The discussions are happening as the company adds a former NSA director to its board.
Artificial intelligence (AI) company OpenAI is reportedly exploring a shift from its current capped-profit model to a full for-profit structure.
First reported by The Information, CEO and co-founder Sam Altman allegedly informed shareholders of the potential change during the week of June 10. If implemented, this shift could lead to OpenAI’s non-profit board losing control over the company.
OpenAI is currently valued at approximately $86 billion. The company’s existing structure is described as “a partnership between our original nonprofit and a new capped-profit arm” on its website.
This “capped profit” model was initially adopted to incentivize research into artificial general intelligence (AGI) while staying true to the company’s mission. OpenAI explained that traditional donations were insufficient to fund its ambitious projects, necessitating a new model to attract investment.
However, OpenAI’s website still cautions stakeholders to view their investments as high-risk, akin to donations:
“Investing in OpenAI Global, LLC, is a high-risk investment. Investors could lose their capital contribution and not see any return. It would be wise to view any investment in OpenAI Global, LLC in the spirit of a donation, with the understanding that it may be difficult to know what role money will play in a post-AGI world.”
This potential restructuring is happening as CEO Sam Altman has reconfigured the board to include himself and several new, handpicked members. These new additions are Sue Desmond-Hellmann, former CEO of the Bill and Melinda Gates Foundation; Nicole Seligman, former VP of Sony; and Fidji Simo, CEO and chair of Instacart.
Recently, retired U.S. Army General and former National Security Agency (NSA) Director Paul Nakasone was also added to the board.
Nakasone’s appointment prompted a strong reaction from former U.S. intelligence contractor Edward Snowden. Snowden, posting on social media platform X, cautioned the public against trusting OpenAI or its products, specifically mentioning ChatGPT. He implied that appointing an NSA Director to the board was a “willful, calculated betrayal of the rights of every person on Earth,” concluding with a stark warning: “You have been warned.”
Summary Review: As OpenAI considers transitioning to a for-profit model, it faces significant scrutiny and debate. The company’s future direction could fundamentally change how it operates and how it is perceived by the public, especially given the recent controversial board appointments. This shift, if realized, will be closely watched by stakeholders and the broader AI community.
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