After criticism, OpenAI shelves plans to become a for-profit company

OpenAI, the company that develops ChatGPT, has decided to cancel its plans to transform the organization into a for-profit company. Instead, the non-profit organization that founded OpenAI will continue to run the business as before.

The for-profit plans, announced in December 2024, were justified at the time by a need to secure sufficient capital to keep developing expensive artificial general intelligence (AGI). Now, instead of a full conversion to a for-profit company, OpenAI’s for-profit LLC will be transformed into a Public Benefit Corporation (PBC), which is a type of US company that’s beholden to both its shareholders and its purpose-driven mission. The existing OpenAI non-profit organization will retain control of the PBC and become one of its largest shareholders.

OpenAI says the decision was made after listening to community leaders and engaging in constructive dialogue with the Attorneys General of the states of Delaware and California.

Founded in 2015 as a non-profit organization, OpenAI has been the subject of widespread criticism for wanting to transition to a for-profit structure. Critics include co-founder Elon Musk—who has sued OpenAI for abandoning its original mission to develop AI for the benefit of humanity—as well as former employees, other non-profit organizations, Nobel laureates, and law professors.

According to TechCrunch, OpenAI reportedly needed to complete its for-profit transformation before the end of this or next year in order to not risk losing some of its recently raised capital. It’s still unclear what—if any—the consequences might be with OpenAI backing out of those plans.

Further reading: OpenAI’s newest AI models hallucinate way more

Source: https://www.pcworld.com/article/2774534/after-criticism-openai-shelves-plans-to-become-a-for-profit-company.html

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