OpenAI recently announced a high-profile for-profit restructuring plan, marking a shift to a new business model for the artificial intelligence company that has long been controlled by a nonprofit organization. The move is aimed at providing more funding for its research and development of general artificial intelligence (AGI) and meeting investors’ expectations for returns. However, the plan has also sparked controversy, raising questions from some about whether it would put profits ahead of the public interest.
Recently, OpenAI officially announced its much-anticipated profit-making restructuring plan. The plan marks a change in OpenAI's long-standing structure controlled by a nonprofit organization.
Under the new plan, OpenAI's for-profit subsidiary OpenAI Global, LLC will re-register as a Public Benefit Corporation in Delaware. At the same time, the existing non-profit holding entity OpenAI, Inc. will continue to hold a significant interest in the new for-profit company, the specific proportion will be determined based on the independent financial advisor's valuation.
The main goal of this reorganization is to advance the mission of general artificial intelligence, and OpenAI said that the funding required is far greater than expected. Investors also hope to obtain returns through traditional equity, so they need to simplify the equity structure and reduce complexity.
Under Delaware's General Corporation Law, public benefit corporations are formed to generate public benefits and to operate in a responsible and sustainable manner. The law requires boards of directors to balance the interests of shareholders, the interests of other third parties affected by the company's actions, and the public interest promised when the company was registered.
However, OpenAI’s restructuring plan has not been smooth sailing. Co-founder Elon Musk has filed a lawsuit to try to block the plan, accusing OpenAI of putting profits over the public interest. In addition, Meta Corporation has also put pressure on the California Attorney General, hoping to prevent OpenAI's transformation.
OpenAI’s restructuring plan is full of challenges. Its future direction and impact on the artificial intelligence industry remain to be seen. Whether this transformation can balance commercial interests and public interests will become the focus of the industry.