Evolving OpenAI’s Structure

[Tyner]

This is a link post.

https://​​openai.com/​​index/​​evolving-our-structure/​​

The OpenAI Board has an updated plan for evolving OpenAI’s structure.

• OpenAI was founded as a nonprofit, and is today overseen and controlled by that nonprofit. Going forward, it will continue to be overseen and controlled by that nonprofit.

• Our for-profit LLC, which has been under the nonprofit since 2019, will transition to a Public Benefit Corporation (PBC)–a purpose-driven company structure that has to consider the interests of both shareholders and the mission.

• The nonprofit will control and also be a large shareholder of the PBC, giving the nonprofit better resources to support many benefits.

• Our mission remains the same, and the PBC will have the same mission.

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. We thank both offices and we look forward to continuing these important conversations to make sure OpenAI can continue to effectively pursue its mission of ensuring AGI benefits all of humanity. Sam wrote the letter below to our employees and stakeholders about why we are so excited for this new direction.—Bret Taylor

[Yarrow🔸]

Sam wrote the letter below to our employees and stakeholders about why we are so excited for this new direction.

God. Sam Altman didn’t get to do what he wanted, and now we’re supposed to believe he’s “excited”? This corporate spin is driving me crazy!

But, that aside, I’m glad OpenAI has backed down, possibly because the Attorney General of Delaware or California, or both of them, told OpenAI they would block Sam’s attempt to break the OpenAI company free from the non-profit’s control.

It seems more likely to me that OpenAI gave up because they had to give up, although this blog post is trying to spin it as if they changed their minds (which I doubt really happened).

Truly a brash move to try to betray the non-profit.

Once again Sam is throwing out gigantic numbers for the amounts of capital he theoretically wants to raise:

We want to be able to operate and get resources in such a way that we can make our services broadly available to all of humanity, which currently requires hundreds of billions of dollars and may eventually require trillions of dollars.

I wonder if his reasoning is that everyone in the world will use ChatGPT, so he multiplies the hardware cost of running one instance of GPT-5 by the world population (8.2 billion), and then adjusts down for utilization. (People gotta sleep and can’t use ChatGPT all day! Although maybe they’ll run deep research overnight.)

Looks like the lede was buried:

Instead of our current complex capped-profit structure—which made sense when it looked like there might be one dominant AGI effort but doesn’t in a world of many great AGI companies—we are moving to a normal capital structure where everyone has stock. This is not a sale, but a change of structure to something simpler.

The nonprofit will continue to control the PBC, and will become a big shareholder in the PBC, in an amount supported by independent financial advisors, giving the nonprofit resources to support programs so AI can benefit many different communities, consistent with the mission.

At first, I thought this meant the non-profit will go from owning 51% of the company (or whatever it is) to a much smaller percentage. But I tried to confirm this and found an article that claims the OpenAI non-profit only owns 2% of the OpenAI company. I don’t know whether that’s true. I can’t find clear information on the size of the non-profit’s ownership stake.