-shift-new-for-profit-structure-2024-12-27/


https://openai.com/index/why-our-structure-must-evolve-to-advance-our-mission/













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