OpenAI has stated that it will no longer seek a transition into a fully for-profit business, as there is a huge demand for its AI services. In a Monday letter, Sam Altman announced that OpenAI is facing difficulty keeping up with the global demand, and the company is now slowing services and imposing usage limits.
“We had no idea that this was going to be the state of the world when we launched our research lab almost a decade ago,” Altman said. “But now we see this picture, we are thrilled.”
Rather than turning into a traditional for-profit company, OpenAI’s board has decided to maintain control in a nonprofit form. The for-profit subsidiary will be transformed into a public-benefit corporation (PBC), which has to balance the interests of shareholders with its broader mission. Chairman Bret Taylor stated that the nonprofit will retain controlling interest and be a significant shareholder, which will allow it the resources to facilitate widespread AI access.
The move comes after criticism from AI pioneers such as Geoffrey Hinton, who opposed the change of OpenAI’s foundational safeguards. Elon Musk, a co-founder, also advocated for a return to open-source priorities and even made a bid to purchase OpenAI’s nonprofit arm earlier this year. Musk now leads xAI, a rival AI company.
According to Altman, this structural update will help OpenAI achieve its three core goals: democratizing AI accessibility, building a historic nonprofit force for good, and developing safe artificial general intelligence (AGI). He stressed the enormity of the task, suggesting that the undertaking could ultimately cost trillions of dollars.
OpenAI will continue to attract investment, including a reported $30 billion deal with SoftBank. Employees, investors, and the nonprofit will all be owners in the restructured PBC, which will align the incentives to the shared benefit.
“This is the best way for us to fulfill our mission,” Altman concluded, “and help people create massive benefits for each other with these tools.”
