OpenAI considers for-profit structure to protect CEO Sam Altman

OpenAI considers for-profit structure to protect CEO Sam Altman

According to the company, OpenAI may eventually become partially a for-profit organization. However, the company says that non-profit would remain its core mission.

OpenAI CEO Sam Altman shared with some shareholders plans to change the governance structure to a for-profit one. From then on, the board of directors would have no authority over this component by being part of the nonprofit structure. The plans were shared by The Information.

Behind the change could be a plan to take OpenAI public. From then on, Altman could acquire a stake in the company, something several shareholders previously suggested. This would make it impossible for the board to fire the CEO or staff in high positions. Altman is already trying to prevent this with new board members, but shareholders will prefer to obtain more certainty.

Also read: Investigation into OpenAI’s Sam Altman resignation closed

Non-profit remains core

According to OpenAI, there will be no sweeping changes. In response to questions from Reuters, it said: “We remain focused on building AI that benefits everyone. The nonprofit organization is the core of our mission and will remain.”

Plans would explore the structure of a for-profit benefit corporation. In the AI world, Anthropic and xAI have this type of structure.

The right choice?

The corporate structure at OpenAI was recently impacted by the voluntary resignation of co-founder Ilya Sutskever and criticized by former company employees. Former board member Helen Toner painted a negative picture of the work environment created by Altman and her relationship with the CEO. In Toner’s case, it is difficult to ascertain where the truth lies, but the unrelated dismissal of Sutskever shows that something is going on within the AI company’s corporate walls.

Also read: OpenAI board learned of ChatGPT launch through Twitter