In a significant turn of events, artificial intelligence (AI) major OpenAI announced on May 05 that the company will maintain its nonprofit control of its business operations despite plans to create a public benefit corporation (PBC). This decision likely constrains CEO Sam Altman's authority over the ChatGPT maker.
In a letter to the employees, Altman said, &ldquo;We made the decision for the nonprofit to retain control of OpenAI 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.&rdquo;
&ldquo;Our mission is to ensure that artificial general intelligence (AGI) benefits all of humanity,&rdquo; the letter said. &ldquo;We are committed to this path of democratic AI. We want to put incredible tools in the hands of everyone,&rdquo; it added.
OpenAI had earlier proposed restructuring its operations to increase its for-profit status, a move that had raised concerns about the company&rsquo;s commitment to its original mission of developing artificial general intelligence for the benefit of humanity. However, following mounting pressure and legal challenges, including a lawsuit filed by Elon Musk, OpenAI has altered its approach, with the nonprofit parent organisation now set to remain in charge.
<h2 dir="ltr">The new structure</h2>
CNBC reported that in a video call with reporters, OpenAI&rsquo;s board chairman Bret Taylor said, &ldquo;With the structure we&rsquo;re contemplating, the not-for-profit will remain in control of OpenAI&rdquo;.&nbsp;
&ldquo;We will be converting the limited liability company that is a subsidiary of that nonprofit to a public benefit corporation. By doing so, it will change the equity structure of that company so that employees, investors and the not-for-profit can own equity in that PBC,&rdquo; he added.
Taylor said OpenAI had commissioned outside financial advisors to consult on the recapitalisation. He declined to share how much of a stake the nonprofit would have in the company, though it will be a majority.
Under the new structure, OpenAI&rsquo;s nonprofit board will maintain governance over the company, with the same directors likely serving on both the nonprofit and the PBC boards. Taylor reassured reporters that the company's mission will remain its top priority, and the nonprofit board's fiduciary duty will be strictly bound to that mission.
<h2 dir="ltr">Backlash on the for-profit plan</h2>
OpenAI began as a nonprofit, but Altman has been proposing changes to the firm&rsquo;s structure since his brief yet controversial ouster from the AI research lab in November 2023. Tesla CEO Elon Musk, who was also a co-founder of OpenAI, has also criticised the company and filed a lawsuit blocking the plan, accusing Altman of prioritising growth over the lab&rsquo;s original mission of creating technology for the benefit of humanity.
In December, Altman announced plans to revamp OpenAI&rsquo;s structure to become a public benefit company. The move raised concerns about whether OpenAI would allocate enough funds to its nonprofit arm and whether it would lead to greater corporate influence.
The plan drew sharp criticism from former OpenAI employees and AI experts. Some expressed concerns that transitioning to a for-profit structure would undermine OpenAI&rsquo;s core mission and reduce accountability, particularly as the company works toward creating AGI. A letter sent to attorneys general in California and Delaware last month warned that removing nonprofit oversight could "subvert OpenAI&rsquo;s charitable purpose" and create significant governance risks.
OpenAI&rsquo;s hybrid structure has included a capped-profit limited partnership that was created in 2019. The original nonprofit is the controlling shareholder and would have been spun out as an independent entity if OpenAI had succeeded in its efforts. With that change no longer taking place, OpenAI&rsquo;s investors receive convertible notes that will turn into equity.
<h2 dir="ltr">Growth path</h2>
As OpenAI charts its new path, it continues to draw attention in the world of AI technology. OpenAI has agreed to acquire AI-based coding tool Windsurf, an AI coding assistant for developers and enterprises, for around $3 billion, according to a Bloomberg report. The acquisition of Windsurf is currently not closed, and if completed would be the largest ever by the ChatGPT maker.
The acquisition would bolster its position in the competitive AI landscape, positioning OpenAI against rivals such as Anthropic and Microsoft&rsquo;s GitHub.
Despite facing ongoing legal disputes with Elon Musk, OpenAI&rsquo;s market value remains robust, estimated at $300 billion, with 400 million weekly users of its flagship product, ChatGPT. These recent developments reflect the company's ongoing efforts to balance rapid growth with its core mission, even as it navigates an increasingly complex regulatory landscape.
(With inputs from agencies)

Business& Economy:  OpenAI’s nonprofit board will maintain governance over the company, with the same directors likely serving on both the nonprofit and the PBC boards

