OpenAI’s Potential Shift to a For-Profit Model and Board Changes
OpenAI, an artificial intelligence (AI) company, is reportedly contemplating a transition from its current capped-profit corporation structure to an unrestricted for-profit model. This potential change was first reported by The Information, citing discussions led by CEO and co-founder Sam Altman with shareholders during the week of June 10. If implemented, this shift could result in OpenAI’s nonprofit board losing control of the company.
OpenAI is currently valued at around $86 billion. The company’s structure is described as a partnership between its original nonprofit entity and a new capped-profit arm. This model was intended to balance incentivizing research into artificial general intelligence (AGI) with maintaining the company’s overarching vision. The shift to a capped-profit model was seen as necessary due to insufficient donations to support OpenAI’s work, prompting the need for a new funding model to attract stakeholders. Despite this, OpenAI still advises investors to view their investments as high-risk, akin to donations, with the possibility of no return.
This consideration for restructuring comes as CEO Sam Altman has been revamping the board of directors with new appointees, including Sue Desmond-Hellmann, former CEO of the Bill and Melinda Gates Foundation; Nicole Seligman, former Sony vice president; and Fidji Simo, CEO and chair of Instacart. Additionally, retired U.S. Army general and former National Security Agency (NSA) director Paul Nakasone has been added to the board.
The appointment of Nakasone has sparked a strong response from Edward Snowden, a former U.S. intelligence contractor. Snowden expressed his distrust on social media, specifically mentioning ChatGPT and warning the public against trusting OpenAI or its products. He suggested that the appointment of an NSA director to OpenAI’s board represents a significant and concerning shift, describing it as a “calculated betrayal of the rights of every person on Earth.”
