What you need to know

  • OpenAI CEO Sam Altman is reportedly considering turning OpenAI into a regular for-profit corporation.
  • OpenAI and Sam Altman were recently placed under fire by billionaire Elon Musk after he filed a lawsuit for a stark betrayal of the startup’s founding mission.
  • Elon Musk dropped the suit without prejudice.

OpenAI could potentially undergo a major restructure. In 2019, the ChatGPT maker shifted from a nonprofit to a ‘capped-profit’ company to attract capital.

Recent reports suggest that the company might further restructure. According to The Information, OpenAI CEO Sam Altman has informed key stakeholders about the potential transformation into a for-profit corporation.

During the transition to a capped-profit company, OpenAI stated:

“We want to increase our ability to raise capital while still serving our mission, and no pre-existing legal structure we know of strikes the right balance. Our solution is to create OpenAI LP as a hybrid of a for-profit and nonprofit—which we are calling a ‘capped-profit’ company.”

Musk backs off as OpenAI goes hard on its for-profit arm

(Image credit: Tesla)

OpenAI’s founding mission has always been to “ensure that artificial general intelligence benefits all of humanity.” However, concerns have been raised about the company veering off this mission. Elon Musk, a co-founder of the startup, has been outspoken about these changes.

Musk initiated a lawsuit against Sam Altman and OpenAI for allegedly betraying the company’s founding mission. He also pointed out that OpenAI seemed to have become a closed-source de facto subsidiary for Microsoft. This observation may stem from the complex partnership between Microsoft and OpenAI, especially after a significant investment.

Interestingly, Elon Musk dropped the case against OpenAI and its CEO without prejudice, leaving the option open for a future relaunch of the lawsuit.


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