In a significant turn of events, artificial intelligence (AI) major OpenAI announced on May 05 that the company will maintain its nonprofit control of its business operations despite plans to create a public benefit corporation (PBC). This decision likely constrains CEO Sam Altman's authority over the ChatGPT maker. In a letter to the employees, Altman said, “We made the decision for the nonprofit to retain control of OpenAI 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.” “Our mission is to ensure that artificial general intelligence (AGI) benefits all of humanity,” the letter said. “We are committed to this path of democratic AI. We want to put incredible tools in the hands of everyone,” it added. OpenAI had earlier proposed restructuring its operations to increase its for-profit status, a move that had raised concerns about the company’s commitment to its original mission of developing artificial general intelligence for the benefit of humanity. However, following mounting pressure and legal challenges, including a lawsuit filed by Elon Musk, OpenAI has altered its approach, with the nonprofit parent organisation now set to remain in charge. The new structure CNBC reported that in a video call with reporters, OpenAI’s board chairman Bret Taylor said, “With the structure we’re contemplating, the not-for-profit will remain in control of OpenAI”. “We will be converting the limited liability company that is a subsidiary of that nonprofit to a public benefit corporation. By doing so, it will change the equity structure of that company so that employees, investors and the not-for-profit can own equity in that PBC,” he added. Taylor said OpenAI had commissioned outside financial advisors to consult on the recapitalisation. He declined to share how much of a stake the nonprofit would have in the company, though it will be a majority. Under the new structure, OpenAI’s nonprofit board will maintain governance over the company, with the same directors likely serving on both the nonprofit and the PBC boards. Taylor reassured reporters that the company's mission will remain its top priority, and the nonprofit board's fiduciary duty will be strictly bound to that mission. Backlash on the for-profit plan OpenAI began as a nonprofit, but Altman has been proposing changes to the firm’s structure since his brief yet controversial ouster from the AI research lab in November 2023. Tesla CEO Elon Musk, who was also a co-founder of OpenAI, has also criticised the company and filed a lawsuit blocking the plan, accusing Altman of prioritising growth over the lab’s original mission of creating technology for the benefit of humanity. In December, Altman announced plans to revamp OpenAI’s structure to become a public benefit company. The move raised concerns about whether OpenAI would allocate enough funds to its nonprofit arm and whether it would lead to greater corporate influence. The plan drew sharp criticism from former OpenAI employees and AI experts. Some expressed concerns that transitioning to a for-profit structure would undermine OpenAI’s core mission and reduce accountability, particularly as the company works toward creating AGI. A letter sent to attorneys general in California and Delaware last month warned that removing nonprofit oversight could "subvert OpenAI’s charitable purpose" and create significant governance risks. OpenAI’s hybrid structure has included a capped-profit limited partnership that was created in 2019. The original nonprofit is the controlling shareholder and would have been spun out as an independent entity if OpenAI had succeeded in its efforts. With that change no longer taking place, OpenAI’s investors receive convertible notes that will turn into equity. Growth path As OpenAI charts its new path, it continues to draw attention in the world of AI technology. OpenAI has agreed to acquire AI-based coding tool Windsurf, an AI coding assistant for developers and enterprises, for around $3 billion, according to a Bloomberg report. The acquisition of Windsurf is currently not closed, and if completed would be the largest ever by the ChatGPT maker. The acquisition would bolster its position in the competitive AI landscape, positioning OpenAI against rivals such as Anthropic and Microsoft’s GitHub. Despite facing ongoing legal disputes with Elon Musk, OpenAI’s market value remains robust, estimated at $300 billion, with 400 million weekly users of its flagship product, ChatGPT. These recent developments reflect the company's ongoing efforts to balance rapid growth with its core mission, even as it navigates an increasingly complex regulatory landscape. (With inputs from agencies)

OpenAI reverses restructuring plan; nonprofit arm to retain control

If the last half of last year belonged to Elon Musk for his tumultuous Twitter takeover, the ongoing first half of 2023 is being spotlighted upon OpenAI's ChatGPT for the way it has nearly mainstreamed the use of Artificial Intelligence at workplaces worldwide.&nbsp;

This weekend, a blast from the recent past has detonated the anticipatory capabilities of Silicon Valley with several 'what if' reactions.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/technology/elon-musk-forming-team-to-develop-ai-rival-of-chatgpt-report-566717">Elon Musk forming team to develop AI rival of ChatGPT: Report</a>&nbsp;

A Semafor report has claimed that Elon Musk stood the chance to be one of the defining faces behind ChatGPT's Artificial Intelligence run. But before OpenAI's ChatGPT could launch its Artificial Intelligence drive into global technological pathways, Musk left OpenAI's board.&nbsp;

<h2>Elon Musk and ChatGPT: What was Twitter owner's role in OpenAI?</h2>

Elon Musk was reportedly a co-founder and board member of OpenAI. He left the OpenAI board in 2018. The official reason cited by Musk when he left the OpenAI board was to avoid a conflict of interest with Tesla.&nbsp;

