OpenAI is reportedly in talks with the Attorney General of California and Delaware about going from nonprofit to for-profit.
The non-profit division won’t completely go away. It will retain a minority stake in the for-profit company.
However, a transition like this comes with a lot of challenges. Apart from legal challenges, a lot of people might criticize this move.
OpenAI in Talks with Regulators About Transitioning Into For-Profit After months of preparation, OpenAI has finally started talks with California and Delaware regulators about its plans to become for-profit.
Direct requests have been made to the Attorney Generals of both the states and while none of them responded to our requests comment, it’s safe to say that this won’t be an easy process.
It’s important to note that the OpenAI non-profit is not completely going away. It will retain a minority stake in the for-profit company . Why Does OpenAI Want to Become For-Profit?
The main reason is quite obvious – it wants to make more money. But it’s not just about personal financial gains . OpenAI is now at a point where it’s building large-scale AI models, things that people have never seen before.
Innovations like these require a lot of money, which a nonprofit’s budget can’t support. So by becoming for-profit, it can attract more investors and fund its projects .
It already established a for-profit subsidiary in 2019 to keep up with the expenses but it looks like that’s not enough anymore. Challenges In the Process Turning a non-profit into a for-profit organization comes with many challenges. For starters, in California, a transition like this requires the value of the company’s assets to be distributed among charities . But in OpenAI’s case, it’s not that simple because most of its assets are just intellectual property, such as large language models.This decision might also be met with a lot of resistance , considering that the company was initially set up with a noble cause and is now digressing from its vision. For example, last year, Elon Musk, one of the company’s co-founders and biggest investors, sued it for breaching the terms […]
OpenAI Is in Talks with Regulators About Transitioning Into a For-Profit Organization
