OpenAI to Establish a PBC Structure Next Year, Operating Both For-Profit and Non-Profit Organizations

OpenAI has just revealed in a blog post that its board of directors is evaluating the company's current structure. Originally a non-profit organization, OpenAI also established a for-profit entity to raise funds and generate revenue.

As previously rumored, OpenAI considered becoming a for-profit organization to better obtain shareholder funding. However, likely due to reputational considerations, the company has decided to operate both for-profit and non-profit organizations, using funds obtained from the for-profit entity to support the non-profit one.

In OpenAI's latest funding round, some investors requested the company to change its structure and type from a non-profit to a for-profit organization. OpenAI's approach should meet investors' requirements without the need to return investments in case of a disagreement.

Regardless, it's undeniable that OpenAI's new structure will primarily be for-profit, aiming to earn significant revenue through the for-profit organization to achieve the goal of General Artificial Intelligence (AGI), while providing profit sharing for investors and employees. The remaining funds will flow to the non-profit entity to continue fulfilling its mission.

By 2025, OpenAI will transform its current for-profit entity into a Public Benefit Corporation (PBC) in Delaware, USA, with common stock and the OpenAI mission as its public benefit interests. The PBC structure requires the company to balance the interests of shareholders, stakeholders, and the public interest in its decision-making process.

This new structure will allow OpenAI to raise necessary funds through the sale of shares like other conventional companies. OpenAI plans to make this non-profit organization one of the most resource-rich in history.

Regarding the PBC structure, shares of the for-profit organization will also be given to the non-profit organization, with the valuation determined by an independent financial advisor. The PBC company will also operate and control OpenAI's operations and business, while the non-profit organization will hire a leadership team and employees to conduct charitable activities in healthcare, education, and science among other fields.

Finally, OpenAI claims it will seek to develop and ensure that General Artificial Intelligence benefits humanity.