ChatGPT maker OpenAI on Monday announced plans to dial back part of its restructuring plan, retaining the overall control of organization to the non-profit arm. The rollback by OpenAI happens after a mirage of criticism over its plans from former company employees, experts in the field and even a lawsuit by 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 is remaining the same, though. OpenAI still plans to spin off its for-profit arm into a Public Benefit Corportation (PBC) but with the non-profit arm unit remaining in control and being a big shareholder in the new venture.
Public benefit corporations were first created in Delaware in 2013 and other US states have since then adopted a similar structure where the company can puruse profit but with a social good in mind. Altman says it is a similar strucutre employed by other AI companies including Anthropic and even Musk’s xAI.
Converting the for-profit arm into a PBC is expected to help make OpenAI more attractive to investors. In fact, Altman says that despite the non-profit retaining control of the overall organization, SoftBank has decided to move forward with its full $30 billion in investment, as per a Bloomberg report.
Microsoft not happy with restructuring change:
Microsoft – OpenAI’s current largest investor – is yet to give the AI startup its accent to restructuring plan, according to Bloomberg. Reportedly, the tech giant wants to make sure that OpenAI’s new structure will protect its investment.
The Satya Nadella led company is said to have a directly say in approving the new restructuring plan along with early investors. Microsoft also has a unique relationship with OpenAI because of its licensing and revenue sharing deal 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.