"As Tesla continues to become more focused on AI, this will eliminate a potential future conflict for Elon," OpenAI had said in a blog post then.&nbsp;

ALSO WATCH |&nbsp;<a href="https://www.wionews.com/videos/chatgpt-takes-the-world-by-storm-within-50-days-of-launch-555307">ChatGPT takes the world by storm within 50 days of launch</a>

However, Semafor report points to a failed takeover attempt as the reason behind Musk leaving OpenAI with Sam Altman at the helm of affairs.&nbsp;

<h2>Elon Musk and ChatGPT fallout: What happened?</h2>

According to people familiar with the matter cited by Semafor, Musk told fellow co-founder Sam Altman that he thought OpenAI was lagging behind Alphabet-owned Google in the AI race. Musk reportedly offered to takeover himself but Altman and other co-founders refused, following which Musk left the board, Semafor reported.

<h2>Elon Musk's outspoken criticism of ChatGPT</h2>

In 2019, Musk said he "didn't agree with some of what OpenAI team wanted to do." In 2020, he said that OpenAI "should be more open."

In December, days after ChatGPT was launched, he said, "OpenAI was started as open-source &amp; non-profit. Neither are still true."&nbsp;

On a Twitter thread posted by Altman, Musk commented, "ChatGPT is scary good. We are not far from dangerously strong AI."

Last month, Musk continued his criticisms of OpenAI.

"OpenAI was created as an open source (which is why I named it "Open" AI), non-profit company to serve as a counterweight to Google, but now it has become a closed source, maximum-profit company effectively controlled by Microsoft. Not what I intended at all," he tweeted.

&nbsp;

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If the last half of last year belonged to Elon Musk for his tumultuous Twitter takeover, the ongoing first half of 2023 is being spotlighted upon OpenAI's ChatGPT for the way it has nearly mainstreamed the use of Artificial Intelligence at workplaces worldwide.

If the last half of last year belonged to Elon Musk for his tumultuous Twitter takeover, the ongoing first half of 2023 is being spotlighted upon OpenAI's ChatGPT for the way it has nearly mainstreamed the use of Artificial Intelligence at workplaces worldwide. This weekend, a blast from the recent past has detonated the anticipatory capabilities of Silicon Valley with several 'what if' reactions. ALSO READ | Elon Musk forming team to develop AI rival of ChatGPT: Report A Semafor report has claimed that Elon Musk stood the chance to be one of the defining faces behind ChatGPT's Artificial Intelligence run. But before OpenAI's ChatGPT could launch its Artificial Intelligence drive into global technological pathways, Musk left OpenAI's board. Elon Musk and ChatGPT: What was Twitter owner's role in OpenAI? Elon Musk was reportedly a co-founder and board member of OpenAI. He left the OpenAI board in 2018. The official reason cited by Musk when he left the OpenAI board was to avoid a conflict of interest with Tesla. "As Tesla continues to become more focused on AI, this will eliminate a potential future conflict for Elon," OpenAI had said in a blog post then. ALSO WATCH | ChatGPT takes the world by storm within 50 days of launch However, Semafor report points to a failed takeover attempt as the reason behind Musk leaving OpenAI with Sam Altman at the helm of affairs. Elon Musk and ChatGPT fallout: What happened? According to people familiar with the matter cited by Semafor, Musk told fellow co-founder Sam Altman that he thought OpenAI was lagging behind Alphabet-owned Google in the AI race. Musk reportedly offered to takeover himself but Altman and other co-founders refused, following which Musk left the board, Semafor reported. Elon Musk's outspoken criticism of ChatGPT In 2019, Musk said he "didn't agree with some of what OpenAI team wanted to do." In 2020, he said that OpenAI "should be more open." In December, days after ChatGPT was launched, he said, "OpenAI was started as open-source & non-profit. Neither are still true." On a Twitter thread posted by Altman, Musk commented, "ChatGPT is scary good. We are not far from dangerously strong AI." Last month, Musk continued his criticisms of OpenAI. "OpenAI was created as an open source (which is why I named it "Open" AI), non-profit company to serve as a counterweight to Google, but now it has become a closed source, maximum-profit company effectively controlled by Microsoft. Not what I intended at all," he tweeted. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Elon Musk, who co-founded ChatGPT-maker OpenAI, left before the firm made fortunes

According to the reports, Microsoft Corp is in discussions to invest $10 billion in the company that owns ChatGPT, OpenAI, valuing the San Francisco-based firm at $29 billion.

Microsoft set to invest $10 billion in Musk's OpenAI

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OpenAI reverses restructuring plan; nonprofit arm to retain control

Elon Musk, who co-founded ChatGPT-maker OpenAI, left before the firm made fortunes

Microsoft set to invest $10 billion in Musk's OpenAI