Artificial startup OpenAI shared the details of its for-profit transition plan. The ChatGPT maker previously announced it would shed its non-profit structure and revealed it would make the move in 2025.
OpenAI said in a blog post shared on its official website that it needs to become a for-profit organization to allow interested parties an easier path to investments, which would allow it to receive necessary funding for projects.
“The hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing the mission,” the blog post said. “We once again need to raise more capital than we’d imagined. Investors want to back us but, at this scale of capital, need conventional equity and less structural bespokeness.”
OpenAI currently has a for-profit business that is controlled by a non-profit organization. The transition would see its existing for-profit become a “Delaware Public Benefit Corporation (PBC) with ordinary shares of stock.”
The non-profit organization would see its interest in the existing for-profit arm transformed into shares in the PBC “at a fair valuation determined by independent financial advisors.” This would make it “one of the best-resourced non-profits in history,” and it would receive new leadership and pursue charitable endeavors in the fields of science, health care, and education.
During its latest funding round in October, OpenAI attracted $6.6 billion in investments, which valued the company at approximately $157 billion.