OpenAI scraps for-profit structure, but keeps door open for investments

OpenAI is not changing to a for-profit company after all, they revealed last night. Instead, they are making minor adjustments to the corporate structure to welcome more investment.

This means changing the structure of it’s operational, for profit Limited Liability Company (LLC) to a Public Benefit Corporation (PBC) that will be controlled by it’s non-profit entity intended to «ensure that artificial general intelligence benefits all of humanity,» OpenAI writes in a blog post.

A Public Benefit Corporation is a profit-based company that legally commits to both profit and purpose — like «advancing AI for all» — and must consider that mission alongside shareholder value. It also has to publish a yearly «public benefit» report. It’s essentially a mission-specific corporate vehicle.

Need maybe trillions of dollars
This ends months or even years or wrangling over how OpenAI can fundraise and protect investors while being a privately held, idealistic company loyal to the mission, not to protecting investor’s goals of extracting profits.

The new structure means that the PBC will be free to raise cash from investors and «get resources in such a way that we can make our services broadly available to all of humanity, which currently requires hundreds of billions of dollars and may eventually require trillions of dollars,» CEO Sam Altman wrote in a company wide email.

Non-profit arm still in control
The non-profit LCC will, however, maintain control and be «be a large shareholder of the PBC, giving the nonprofit better resources to support many benefits,» OpenAIs blog post goes on to say.

This should end a fair amount of disputes about the possible shift to a solely for-profit structure, preserve shareholder value and investments, and possibly undermine that pesky lawsuit from Elon Musk — which he said is still going forward.

At the same time, it ensures that OpenAI can take on investments in what may be a trillion dollar race for the future of AI.

Read more: OpenAI writes in a blog post>OpenAIs announcement, Reuters, TechCrunch, Axios, Gimodo and Mashable.