OpenAI, an artificial intelligence research company, has made headlines with its announcement to switch to a non-profit structure, securing over $6.6 billion in funding as it moves from a capped-profit setup to a for-profit public benefit corporation.
A public benefit corporation is a corporate structure where a company balances shareholder profit, stakeholder interests, and public benefit interests in decision-making.
Founded in 2015, OpenAI began as a non-profit research lab with the purpose of enhancing digital intelligence in ways that will benefit humanity as a whole. Over the years, the company has made tremendous advances in AI research, including pioneering technologies like GPT-3 and DALL-E.
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However, the growing demand for computational resources and the need for significant finance prompted OpenAI to adopt a capped-profit model in 2019.
OpenAI mentioned that they have established a unique structure: a for-profit, controlled by the non-profit, with a capped profit share for investors and employees. The company aims to make significant profits (opens in a new window) to repay shareholders, who fund its mission, while the remainder will go to the non-profit. The mission is to ensure that artificial general intelligence benefits all of humanity by building safe AGI and sharing its benefits.
The strategic decision aims to align with the organization’s mission of ensuring AI benefits humanity, balancing advanced AI capabilities with ethical considerations and the public good, as part of a broader effort.
”Our stated goal was “advancing digital intelligence in the way most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.” A non-profit structure seemed fitting, and we raised donations in various forms, including cash ($137M, less than a third of which was from Elon) and compute credits and discounts ($1.8M from Amazon and $50M or more from each of Azure and Google Cloud).” The company blog post stated.
This move, however, is expected to strengthen OpenAI’s position as a leader in responsible AI development as well as foster greater collaboration with academic institutions, governments, and non-profit organizations.
”As we enter 2025, we will have to become more than a lab and a startup—we have to become an enduring company.”
