OpenAI said it would require “more capital than we imagined” when Sam Altman's artificial intelligence pioneer outlined plans to restructure into a for-profit company.
Under the proposed structure, the ChatGPT maker's existing for-profit arm would become a Delaware Public Benefit Corporation (PBC) organized to consider societal interests in addition to shareholder value.
As the expensive pursuit of artificial general intelligence, or AI that exceeds human intelligence, intensifies, OpenAI has been exploring changes to attract more investment.
“We once again need to raise more capital than we imagined. Investors want to support us, but capital of this size requires traditional capital and less structural bespokeness. ,” the Microsoft-backed startup said Friday.
“The hundreds of billions of dollars that leading companies are currently investing in AI development shows what it really takes for OpenAI to continue pursuing its mission.”
Latest $6.6 billion funding round According to Reuters, the $157 billion valuation hinges on whether the company can shake up its corporate structure and remove profit caps for investors.
The company announced that PBC will oversee its commercial operations and hire additional staff for its nonprofit branch that will “pursue philanthropic activities” in the fields of health care, education and science.
OpenAI said PBC will hold “common stock” and the nonprofit will have a “significant interest” at a “fair valuation determined by an independent financial advisor.”
The switch to PBC would put the company in partnership with rival companies such as Anthropic Inc. and Elon Musk-owned xAI, which have similar structures and have recently raised billions of dollars in funding.
what humans have collected Another $4 billion investment It raised funding from existing investor Amazon last month, while xAI raised about $6 billion in equity financing in early December.
“The key to this announcement is that the commercial side of OpenAI will 'operate and manage OpenAI's operations and business,'” said Gil Luria, an analyst at DA Davidson & Co.
“This is an important step the company needs to take in order to continue raising capital,” Luria said, but added that the move “does not require OpenAI to go public.”
However, the startup may face some hurdles in its plans.
Musk, who co-founded OpenAI and later left the company and is now one of the startup's most vocal critics, has tried to block the plan, suing OpenAI and Altman in August.
The Tesla and SpaceX founder, who is now a key adviser to President-elect Donald Trump, called the transformation into a for-profit company “a textbook tale of altruism and greed.”
OpenAI earlier this month asked a federal judge to deny Musk's request, saying Musk initially supported OpenAI's status as a for-profit company, then withdrew from the company after failing to obtain a majority stake and full control. He released a large number of messages with Mr. Musk in which he claimed to have done the same thing.
Meta Platforms is also asking the California attorney general to block OpenAI's plans to turn it into a for-profit company, the Wall Street Journal reported earlier this month.
OpenAI is also dealing with internal turmoil following an exodus of top talent.
In May, OpenAI co-founder Ilya Sutskever and former safety leader Jan Leike left the company, citing disagreements over the company's direction.
Reich, who joined rival Anthropic, wrote that OpenAI's safety procedures “have taken a backseat to the shiny product.”
Another employee who worked for Reich accused OpenAI of acting like a for-profit company and quickly quit.
“In recent years, safety culture and processes have taken a backseat to shiny products,” he says. I wrote In the post of X.
Co-founder John Schulman also left OpenAI to join Anthropic.
In late September, OpenAI Chief Technology Officer Mira Murati announced that she would be leaving the company after six and a half years. Two research executives announced their retirement on the same day.
Altman previously said his resignation was unrelated to any potential restructuring.
with post wire
