OpenAI continues to undergo a major corporate restructuring as key people continue to leave the firm. According to a report by Reuters, OpenAI has now decided that a non-profit board will no longer govern it and that it will be transitioned to a fully for-profit company.
For starters, OpenAI used to operate under a non-profit model to build safe and beneficial artificial general intelligence (AGI) for the ultimate benefit of humanity. The company was founded in 2015 as a non-profit organization to ensure the mission of creating a "safe AGI that is broadly beneficial." The non-profit was governed by a board of directors, including Sam Altman, who did not hold equity in OpenAI.
The profit allocated to investors and employees was capped, with only a residual value returned to the non-profit for the benefit of humanity. OpenAI had initially planned to raise $1 billion in donations for the non-profit"s commitments; however, it only received around $130.5 million in total donations. Since the cost of computational power and talent required to push core research forward was much higher, OpenAI decided to create a for-profit wing that would be capable of issuing equity to raise capital and hire talent.
Key members who served OpenAI Non-profit"s board of directors include Bret Taylor (Chair, former co-CEO of Salesforce), Adam D"Angelo (CEO of Quora and an early member of the OpenAI team), Dr. Sue Desmond-Hellmann (former CEO of the Bill and Melinda Gates Foundation), U.S. Army General Paul M. Nakasone, Larry Summers (Former U.S. Treasury Secretary), Zico Kolte (professor at Carnegie Mellon University, specializing in machine learning), Nicole Seligman (Former EVP and General Counsel at Sony Corporation), and Fidji Simo (CEO of Instacart). Microsoft was also a non-voting observer on the company"s board.
This unusual structure of a non-profit controlling a for-profit was originally intended to align the company"s mission of creating safe AGI with investor incentives. However, it was also responsible for major internal conflicts, such as the brief ouster of Sam Altman last year.
It now looks like OpenAI needs even more money, as removing the non-profit control will attract more investments for OpenAI and reduce the limitations it once had because of the non-profit wing. Sam Altman will reportedly receive equity, which could be worth $150 billion, as he will also no longer be bound by the non-profit"s responsibilities and limitations.
An OpenAI spokesperson said to Reuters:
We remain focused on building AI that benefits everyone, and we’re working with our board to ensure that we’re best positioned to succeed in our mission. The non-profit is core to our mission and will continue to exist.
The non-profit wing will continue to exist and hold a limited stake in the company. The plan is still being developed with legal advisors and shareholders, and there"s no set timeline for the whole process to be completed.
Source: Reuters