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EDMONTON, CANADA - APRIL 20: An image of a woman holding a cell phone in front of a OpenAI logo displayed on a computer screen, on April 20, 2024, in Edmonton, Canada.
OpenAI’s nonprofit days are behind it
Big changes are coming to OpenAI.
The company behind ChatGPT started as a nonprofit research lab, but its success has led to an identity crisis of late. Does it want to make money or serve a purpose beyond its bottom line?
Until now, the answer was seemingly the latter. But following a series of top executive exits — including chief technology officer Mira Murati — OpenAI is preparing to become a completely for-profit company. That change also coincides with the startup’s plans to raise more money to reach a target valuation of $150 billion.
Sam Altman, the co-founder and CEO who was booted from OpenAI by its nonprofit board of directors in 2023, regained control of the company after OpenAI employees revolted and lead investor Microsoft expressed discontent. The nonprofit board largely resigned afterward and was replaced with one friendlier to Altman. It now looks like Atlman’s reign will be as firm as ever. The executive denied reports that he’s set to receive a 7% stake in OpenAI, worth upwards of $10 billion, but the switch to for-profit might mean less beating around the bush about its money-making ambitions.
OpenAI has been running a for-profit arm since 2019 so it could get billions in investment from venture capitalists and tech investors, who reportedly prefer if OpenAI is a public-benefit corporation, a type of for-profit with a social mission, rather than a nonprofit. Now, it’s seemingly taking that decision to its natural conclusion, putting its focus on creating a sustainable business ahead of its lofty societal promises about protecting humanity from AI.