Since 2019, OpenAI has operated under a hybrid model: a nonprofit organization controlling a so-called capped-profit LLC. This complex structure made it possible to attract investors while preserving a public interest mission. This commercial entity will ultimately become a Public Benefit Corporation (PBC), that is, a for-profit company committed to a public mission.
OpenAI bows to criticism
Very concretely, this means that the board of directors of the nonprofit entity—the same one that fired Sam Altman in November 2023 (he has since been reinstated)—retains control of OpenAI. The new PBC will count the non-profit organization as a significant shareholder.
The big change in this story is that the capped return mechanism is being abandoned: investors and employees will hold traditional shares, with no capital gain limit. Until now, investors in the commercial subsidiary could make up to 100 times their initial investment, which already sounds pretty juicy. Beyond that, all additional profits were to go to the non-profit entity that controls OpenAI.
But the madness in the AI sector is such that this glass ceiling has shattered. OpenAI considers it unsuitable in a context where several companies are developing highly advanced AI in parallel. Hence the move to a more traditional PBC-type structure with common shares.
This capitalist Meccano aims to more easily raise funds, possibly hundreds of billions, or even trillions of dollars, needed according to Sam Altman to deploy AGI (artificial general intelligence) on a large scale.
In a letter addressed to employees, the CEO reiterates that the company's mission remains unchanged: to ensure that artificial general intelligence (AGI) benefits all of humanity. "We want to publish very powerful models as open source," he writes. "We want to offer our users great freedom in how they use our tools, within broad limits, even if we don't always share the same moral framework, and allow them to decide for themselves how ChatGPT behaves."
OpenAI also plans for the non-profit side, now better funded thanks to its stake in the PBC, to support initiatives in areas such as health, education, scientific research, and public services. A dedicated commission will be responsible for making recommendations on this subject.
This is, without a doubt, a 180-degree turn for OpenAI. Sam Altman's long-standing desire for transformation was to make the creator of ChatGPT a 100% commercial company. This prompted legal action from Elon Musk, co-founder of OpenAI, who took a dim view of this conversion, which stepped on xAI's toes. The Tesla boss even made a grotesque offer to buy OpenAI.
He wasn't alone, however: Meta had joined the battle, along with civic, legal, and labor organizations that took the matter to the authorities. This pressure clearly weighed in the balance.
Source: OpenAI
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