OpenAI Reshapes Business Model—No Profit Limits, Nonprofit Still in Charge

It is changing its business unit into a "public benefit company", which means it must balance making money with helping the public. The nonprofit side of OpenAI will still stay in charge.

This update has caused some disagreement with Microsoft, OpenAI’s largest investor. Microsoft, which has invested around $13.75 billion into the company, is waiting to fully understand the new setup before giving its approval, according to Bloomberg.

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Sam Altman, OpenAI’s CEO, explained the decision in a letter released on May 5. He said the change is necessary because expanding their services to everyone could cost hundreds of billions—and possibly trillions—of dollars in the future. Altman said:

We want to be able to operate and get resources in such a way that we can make our services broadly available to all of humanity.

The company’s restructuring also involves review from the attorneys general in California and Delaware. They will check if the nonprofit’s share in the new company is valued fairly.

Altman said OpenAI plans to keep working with government officials, Microsoft, and newly appointed nonprofit commissioners as the changes progress.

Recently, OpenAI filed a lawsuit against Elon Musk in the Northern District of California. What did it say? Read the full story.