What changes if OpenAI becomes a for-profit organization

Last Wednesday (25th), OpenAI's main technology executive, Mira Murati, revealed that she will leave the company, after almost seven years. The CTO is a key figure in the organization and served as temporary CEO in November last year, when the then CEO Sam Altman was fired by the board of directors.

Mira Murati wrote on Twitter (now X) that she is leaving because she wants to “create the time and space to do my own explorations.” She is the latest in a series of high-profile executives to leave the company, including co-founder John Schulman.

The announcement of Murati's departure came practically at the same time as news broke that the creator of ChatGPT is working on a plan to restructure its core business and transform into a for-profit company.

With this maneuver, OpenAI would no longer be controlled by its non-profit board (the one that fired Altman last year) and would become more attractive to investors. According to information released by the press, OpenAI's non-profit entity would continue to exist and would have a minority stake in the for-profit company.

To understand the impact of this decision, you must first understand OpenAI's governance model. It was founded in 2015 as a non-profit organization, with the mission to “build safe and beneficial artificial general intelligence (AGI) for all humanity.”

To raise more capital than would be possible through donations, the company created a holding company that allows it to raise investments for a for-profit subsidiary.

Earlier this year, OpenAI dismantled the team that focused on the long-term risks of AI.

Combining profit and purpose has enabled it to raise billions from investors seeking financial returns, balancing “commerciality with security and sustainability, rather than focusing on pure profit maximization,” as explained on its website.

In this model, profit is limited to approximately 100 times the initial amount invested. This structure requires OpenAI to revert to a non-profit organization once this point is reached. The model was designed to prevent the company from straying from its purpose and to avoid compromising its mission by seeking profit at any price.

A TYPICAL STARTUP

With OpenAI's change to a for-profit organization, Altman would receive equity for the first time in the company, which could be worth US$150 billion after the restructuring – as it also tries to remove the profit limit for investors -, according to sources heard. by the Reuters agency.

Details of the proposed corporate restructuring, first reported by Reuters, highlight significant governance changes taking place behind the scenes at one of the world's most important AI companies. The plan is still being discussed with lawyers and shareholders, and the timeline for completing the restructuring has not been defined.

An OpenAI spokesperson said the organization remains focused on building AI that benefits everyone. “We are working with the board to ensure we are in the best position to succeed in our mission. The non-profit entity is fundamental to our mission and will continue to exist,” he said.

Without the control of the non-profit entity, OpenAI would operate like a typical startup – a move generally welcomed by investors, who have already injected billions into the company.

But it also raises concerns from the AI ​​safety community about whether it would still have enough governance to hold itself accountable in the pursuit of General AI, given that earlier this year OpenAI dismantled the team that focused on AI's long-term risks.

OPEN SOURCE

Days before the news broke about possible changes to OpenAI's governance, Sam Altman announced, in a post on your personal blogthe arrival of an AI-induced “Age of Intelligence.”

According to him, we are on the cusp of this new era of prosperity because “deep learning worked.” And OpenAI has proven that by training large language models with more and more computing power, you get predictably smarter AI.

Indeed, AI can accelerate human progress for the greater good. But it seems more likely that it simply concentrates unprecedented intelligence in the hands of a few – those who have the resources and capabilities to apply it.

Many people in the open source community believe that AI models can be better, safer, and fairer when their raw materials – the models, parameters, code, training data, etc. – are in the hands of several people, and not concentrated in a handful of megacorporations.

Many AI models that will be in production in the coming decades will be open source, but many of the largest, most modern, and best-performing ones today are closed.

Altman, as founder of OpenAI, was the driving force behind tightly controlling access to models and the company's focus on monetizing them. Their approach is not aligned with the organization's original purpose of promoting access to artificial intelligence for everyone.

An OpenAI spokesperson said the organization remains focused on building AI that benefits everyone.

“I firmly believe that closed source will do more harm than good in the long run,” Hugging Face engineer Vaibhav Srivastav posted on X. “Concentration of intelligence is not the way forward!”

The benefits of the Age of Intelligence will likely trickle down slowly from large, wealthy corporations to the rest of us. Big technology companies that develop and sell AI, infrastructure companies (like Nvidia), and large corporations of all types will benefit. For others, the benefits – if any – will only come much later.

With information from Mark Sullivan and Jessica Bursztynsky of Fast Companyand Krystal Hu and Kenrick Cai of Reuters.

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