OpenAI, the AI giant famous for ChatGPT, is planning to transform its corporate structure from a non-profit organization to a for-profit company. The move sparked widespread concern, spotlighting its complex valuation process and questions about the company's original intentions. The editor of Downcodes will give you an in-depth understanding of OpenAI’s transformation plan, as well as the various controversies and discussions surrounding this incident.
OpenAI is reportedly in preliminary talks with regulators in California and Delaware about changing its corporate structure to a for-profit one. The company, best known as ChatGPT, is currently valued at $157 billion. According to Bloomberg, OpenAI has contacted California Attorney General Rob Bonta and relevant officials in Delaware.
As early as September 2023, Reuters reported that OpenAI was developing a plan to reorganize its core business into a for-profit company and no longer be controlled by its non-profit board of directors. However, a major challenge discussed was how to value OpenAI's intellectual property, its most important asset being its highly profitable language model chatbot. Under California law, valuations of nonprofit assets are required to be allocated to charities, making the entire process potentially complex and time-consuming.
Nonetheless, a simplified profit-making structure is clearly more attractive to investors. The transformation also raises questions about whether OpenAI is still following its original intention when it was founded in 2015: to develop artificial intelligence products that are safe and beneficial to humans. In May 2023, technology giant Elon Musk questioned the legality of OpenAI’s for-profit transformation, saying that “OpenAI was originally established as an open source non-profit company to compete with Google, but now it has become A closed, profit-maximizing company is actually controlled by Microsoft.”
Musk sued OpenAI and CEO Sam Altman in February 2024, alleging breach of contract, but withdrew the lawsuit in June. Brett Taylor, chairman of OpenAI's nonprofit board of directors, said in an interview with Bloomberg that any potential reorganization would ensure the nonprofit's continued existence and growth, capture the full value of its current stake in OpenAI's for-profit company, and enhance its pursuits. mission capabilities.
Additionally, the company created a limited-profit subsidiary back in 2019 to help fund the high cost of AI model development. However, in the brief turmoil that followed, including the brief firing and rehiring of CEO Sam Altman, tensions on the nonprofit board grew. On October 23, Miles Brundage, a senior security researcher at OpenAI, announced his resignation and expressed plans to establish a new non-profit organization or join an existing organization to focus on AI policy research and advocacy.
According to earlier forecasts, OpenAI is expected to face losses of approximately $5 billion in 2024 and is unlikely to become profitable before 2029.
OpenAI's transformation journey is full of challenges, and its future direction remains to be seen. This transformation is not only related to OpenAI's own business model, but also affects the development direction of the artificial intelligence industry and the public's trust in artificial intelligence technology. The editor of Downcodes will continue to pay attention to the progress of the incident and bring the latest reports to readers.