OpenAI CEO Sam Altman has said that his company was made “unusual” on purpose. Now, that unusualness is getting in the way of raising more money from investors.
In a Friday blog post, the company behind the popular AI chatbot ChatGPT said its board is deep into planning how OpenAI will “become more than a lab and a startup” in 2025. A central part of this shift will involve its convoluted structure—wherein a nonprofit currently controls a for-profit arm, which itself controls a holding company that controls another for-profit entity.
As Fortune reported in September, Altman told his staff at the time that OpenAI would next year become a more traditional for-profit company. In its latest blog post, the company publicly confirmed the planned change for the first time.
The new entity will likely be a public benefit corporation registered in Delaware, OpenAI said. Such a business is a traditional for-profit, but with a stated mission to "produce a public benefit."
A version of the non-profit would continue to exist, the blog post said. But it would no longer serve a controlling role.
With the planned changes, OpenAI acknowledged that its current structure, in place since 2019, is a disadvantage in an increasingly competitive AI marketplace. To hammer home the point, OpenAI linked in its blog post to several reports and studies showing rivals, like Meta’s Llama models and Anthropic’s Claude, rising in popularity.
“As we enter 2025, we will have to become more than a lab and a startup — we have to become an enduring company,” the post said.
For OpenAI, part of becoming an enduring company is satisfying its seemingly insatiable appetite for money. Despite having recently raised $6.6 billion, the largest venture capital round in history, the company is looking to raise even more capital. In order to get it, OpenAI must appease potential investors who may have previously declined due to its corporate structure and a cap on the potential profits that they could earn that comes with the company's structure.
In a section of Friday's blog post titled “The Present,” OpenAI said: “We once again need to raise more capital than we imagined.”
“Investors want to back us but, at this scale of capital, need conventional equity and less structural bespokeness.”
Appeasing investors, raising money for costly computing, and adding employees appear to be top of mind for OpenAI. It mentions capital and investors in the blog post as many times as AGI, or artificial general intelligence, a hypothetical but long-avowed goal of OpenAI that refers to AI becoming as capable as a human at certain tasks.
Currently, if OpenAI achieves AGI, investors wouldn't reap any of the financial benefits because of how such tools would be licensed to others.
Under a more traditional for-profit corporate structure, such financial exceptions for AGI, or any limit on investor returns, are likely to change as well. And OpenAI left its door wide open for any future structural changes, saying it’s “learned to think of the mission as a continuous objective rather than just building any single system”
“The world is moving to build out a new infrastructure of energy, land use, chips, data centers, data, AI models, and AI systems for the 21st century economy,” the post said. “We seek to evolve in order to take the next step in our mission, helping to build the AGI economy and ensuring it benefits humanity.”
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