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OpenAI Transitions to For-Profit Company
Musk Accuses OpenAI of Abandoning Original Mission
Sam Altman Restructures Board
According to The Information’s report, co-founder and CEO Sam Altman indicated to shareholders this week that he is considering transitioning OpenAI from a limited-profit company model to an “unrestricted profit company” similar to its competitors (Anthropic, xAI). This transformation, if realized, would result in OpenAI’s non-profit board losing control over the company.
OpenAI’s current private valuation is around $860 billion. Its current company structure is described on the company’s website as a “collaboration between the original non-profit organization and a new limited-profit division.”
On its website, OpenAI states that the shift from the original “non-profit organization” to “limited-profit” was to incentivize research in the field of Artificial General Intelligence (AGI) while maintaining the company’s vision. As to why this change is necessary, according to OpenAI, the reason is that “donations” are insufficient to cover the expenses required for the company’s work, hence the need for a new cash flow to incentivize stakeholders.
However, the website still carries a warning that stakeholders should consider their investment as a donation.
According to Zombit’s previous report, Tesla CEO Musk previously accused OpenAI of betraying its non-profit intentions. Musk at the time accused OpenAI and its founder Sam Altman of betraying the agreement made at the organization’s inception to prioritize the development of technology based on human welfare over profit, and stated that OpenAI’s recent relationship with tech giant Microsoft has undermined the organization’s initial commitment to public open-source Artificial General Intelligence (AGI). Musk wrote in the lawsuit:
On the other hand, when discussing the idea of restructuring the company, Sam Altman has already reshuffled the board, including himself and many carefully selected stakeholders. These individuals include former CEO of the Bill & Melinda Gates Foundation Sue Desmond-Hellmann, former Sony vice president Nicole Seligman, and CEO and chair of Instacart Fidji Simo.
In addition, retired US Army General and former director of the National Security Agency Paul Nakasone has also been added to the board, a move that sparked strong opposition from former CIA officer Edward Snowden. Snowden warned the public on X to “never trust OpenAI or its products,” adding that “there is only one reason to appoint a senior NSA official to the board.”
