OpenAI Plans Corporate Overhaul To Draw More Investment

OpenAI plans to overhaul its corporate structure by converting its for-profit business into a Delaware public benefit corporation, seeking to raise capital from investors who want conventional equity stakes.

The Microsoft-backed AI startup will scrap its unusual hybrid model where a nonprofit controls a capped-profit entity. The restructuring aims to help OpenAI compete with tech giants pouring hundreds of billions into AI development, it said.

Under the plan, OpenAI's nonprofit wing will receive shares in the new public benefit corporation at a valuation set by outside advisers. The nonprofit will pursue charitable work in healthcare and education while the corporation runs OpenAI's main operations.

The startup, which launched ChatGPT in 2022 and claims 300 million weekly users, said its current structure hampers fundraising at the scale needed to advance artificial general intelligence development. The restructured business will maintain OpenAI's mission of ensuring AI benefits humanity as its legal mandate.

legal mandate

[dfghjk]

"The restructured business will maintain OpenAI's mission of ensuring AI benefits humanity as its legal mandate."

Legal mandate, sure. Wonder what the consequences be for violating this? Nothing says benefitting humanity like fundraising and profit, right?

Re:

[smooth wombat]

No worse than Leon saying his lousy electric vehicles will help fight climate change [yahoo.com] while at the same time popping out babies. He even called for a carbon tax [inverse.com] only a few years ago. Guess he won't be held to his words, either.

Re:

[buck-yar]

Did Elon address the climate harm done by EV battery production? Where 46% of the co2 is made at the time of mfg and EV's take 8 years to do better than a gasoline car (where most of the carbon in mfg is from steel production). From mile 1, out the door of the mfg plant- 8.8 tons of co2 for the EV vs 5.6 for the ICE.

On average, we look at some 4 tonnes of extra co2 per electric car produced, which has to be offset by 0.5 tonne annually of prevented emissions. According to these figures it would take some 8 years to break even. (Given electric cars run on 100% renewable energy) https://earth.org/environmenta... [earth.org]

After 8 years, will it need a new battery, thus wiping out all advantages? There's a lot of claims the battery will last very long, search for "crowd sourced tesla degradation." But there's al

Re:

[starworks5]

well, considering that they have been violating IRS tax law, and that Elon Musk is suing OpenAI in federal court for violating its nonprofit charter alleging fraud.

Re:

[smooth wombat]

well, considering that they have been violating IRS tax law, and that Elon Musk is suing OpenAI in federal court for violating its nonprofit charter alleging fraud.

No they haven't. Leon's lawyers said a lot of nothing in their most recent filing [cnn.com], which they have to because the first time they sued they got smacked down when OpenAI showed emails from Elmo agreeing to the very thing he was whining about.

He voluntarily left the board of OpenAI, and now that it's making headway he's upset he's not wit

Heading for that payout

[Revek]

Only rarely do these 'open' endeavors keep to the promises they make at the beginning. When that greed hits they forget about those kinds of things quickly.

I don't get it

[Iamthecheese]

Literally no one thinks OpenAI is in business to do anything but make money. Why are they pretending? There's nothing wrong with being a profit-seeking company trying to make AGI. AGI will, imo, be an immense boon to mankind. I don't like how much money OpenAI is wasting on stuff that hasn't worked and I would sooner invest in that guy selling oranges on the entrance to the parkway but hey, at least some part of the money is going into the innovation we need to make AGI happen.

Re:

[gweihir]

There will not be any "AGI" anytime soon. Period. Get some clue.

Translation

[CEC-P]

"We're out of money because the AI bubble is about to pop and nobody wants our stupid overpriced product as costs spiral out of control"

Re:

[gweihir]

Yes, pretty much. Even if tons of people refuse to see it. It is abundantly clear what is happening to anybody not deep in irrational belief.

but surely

[Growlley]

openAi Ltd dont have any assets? and dont call me shirley!

This is the ONLY option available really

[oumuamua]

And the best compromise. First of all note how limited the options are:
Private - the owners control all.
Non-profit - can't raise enough capital
For-profit - the shareholders will demand profit takes top priority over everything else
PBC - a compromise between the two
Government run - motivate by an run for the benefit of the MIC (skynet scenario), there is no 'benefit humanity' bullet point here: https://www.uscc.gov/sites/def... [uscc.gov]

A step towards the AI bubble collapse

[blahbooboo2]

A sign of the AI collapse when the leading company with a yearly loss rate in the billions has to redo their corporate structure to entice the investors This analysis (https://www.wheresyoured.at/burst-damage/ [wheresyoured.at]) lists one of the first warning signs will be when the AI companies start struggling to raise more cash

Trying to delay the inevitable

[gweihir]

This is just part of their "more smoke and more mirrors" strategy to obscure to investors that they have no worthwhile product.

Because they have no product that matters to build

[OneOfMany07]

They've done what they know how to, and they need more money to hail mary it... You all saw the post by a Chinese group that built an AI that shouldn't have been possible (faster, cheaper, etc than the big guys), oh and using NVIDIA illegal hardware of course. Gotta make sure we ban more hardware because that helps soooooo much....