(Bloomberg) — OpenAI is moving forward with plans to become a more conventional for-profit business, but with a key change designed to appease critics: After the restructuring is completed, the company’s nonprofit will remain in control of the overall business.
The change in plans reflects the complexity of OpenAI’s ongoing corporate restructuring plans, which drew scrutiny from former employees, academics and rivals, some of whom had urged state regulators in Delaware and California to block the move.
“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,” OpenAI board chairman Bret Taylor said in a statement Monday. “We thank both offices and we look forward to continuing these important conversations.”
The ChatGPT maker was founded a decade ago as a nonprofit with a mission to build artificial intelligence that benefits humanity. Four years later, OpenAI created a for-profit subsidiary to help fund the high costs of AI development. In December, OpenAI said it was evaluating a plan to turn its business into a public benefit corporation while retaining a nonprofit arm that would own shares in the for-profit entity but no longer control it.
A simplified for-profit structure is considered more attractive to investors. As part of OpenAI’s massive new $40 billion funding round, OpenAI also has a strong incentive to finalize the corporate shift quickly. If its restructuring isn’t completed by the end of the year, lead investor SoftBank Group Corp. would have the option to reduce its total contribution to $20 billion from $30 billion, and OpenAI could seek additional investors to add to that sum, Bloomberg News previously reported.
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