AI organization reconsiders decision to relinquish management control from non-profit entity
It's a significant turn of events for OpenAI as they've decided to stick with their non-profit status, ditching the controversial plans to turn into a for-profit company.
The change of heart comes after behind-the-scenes discussions with attorneys general from California and Delaware, following concerns from various stakeholders such as a coalition of California nonprofits and labor groups13. OpenAI will now transformed its for-profit arm into a public benefit corporation, which allows it to raise more capital while staying true to its mission3.
Elon Musk, one of the co-founders who later departed to establish his own AI company, xAI, has been at the forefront of this saga. Musk lodged a legal challenge against OpenAI, objecting to the proposed restructuring plans, claiming they deviated from their original purpose of serving the public interest1. In response, OpenAI and CEO Sam Altman counter-sued Musk, accusing him of attempting to undermine the organization as he develops his rival, xAI1. Musk's legal sparring and public criticism have contributed to the scrutiny OpenAI faced, prompting the company to reconsider its plans1.
However, OpenAI has confirmed that its non-profit status will remain intact, with the non-profit organization continuing to manage the for-profit division4. The startup's structure will remain "extremely close" to its current form, according to OpenAI's chairman, Bret Taylor5.
Further Reading
- Musk v Altman: The Battle to Become King of AI
- Elon Musk Sues OpenAI, Claims Sam Altman Threatened to Fire Staff
- OpenAI vs Elon Musk: A Tale of Two Ethical AI Visions
- OpenAI's For-Profit Arm: What Does It Mean for Artificial Intelligence?
Today, OpenAI has reverted to its non-profit status, abandoning plans to transform into a for-profit company due to public outcry and Elon Musk's intervention. The executive team held discussions with attorneys general from California and Delaware, addressing concerns raised by various stakeholders, including a coalition of California nonprofits and labor groups. OpenAI will now change its for-profit arm into a public benefit corporation, enabling it to continue its mission while raising additional capital. The war of words between Musk and OpenAI's CEO Sam Altman, who is developing a rival AI company called xAI, has contributed to the scrutiny OpenAI has faced, leading to its reconsideration of plans. However, OpenAI's non-profit status will remain intact, and the startup's structure will stay extremely close to its current form, according to OpenAI's chairman, Bret Taylor.
