ChatGPT maker OpenAI on Monday announced plans to roll back part of its restructuring plan, leaving overall control of the organisation in the hands of its non-profit arm. OpenAI’s rollback comes after a flurry of criticism over its plans from former employees, experts in the field and even a lawsuit from Elon Musk.
In a letter to employees and other stakeholders, OpenAI CEO Sam Altman said, “OpenAI was founded as a nonprofit, is today a nonprofit that oversees and controls the for-profit, and going forward will remain a nonprofit that oversees and controls the for-profit. That will not change.”
Not everything will stay the same. OpenAI still plans to spin off its for-profit arm into a public benefit corporation (PBC), but the non-profit arm will remain in control and be a major shareholder in the new company.
Public benefit corporations were first created in Delaware in 2013, and other US states have since adopted a similar structure where the company can make a profit but with a social good in mind. Altman says it’s a similar structure used by other AI companies, including Anthropic and even Musk’s xAI.
Transforming the for-profit arm into a PBC is expected to help make OpenAI more attractive to investors. In fact, Altman said that SoftBank has decided to move forward with its full $30 billion investment despite the fact that the nonprofit will retain control of the overall organization, according to a Bloomberg report.
Microsoft not happy with restructuring change:
Microsoft – OpenAI’s current largest investor – is yet to give its consent to the AI startup’s restructuring plan, according to Bloomberg. The tech giant reportedly wants to ensure that OpenAI’s new structure protects its investment.
The Satya Nadella-led company is said to have a direct say in approving the new restructuring plan, along with early investors. Microsoft also has a unique relationship with OpenAI through its licensing and revenue-sharing agreement with the company.
“We look forward to advancing the details of this plan in continued conversation with them, Microsoft, and our newly appointed nonprofit commissioners.” Altman said in his blogpost.
