Openai said Monday that it has been restructured as a public benefits company and will allow the nonprofit that manages Openai to maintain the company's grip.
The decision was a victory for Openai critics, including one of its founders Elon Musk, who complained that the company was focusing on profits and abandoned its early plans to build an artificial intelligence system with safer AI systems in mind.
The changes announced Monday are the latest in corporate dramas of what many consider to be the world's most influential AI company. Released in late 2022, Openai's ChatGpt was an overnight success scrambled the rest of the tech industry. In just a few years, large Tech companies have spent billions on their AI projects, with hundreds of millions more planned for the last decade.
Musk, who now runs his own AI company, sued Openai over a plan to set up a change to the corporate structure from an unorthodox system that gave non-profit surveillance for commercial companies. However, he was not the only critic of Openai's planned change. The California Attorney General also said Openai is headquartered and legally created Delaware is monitoring the restructuring. California Attorney General Rob Bonta's office said in a statement that it is considering Openai's new plans.
And in recent weeks, many scholars in the legal community and experts such as Jeffrey Hinton, who won a Nobel Prize for his pioneering AI research last year, have also publicly expressed concern about Openai's direction.
A discussion of how Openai should be constructed and how its priorities should be constructed into basic questions about artificial intelligence: Should researchers rush head-on to develop new, more powerful AI systems? Or should the theoretical risks that AI presents to humanity inform everything these researchers create?
Openai was launched in 2015 with that tension in mind.
Openai CEO Sam Altman created an artificial intelligence organization in late 2015 that created several other Silicon Valley figures as a nonprofit. In 2018, after Musk left the Power struggle, Altman attached Openai to a commercial company, allowing him to raise the billions of dollars needed to build AI technology.
However, the nonprofit retained a grip in the structure that some viewed as Aromado State in the company's growth. Last year, Altman and his company began working on plans to shift management from nonprofits to Openai investors.
Shortly afterwards, Musk sued Federal Courthouse Open, Altman and another founder, Greg Brockman, to assert that the company and AI commercial interests were placed ahead of the public interest.
This year, Musk and his consortium of investors also offered to buy assets from a nonprofit that manages Openai for more than $97 billion. Openai's board of directors declined the bid.
Now, the company is significantly supported by its plans to move control away from nonprofits. It is unclear whether the new structure that allows nonprofits to become Openai's biggest shareholder will affect Musk's lawsuit.
Public benefit corporations are often described as organizations designed to create public and social benefits, allowing outsiders to invest in roughly the same ways they invest in other companies.
“We are extremely pleased that the nonprofit has made a decision to maintain control,” Altman said at a press conference. He added that the new change “sets us up to have a more understandable structure to do what a company like us has to do.”
Openai said it is still negotiating the nonprofit's shares for the new company, and that the nonprofit will select executives for the new entity.
“We've seen a lot of people who are not a fan of their own,” said Jill R. Holwitz, a law professor at Northwestern University who specializes in nonprofits. “But we still don't know what control means.”
Japanese conglomerate SoftBank has recently led a $40 billion funding round in Open Eye, valued the $300 billion company. If this shift is not completed by the end of the year, SoftBank has the option of reducing its total contribution to $20 billion if anyone familiar with the latest investment transactions.
Altman said he is confident that funds will not be cut.
“After hearing from our civic leaders and engaged in constructive dialogue with the Delaware Attorney General and the California Attorney General, the nonprofit decided to maintain control of Openai,” Openai Chairman Brett Taylor said in a statement.
(The New York Times sued Openai and its partner Microsoft, accusing them of copyright infringement over news content related to AI Systems. Openai and Microsoft denied these claims.)
