OpenAI said on Monday that it was restructuring as a public benefit corporation, allowing the nonprofit that controls OpenAI to retain its grip on the company.
The nonprofit will be OpenAI’s largest shareholder.
Sam Altman, OpenAI chief executive, created the artificial intelligence organization with several other Silicon Valley figures, including Elon Musk, as a nonprofit in late 2015. In 2018, after Mr. Musk left in a power struggle, Mr. Altman attached OpenAI to a for-profit company so he could raise the billions of dollars needed to build A.I. technologies.
But the nonprofit retained its grip in what become an unorthodox structure that some saw as an albatross to the company’s growth. Last year, Mr. Altman and his company began working on a plan to shift control from the nonprofit to OpenAI’s investors, so that it would be more attractive to investors.
The company, however, backtracked from that plan and the nonprofit will now maintain control. The decision is a victory for OpenAI’s critics, including Mr. Musk, who said the company was too focused on profits and had abandoned its early plan to build A.I. systems with safety foremost in mind.
A public benefit corporation is often described as an organization designed to create public and social good and allows outsiders to invest in much the same way they invest in other companies.
“I am very happy we made the decision for the nonprofit to maintain control,” Mr. Altman said during an press briefing. He added that the new change “sets us up to have a more understandable structure to do the things that a company like our has to do.”
OpenAI said that it is still negotiating the nonprofit’s stake in the new corporation and that the nonprofit would pick the board members of the new corporation.
The Japanese conglomerate SoftBank recently led a $40 billion funding round in OpenAI that values the company at $300 billion. If this shift is not completed by the end of the year, SoftBank will have the option to reduce its total contribution to $20 billion, said a person familiar with the latest investment deal.
This is a developing story. Check back for updates.
Content Source: www.nytimes.com