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
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.
