You think Microsoft and those other behemoths want to invest in a non-profit that has objectives other than making money? That's un-American!
OpenAI toys with shifting not for profit structure to, you guessed it, profit
Nvidia and Apple are reportedly discussing investing in the ChatGPT-maker's multi-billion dollar funding round
By Britney Nguyen, Quartz Media
PublishedYesterday
As OpenAI reportedly looks for investors for a multi-billion dollar funding round, the artificial intelligence startup is also reportedly talking to investors about changing its corporate structure.
The ChatGPT-maker is discussing restructuring its non-profit status to attract investors, the Financial Times reported, citing unnamed people familiar with the matter.
Under OpenAI’s current structure, the company’s investors are issued equity by its for-profit arm that is overseen by its non-profit board whose “principal beneficiary is humanity, not OpenAI investors.” The company announced its “capped profit” structure in 2019, after founding the company in 2015 as a non-profit. OpenAI has not made a final decision regarding its structure, but is considering not having the cap, the Financial Times reported.
“We remain focused on building AI that benefits everyone and as we’ve previously shared we’re working with our board to ensure that we’re best positioned to succeed in our mission,” an OpenAI spokesperson said in a statement shared with Quartz. “The nonprofit is core to our mission and will continue to exist.”
Meanwhile, the company is reportedly in talks to raise billions in new funding from major backers such as chipmaker Nvidia, Apple, and Microsoft, that could value the company above $100 billion. Venture capital firm Thrive Capital is leading the round with an investment around $1 billion, the Wall Street Journal reported.
Earlier this year, Elon Musk, who co-founded OpenAI before leaving in 2018, filed a lawsuit against the startup and its chief executive Sam Altman, alleging its multi-billion dollar partnership with Microsoft betrays its founding commitment to benefiting humanity over generating profit. The lawsuit claimed a breach of contract, breach of fiduciary duty, and unfair business practices. Musk asked that OpenAI be ordered to open its research and technology to the public, and requested Altman give up money from those alleged illegal practices. Musk dropped the lawsuit in June.
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