OpenAI’s for-profit plan finally revealed

Since September, there have been rumors swirling that OpenAI was planning to transition from a non-profit to a for-profit corporation, mainly to keep investors happy and allow them to continue their journey towards achieving Artificial General Intelligence (AGI)—where AI can think as humans can.

Now, they’ve finally confirmed these rumors and shared their plans. They already have a for-profit division, which is currently governed by their non-profit parent company. This division will transition into a PBC (Public Benefit Corporation)---which is a corporate structure that’s designed to make the company think about the benefits to society as well as making money—and will “run and control OpenAI’s operations and business,” and the non-profit arm will sit under a separate leadership team and “pursue charitable initiatives in sectors such as health care, education, and science.”

The transition into a PBC will not only allow OpenAI to “raise the necessary capital” to build toward AGI, while also creating “one of the best-resourced non-profits in history”, it will also align them with their rivals, Anthropic and xAI (Elon Musk’s AI start-up, which are both PBCs).

The plans have faced criticism from industry experts, including a former OpenAI policy researcher, who is “seriously concerned” over the plan and its apparent lack of governance and guardrails, raising concerns that OpenAI’s for-profit division will not be held accountable

“Besides board details, what other guardrails are being put in place … to ensure that the non-profit’s existence doesn’t (seem to) let the PBC off too easy?”

Others in the AI industry—namely Musk, Meta, and now a non-profit charity—are also calling for the courts to stop OpenAI from transitioning into a for-profit, believing it will be detrimental to Silicon Valley and society in general, and is a contradiction to its founding mission.

‍