OpenAI announced that it would remain under the control of a non-profit organization, abandoning plans to become a for-profit company. The decision was in response to concerns from the public and activists about the safety of artificial intelligence.
OpenAI’s investors, including Microsoft, an early major backer, have been pushing for a transition to a for-profit model to protect their investment. After the turbulent events of 2023, when the board fired Sam Altman but reinstated him after employee protests, investors have been demanding a more stable structure. They have been pushing for OpenAI to become a traditional, for-profit company within two years.
OpenAI initially planned to become a public benefit corporation, which would appease investors who were expecting tens of billions of dollars in investment. However, that plan has faced resistance from activists and co-founder Elon Musk, who even filed a lawsuit, saying it contradicted the organization's mission.
OpenAI ultimately decided to keep its for-profit division open for commercial operations but overseen by a non-profit board of directors. Sam Altman said the decision would allow the company to safely and quickly develop AI and make it accessible to everyone.
At the same time, the decision creates challenges for raising funding. Japanese investment giant SoftBank agreed to invest $30 billion, but made it a condition that OpenAI become a profitable company. The SoftBank document states that without this change, the investment volume could be reduced to $20 billion.
OpenAI needs this level of funding to provide the vast computing resources needed to build complex AI models. Altman acknowledged that the company's original vision did not foresee the need for hundreds of billions of dollars in infrastructure.
Despite financial challenges, OpenAI remains one of Silicon Valley's most successful startups, gaining global fame after the launch of ChatGPT in 2022.