"OpenAI's new public benefit corporation (PBC) structure allows unlimited profits for shareholders while still operating under a nonprofit parent, addressing investor demands."
"The transition from a capped-profit model reflects the shift in OpenAI's strategy, emphasizing the need for substantial funding to compete in the AI landscape."
OpenAI, initially founded as a nonprofit, has evolved in response to the discovery that scaling AI models yields better results. This led to the development of GPT-3 and significant investments from Microsoft and venture capitalists, positioning the company for profitability. The recent announcement to transition the for-profit arm into a public benefit corporation (PBC) reflects this shift, allowing investors unlimited earnings potential while retaining a nonprofit oversight. This decision, influenced by feedback from civic leaders and funding conditions, marks a significant change in OpenAI's corporate structure.
Read at Fast Company
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