OpenAI Considerations Shift to Public Benefit Corporation Structure
OpenAI’s board is reviewing a plan to transform the company’s business into a public benefit corporation (PBC), a structure that allows for profit generation while aiming to improve society. The proposed plan would see the nonprofit arm of the company hold shares in the PBC.
The announcement was made in a blog post on Friday, indicating that the board is ready to proceed with the restructuring. OpenAI has been discussing the potential change with regulators in California and Delaware.
The PBC would allow the company to operate a more simplified profit-making structure, which could appeal to investors. However, this move has raised questions about whether OpenAI is staying true to its original public mission.
Co-founder and early investor Elon Musk has filed a lawsuit against OpenAI, alleging that it violated an agreement to operate as a nonprofit. Musk is seeking to prevent OpenAI from transitioning to a profit-making business while his legal battle is ongoing.
OpenAI’s board believes that the proposed plan would ensure the long-term success of the PBC, allowing the nonprofit to raise funds and execute its mission more effectively. The plan would also enable the nonprofit to pursue charitable initiatives in areas such as healthcare, education, and science.
