OpenAI "Transforms into existing for-profit subsidiaries, profit-seeking public interest corporations"

ChatGPT developer OpenAI is considering converting its existing for-profit subsidiary under the control of its non-profit board into a "public interest corporation with ordinary shares."

OpenAI has said it will push for a corporate restructuring next year in line with the need to attract more investment to develop artificial intelligence (AGI) beyond human intelligence.

OpenAI was established as a non-profit organization in 2015 with the goal of building safe and beneficial AI for mankind.

However, four years later, in 2019, it established a for-profit subsidiary to cover the cost of developing AI models and changed its governance structure to a way controlled by non-profit boards.

In particular, the recent attraction of $66 billion worth of investments has increased corporate value to $157 billion and the need for corporate restructuring has been raised to maximize investors' returns.

The "public interest corporation" under consideration by OpenAI is a corporate structure with the goal of profit-seeking yet contributing to society, which is interpreted as a way to manage growth businesses and ease restrictions caused by non-profit parent companies.

"Once again, we need to raise more capital," OpenAI said, explaining that it needs traditional stock structures and less complex forms to be supported by investors.

"The non-profit sector still exists, and it will hold a significant stake in a public interest corporation," he said. "The value of the stake will be evaluated fairly by an independent financial expert."

The public interest corporation will then manage and control the operations and businesses of OpenAI, while the non-profit sector will employ leadership teams and staff for philanthropy in healthcare, education and science, it added.

AI start-ups Anthropic, which is seen as a rival to OpenAI, and AI company xAI, owned by Tesla Inc TSLA CEO Elon Musk, are similar structures, Reuters said.