OpenAI Forced to Abandon Plans to Become For-Profit

Money Matters

OpenAI may be raking in the investor dough, but thanks in part to erstwhile cofounder Elon Musk, the company won't be going entirely for-profit anytime soon.

In a blog post this week, the Sam Altman-run company announced that it would remain under the control of its original non-profit governing board as it shifts its planned restructuring efforts of its for-profit arm.

"Our for-profit LLC, which has been under the nonprofit since 2019, will transition to a Public Benefit Corporation (PBC)," the post reads, which is a "purpose-driven company structure that has to consider the interests of both shareholders and the mission."

Though Musk was not named, that allusion to "the mission" — the building of artificial general intelligence (AGI) that "benefits all of humanity" — hearkens back to the billionaire's lawsuit alleging that OpenAI strayed from said purpose when initially launching its for-profit arm in 2019 upon his exit.

OpenAI claims in its post that it came to the decision to remain under the control of the non-profit board — the same one that fired Altman in late November 2023, only to reinstate him a few days later — "after hearing from civic leaders and engaging in constructive dialogue with the offices of the Attorney General of Delaware and the Attorney General of California."

Mission Impossible

Late last December, amid Musk's ongoing suit that was initially filed in March 2024, the company announced its plans to restructure into a PBC that would help it "raise more capital than we’d imagined" while staying on-mission.

That plan, as CNN reports, raised alarm bells about how OpenAI would balance raising gobs of money with its beneficial AGI mission. It seems that this latest move is its response — though according to Musk's attorney Marc Toberoff, the PBC announcement "changes nothing."

"OpenAI’s announcement is a transparent dodge that fails to address the core issues: charitable assets have been and still will be transferred for the benefit of private persons," Toberoff said in a statement provided to Bloomberg. "The founding mission remains betrayed."

In a rebuttal to the same outlet, an OpenAI insider hit back at Musk and his "baseless lawsuit," which "only proves that it was always a bad-faith attempt to slow us down."

Accusations aside, this is still a pretty far cry from turning OpenAI into a bona fide for-profit venture — and regardless of what the company claims, Musk's almost certainly jealousy-based lawsuit has played a role in making sure that doesn't happen.

More on OpenAI moves: OpenAI Trying to Buy Chrome So It Can Ingest Your Entire Online Life to Train AI

The post OpenAI Forced to Abandon Plans to Become For-Profit appeared first on Futurism.