OpenAI plans to transform its corporate structure into a public benefit corporation (PBC) by 2025. This change aims to allow for more capital raising and growth, particularly in pursuit of pursuing the mission.
The PBC will oversee commercial operations, while a nonprofit arm will be hired separately to pursue charitable initiatives in healthcare, education, and science. The company currently expects significant losses this year but anticipates increasing revenues rapidly.
OpenAI’s existing structure as a nonprofit, created in 2015, has limited its ability to raise capital with conventional terms compared to competitors. The new PBC structure will enable the company to create ordinary shares of stock, enabling it to attract more investors and fund its mission.
However, this change faces opposition from co-founder Elon Musk, who is currently involved in a heated legal battle with CEO Sam Altman that could impact the company’s future. Recent executive departures, including several high-profile researchers, have also raised concerns about the company’s priorities.
Source: https://www.cnbc.com/2024/12/27/openai-needs-more-capital-than-wed-imagined-moves-to-for-profit.html