OpenAI, the renowned artificial intelligence company, is reportedly considering transitioning from its current capped-profit structure to a full for-profit model. This significant change, first reported by The Information, was allegedly discussed by CEO and co-founder Sam Altman with shareholders during the week of June 10. If implemented, this shift could result in the nonprofit board losing its control over the company.
Current Valuation and Structure
With a private valuation of approximately $86 billion, OpenAI is currently structured as a partnership between its original nonprofit organization and a new capped-profit arm. This dual structure was designed to balance the pursuit of artificial general intelligence (AGI) with the company’s foundational vision. According to OpenAI, the capped-profit model was introduced to attract necessary investments, as relying solely on donations proved insufficient to fund their ambitious research and development goals. Despite this shift, the company’s website still advises stakeholders to view their investments as high-risk and akin to donations, given the uncertainties surrounding the role of money in a post-AGI world.
Board Restructuring and New Appointments
In conjunction with the potential transition to a for-profit model, Altman has been restructuring the board of directors. The new board includes prominent figures such as former CEO of the Bill and Melinda Gates Foundation Sue Desmond-Hellmann, former Sony VP Nicole Seligman, and Fidji Simo, CEO and chair of Instacart. Additionally, retired U.S. Army General and former director of the National Security Agency Paul Nakasone has joined the board. Nakasone’s appointment has sparked controversy, particularly from former U.S. intelligence contractor Edward Snowden. Snowden voiced strong criticism on social media, warning the public against trusting OpenAI and its products, specifically citing ChatGPT, and implying that Nakasone’s presence on the board represents a betrayal of global privacy rights.
Future Governance and Mission Commitment
Amidst these developments, OpenAI continues to navigate its future governance structure. One possible outcome is the adoption of a “for-profit benefit corporation” model, similar to those used by competitors like Anthropic and xAI. This model would enable OpenAI to pursue profit while maintaining a commitment to broader societal benefits. However, discussions are ongoing and no final decision has been made. OpenAI, in response to inquiries, reaffirmed its dedication to developing AI that benefits everyone and emphasized that the nonprofit aspect remains central to its mission and will continue to exist.