Copyright The Boston Globe
SAN FRANCISCO — OpenAI said Tuesday that it had adopted a new for-profit structure, a long-sought change that could allow the business to operate like a more traditional company while it raises the billions of dollars it needs to develop artificial intelligence. The widely anticipated move was considered one of the keys to the future of OpenAI. It will allow the maker of the popular ChatGPT chatbot to eventually go public on the stock market and raise new funds like any other company. It also firmly establishes OpenAI as one of the tech industry’s standard-bearers in the AI boom, allowing the San Francisco company to compete on more solid footing with giants like Google, Amazon and Meta. For more than 18 months, Sam Altman, the CEO of OpenAI, and his colleagues have been trying to rework OpenAI’s unorthodox structure, which blends a nonprofit with a for-profit company. The announcement Tuesday offers some clarity about how the influential AI company, which was founded 10 years ago, will operate. OpenAI said in a blog post that it had become a public benefit corporation, or PBC, which is a for-profit corporation designed to create public and social good. OpenAI rivals like Anthropic and xAI, which is owned by Elon Musk, use a similar structure. Advertisement The nonprofit that has controlled OpenAI since it was founded in late 2015 received a roughly $130 billion stake in the new for-profit company, which is called OpenAI Group PBC. OpenAI said the nonprofit, now called the OpenAI Foundation, would continue to control the for-profit company through its board. Microsoft, OpenAI’s largest investor, will also maintain a stake in the new company worth roughly $130 billion. The nonprofit holds a 26 percent stake in the new company, Microsoft controls a roughly 27 percent stake and the remaining 47 percent is held by current and former employees and other investors. OpenAI said it had completed the restructuring after negotiations with the attorneys general in Delaware, where it was founded, and California, where it is headquartered. In March, Japanese conglomerate SoftBank and other investors agreed to invest $40 billion in OpenAI. If OpenAI had not adopted its new corporate structure by the end of the year, SoftBank had the right to cut its total contribution from $30 billion to $20 billion. Advertisement Now that OpenAI has restructured, SoftBank has agreed to make its full investment, according to a person familiar with the arrangement who spoke on the condition of anonymity because they were not authorized to speak about the deal. In order to complete the restructuring, OpenAI also renegotiated its long-standing commercial agreement with Microsoft. The previous contract between the two companies gave Microsoft unfettered and exclusive access to all OpenAI technology to sell to customers and use in its own products until 2030. The contract cut off Microsoft’s access to OpenAI’s most powerful technology if OpenAI’s board declared it had reached artificial general intelligence, or AGI, which is, roughly speaking, a machine that can do anything the human brain can do. Microsoft and OpenAI have now extended that agreement to 2032. The new contract provides Microsoft with access to technologies after OpenAI has reached AGI, provided that the technology is equipped with “appropriate safety guardrails.” Under the new contract, an independent panel will judge whether OpenAI has achieved AGI. (The New York Times has sued OpenAI and Microsoft, claiming copyright infringement of news content related to AI systems. The two companies have denied the suit’s claims.) This article originally appeared in The New York Times.
