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OpenAI Restructures as PBC to Raise Capital Amid Elon Musk Opposition

Dec 27, 2024, 01:16 PM

OpenAI, founded a decade ago as a nonprofit research organization, is evaluating a significant restructuring of its corporate structure to better support its mission of ensuring artificial general intelligence (AGI) benefits all of humanity. The company's board is considering transforming its existing for-profit arm into a Delaware Public Benefit Corporation (PBC), which would enable it to raise necessary capital "with conventional terms like others in this space." OpenAI acknowledged it needs "more capital than we’d imagined." The nonprofit would continue to exist, holding shares in the new PBC, and focus on charitable initiatives. This move aims to create one of the best-resourced nonprofits in history while operating a for-profit entity capable of sustaining the development of AGI. The restructuring would separate OpenAI's rapidly growing business operations from the nonprofit board currently overseeing it. The plan faces opposition from some parties, including Elon Musk.