Sam Altman Says OpenAI Could Become For-Profit

Facts

• The Information has reported that OpenAI Chief Executive Officer Sam Altman told shareholders that the artificial intelligence (AI) developer could change its governance structure to a for-profit corporation that its nonprofit board would no longer control.¹
• In addition, Altman has reportedly said that the transition could set the stage for an eventual initial public offering (IPO) for the for-profit company, which will be similar to rivals Anthropic and xAI.²
• Anthropic and xAI have filed as for-profit entities in Delaware and Nevada, respectively, which means that they consider societal benefits in addition to fiduciary duties to investors in their decision-making process.³
• Last week, Altman reportedly told the OpenAI staff in an all-hands meeting that the company behind the ChatGPT chatbot is on track to double its annualized revenue to $3.4B in 2024.⁴
• Founded as a nonprofit in 2015 with the stated purpose of building 'safe and beneficial artificial general intelligence for the benefit of humanity,' OpenAI announced a new 'capped profit' arm in 2019 to increase its resources.⁵
• Earlier this year, OpenAI co-founder Elon Musk filed a lawsuit against Altman and the company, alleging they have breached the founding agreement to pursue AI research for the good of humanity rather than profit.⁶

Sources: ¹Reuters, ²The Information, ³Aibusiness, ⁴Bloomberg, ⁵Openai and ⁶Axios.

Narratives

• Narrative A, as provided by Vice. OpenAI was created as a nonprofit research organization committed to advancing digital intelligence for the good of humanity. Yet, the company has grown entirely unrecognizable. This report indicates a move to confirm what is already known — OpenAI is a for-profit organization.
• Narrative B, as provided by Forbes. Nonprofits sound more virtuous, but for-profit organizations can be more responsible due to their exposure to competitive pressures, as they must benefit customers and investors. That said, it's great news that OpenAI may be moving toward becoming a for-profit benefit corporation.

Predictions