January 30, 2025

OpenAI weighs changes to corporate structure: Exploring a non-profit backed by ‘for-profit’s success’ to sustain AGI’s mission-driven future

Nickie Louise Posted On December 27, 2024

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Just weeks after reports that OpenAI was seeking to remove the “AGI clause” in its agreement with Microsoft and shift to a full-profit model, the make of ChatGPT is now rethinking its corporate setup. OpenAI’s Board of Directors is exploring a structure that could balance its non-profit mission with the financial realities of advancing artificial general intelligence (AGI).

In a post on X this morning, OpenAI announced that its “Board of Directors is evaluating our corporate structure with the goal of creating a stronger non-profit, supported by the success of the for-profit.”

OpenAI’s Board of Directors is evaluating our corporate structure with the goal of making a stronger non-profit supported by the for-profit’s success.

Our plan would create one of the best-resourced non-profits in history. https://t.co/6GvnMyCQmR

— OpenAI (@OpenAI) December 27, 2024

In a blog post, OpenAI said the company’s Board of Directors is reassessing its corporate structure to ensure it remains aligned with its mission to make artificial general intelligence (AGI) beneficial for all of humanity. The evaluation focuses on three key objectives:

Determining a structure—whether non-profit, for-profit, or a combination—that best supports the mission over the long term.
Creating a sustainable model for the non-profit to continue its work effectively.
Defining clear roles for both non-profit and for-profit entities to maximize their contributions.

Currently, OpenAI operates as both a non-profit and a for-profit. This dual model will remain, with the success of the for-profit arm providing critical funding to strengthen and sustain the non-profit’s mission-driven initiatives.

A Mission at the Crossroads

OpenAI started in 2015 as a research-focused non-profit, driven by the vision of AGI benefiting humanity. The organization initially relied on donations, including funding from major tech companies like Google and Microsoft. But as the needs for computing power and talent grew, the non-profit alone wasn’t enough to sustain progress.

By 2019, OpenAI introduced a for-profit entity to attract investors and secure billions in capital. This move was critical in funding innovations, including the development of ChatGPT, which has since become a widely used product. While this structure enabled growth, it’s clear that even more resources are needed to keep pace with the AGI economy.

The New Corporate Structure Under Consideration

The company is now considering restructuring its for-profit entity as a Delaware Public Benefit Corporation (PBC). This approach would allow OpenAI to raise conventional equity while ensuring its mission remains a priority. The PBC model requires companies to balance financial returns with public good, which aligns with OpenAI’s overarching goals.

At the same time, the non-profit would hold shares in the PBC, significantly boosting its resources. This move could also allow the non-profit arm to expand its work in areas like education, healthcare, and science, further amplifying the impact of AGI on society.

Looking Ahead

OpenAI’s leadership sees this restructuring as essential to securing the capital needed for AGI development. The proposed changes would better define the roles of its non-profit and for-profit branches, allowing each to focus on what they do best: advancing technology and delivering tangible benefits to people.

The decision reflects OpenAI’s ongoing commitment to its mission. By evolving its corporate structure, the company aims to stay competitive while ensuring AGI development continues to serve humanity at large.