SAN FRANCISCO: OpenAI CEO Sam Altman announced Monday that the company behind ChatGPT will continue to be run as a nonprofit, abandoning a contested plan to convert into a for-profit organization.
\nThe structural issue had become a significant point of contention for the artificial intelligence (AI) pioneer, with major investors pushing for the change to better secure their returns.
\nAI safety advocates had expressed concerns about pursuing substantial profits from such powerful technology without the oversight of a nonprofit board of directors acting in society\u2019s interest rather than for shareholder profits.
\n\u201cOpenAI is not a normal company and never will be,\u201d Altman wrote in an email to staff posted on the company\u2019s website.
\n\u201cWe made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware,\u201d he added.
\nOpenAI was founded as a nonprofit in 2015 and later created a \u201ccapped\u201d for-profit entity allowing limited profit-making to attract investors, with cloud computing giant Microsoft becoming the largest early backer.
\nThis arrangement nearly collapsed in 2023 when the board unexpectedly fired Altman. Staff revolted, leading to Altman\u2019s reinstatement while those responsible for his dismissal departed.
\nAlarmed by the instability, investors demanded OpenAI transition to a more traditional for-profit structure within two years.
\nUnder its initial reform plan revealed last year, OpenAI would have become an outright for-profit public benefit corporation (PBC), reassuring investors considering the tens of billions of dollars necessary to fulfill the company\u2019s ambitions.
\nAny status change, however, requires approval from state governments in California and Delaware, where the company is headquartered and registered, respectively.
\nThe plan faced strong criticism from AI safety activists and co-founder Elon Musk, who sued the company he left in 2018, claiming the proposal violated its founding philosophy.
\nIn the revised plan, OpenAI\u2019s money-making arm will now be fully open to generate profits but, crucially, will remain under the nonprofit board\u2019s supervision.
\n\u201cWe believe this sets us up to continue to make rapid, safe progress and to put great AI in the hands of everyone,\u201d Altman said.
\nOpenAI\u2019s major investors will likely have a say in this proposal, with Japanese investment giant SoftBank having made the change to being a for-profit a condition for their massive $30 billion investment announced on March 31.
\nIn an official document, SoftBank stated its total investment could be reduced to $20 billion if OpenAI does not restructure into a for-profit entity by year-end.
\nThe substantial cash injections are needed to cover OpenAI\u2019s colossal computing requirements to build increasingly energy-intensive and complex AI models.
\nThe company\u2019s original vision did not contemplate \u201cthe needs for hundreds of billions of dollars of compute to train models and serve users,\u201d Altman said.
\nSoftBank\u2019s contribution in March represented the majority of the $40 billion raised in a funding round that valued the ChatGPT maker at $300 billion, marking the largest capital-raising event ever for a startup.
\nThe company, led by Altman, has become one of Silicon Valley\u2019s most successful startups, propelled to prominence in 2022 with the release of ChatGPT, its generative AI chatbot.<\/p>\n","protected":false},"excerpt":{"rendered":"
SAN FRANCISCO: OpenAI CEO Sam Altman announced Monday that the company behind ChatGPT will continue to be run as a nonprofit, abandoning a contested plan to convert into a for-profit organization. The structural issue had become a significant point of contention for the artificial intelligence (AI) pioneer, with major investors pushing for the change to …<\/p>\n","protected":false},"author":4,"featured_media":80671,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-80660","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-world"],"_links":{"self":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/80660","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/comments?post=80660"}],"version-history":[{"count":1,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/80660\/revisions"}],"predecessor-version":[{"id":80673,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/80660\/revisions\/80673"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/media\/80671"}],"wp:attachment":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/media?parent=80660"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/categories?post=80660"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/tags?post=80660"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}