OpenAI, the organization behind ChatGPT, is preparing to transition from its current non-profit model to a more conventional for-profit structure. CEO and co-founder Sam Altman informed OpenAI employees that this change will take place sometime in 2025, as reported by Fortune.
Altman had previously acknowledged that OpenAI’s corporate structure is “unusual” but explained that this was intentional due to the unique nature of AI technology.
Founded in 2015 by a group including Sam Altman, Greg Brockman, Peter Thiel, and Elon Musk, OpenAI was initially established as a non-profit dedicated to advancing artificial intelligence. This non-profit entity, known as OpenAI Inc., oversees a holding company and an LLC named OpenAI GP.
In 2019, OpenAI established a capped-profit subsidiary, OpenAI Global LLC, to commercialize its AI technologies. This subsidiary has attracted significant investment from Microsoft, receiving billions of dollars in funding.
Reasons Behind OpenAI’s Current Restructuring
One reason for OpenAI’s restructuring is to attract investors. The company is reportedly aiming to raise funds with a valuation exceeding $100 billion. By aligning its structure with that of other major tech firms, OpenAI hopes to offer investors more predictable returns.
Additionally, since most employees are now focused on developing commercial AI products, the non-profit designation has become less relevant.
An OpenAI spokesperson stated, “We remain committed to creating AI that benefits everyone and are working with our board to ensure we are well-positioned to achieve our mission. The non-profit component remains central to our mission and will continue to be part of our structure.”
Why the Structural Change Was Anticipated
OpenAI’s shift to a full-fledged for-profit model is closely linked to CEO Sam Altman’s dramatic exit and subsequent return last year. Despite co-founding the company and being its prominent figure, Altman held minimal equity in the for-profit subsidiary, which reportedly made him vulnerable to a boardroom challenge.
In November 2023, four board members voted to oust Altman as CEO and remove him from the board, citing issues with his candor. This move prompted several top executives, including OpenAI President Greg Brockman, to leave in support of Altman. Altman eventually returned to OpenAI with backing from employees and its business partner, Microsoft.
