Transition to a Public Benefit Corporation

OpenAI has announced plans to restructure its organization, moving its for-profit subsidiary towards becoming a public benefit corporation (PBC). This change aligns OpenAI with competitors like Anthropic and xAI, who also operate under this model. PBCs are designed to prioritize both shareholder interests and broader societal benefits.

Nonprofit Oversight and Ownership

The nonprofit arm of OpenAI will retain significant control while also holding a substantial amount of shares in the new PBC. According to a recent blog post by OpenAI, this arrangement is intended to enhance resources available for societal initiatives, with the nonprofit committed to maintaining its foundational mission.

Regulatory Oversight

Kathy Jennings, Delaware’s Attorney General, expressed support for OpenAI’s commitment to nonprofit control, stating that her office will review the new structure to ensure compliance with Delaware law. “I intend to review it for compliance with Delaware law by ensuring that it accords with OpenAI’s charitable purpose,” Jennings remarked.

California Attorney General Rob Bonta did not provide immediate comments following the announcement.

Criticism from Advocacy Groups

Robert Weissman, co-president of Public Citizen, critiqued OpenAI’s restructuring plans as insufficient. He argued that the lack of new limitations regarding the for-profit’s adherence to the nonprofit’s mission raises concerns. “This leaves us where we are, which is with a nonprofit purportedly controlling a for-profit but exercising no visible restraint on the for-profit,” Weissman stated.

Potential for Significant Resources

OpenAI’s recent funding round has valued the organization at approximately $300 billion. As a result, shares held by the nonprofit could potentially lead to immense financial resources, positioning it to become one of the most well-funded foundations ever established. Activists in California are advocating for the nonprofit to secure a “fair value” of shares to ensure its independence and integrity.

Future Outlook and Company Philosophy

In a message to employees, CEO Sam Altman emphasized the unique nature of OpenAI, stating, “OpenAI is not a normal company and never will be.” This perspective underscores the company’s commitment to balancing profit generation with its societal mission as it navigates its new public benefit structure.