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OpenAI reportedly considering shift to for-profit as CEO stacks board

Validated Media

Artificial intelligence (AI) company OpenAI is reportedly considering making the shift from a capped-profit corporation to an unfettered for-profit model. 

First reported by The Information, CEO and co-founder Sam Altman allegedly told shareholders he was considering the move sometime during the week of June 10. If realized, the pivot would ostensibly result in OpenAI’s non-profit board losing control of the company.

OpenAI currently has a purported private valuation of approximately $86 billion. Its current structure is described as “a partnership between our original Nonprofit and a new capped profit arm” on the company’s website.

The same website mentions that the shift to “capped profit” was meant to incentivize research into the field of artificial general intelligence (AGI) while maintaining the company’s vision. As for why the shift was necessary, according to OpenAI the “donations” required to perform the company’s work were insufficient and a new cash infusion model was necessary to incentivize stakeholders.

However, as of current, the website still maintains a warning that stakeholders should treat their investments as donations.

  Source: OpenAI.  

“Investing in OpenAI Global, LLC, is a high-risk investment. Investors could lose their capital contribution and not see any return. It would be wise to view any investment in OpenAI Global, LLC in the spirit of a donation, with the understanding that it may be difficult to know what role money will play in a post-AGI world.”

The reported push to restructure the company comes as CEO Sam Altman has refitted the board to include himself and numerous newly anointed, handpicked stakeholders. These include former CEO of the Bill and Melinda Gates Foundation Sue Desmond-Hellmann, former Sony VP Nicole Seligman, and Fidji Simo, CEO and chair of Instacart.

Also added to the board recently is retired U.S. Army general and former director of the National Security Agency Paul Nakasone.

Nakasone’s placement on the board of directors elicited a vitriolic response from former U.S. intelligence contactor Edward Snowden.

  Source: Edward Snowden.  

Snowden, posting on X.com, warned the public to “not ever trust @OpenAI or its products,” citing ChatGPT by name and adding that “there is only one reason for appointing an @NSAGov Director to your board.” He concluded with the chilling admonition that the appointment was “a willful, calculated betrayal of the rights of every person on Earth. You have been warned.”

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