The giant artificial intelligence start-up dialed back its corporate reorganization plan, but big questions remain about its future.
OpenAI backtracks
OpenAI’s decision to scale back its ambitious corporate reorganization has drawn lots of scrutiny, including what the plan means for artificial intelligence safety, potential profits for investors and an ongoing fight with Elon Musk.
What’s emerging is that in some ways, how OpenAI operates isn’t changing much. But there are still plenty of questions about the future of the consequential A.I. developer.
The latest: OpenAI announced a smaller-scale change to its famously complex structure. Remember that it was founded as a nonprofit. But in 2019, it set up a for-profit subsidiary to start raising money from investors to finance its eye-wateringly expensive A.I. research. Then last year, the company moved to turn itself into a for-profit entity in which the nonprofit held a stake but didn’t have control.
Now, OpenAI plans to turn its for-profit subsidiary into a public benefit corporation, which would still be controlled by the nonprofit, though the size of its stake remains undetermined. (Got all that?) Sam Altman, its C.E.O., said yon Monday that the revised plan still gives his start-up “a more understandable structure to do the things that a company like us has to do.”
What does this mean for investors in OpenAI? Remember that they have collectively poured nearly $64 billion into the A.I. lab, valuing it at $300 billion. In some ways, little has changed, some are saying privately: They’re still keeping a piece of the company, and in fact will benefit from a planned removal of caps on the profits they can take from the business.
Altman also argued on Monday that the move essentially fulfills a requirement embedded in a recent deal with SoftBank: Become a for-profit entity by year end, or forfeit $10 billion of a planned $30 billion investment by the Japanese tech giant.