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Sam Altman and OpenAI abandons for-profit plans
By: coinfea|2025/05/06 19:45:01
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Sam Altman and OpenAI have dumped plans to transition into for-profit, with the company choosing to remain under its original non-profit parent. The decision comes after the firm faced a plethora of public backlash, including legal threats, which came from its former co-founder, Elon Musk, who has become a big critic of the company.The decision means that investors will be able to earn more than what they were initially promised, with the non-profit board remaining in charge of all the company’s activities. The company also said its current for-profit subsidiary will be turned into a public benefit corporation. That structure removes the existing limit on how much money investors can make, but the non-profit will still hold the power.Sam Altman and OpenAI to remain under non-profit parentAccording to OpenAI and Sam Altman, the change would have allowed the company to raise money at high valuations without actually giving away control of the firm. The numbers also do not lie, with the last round having the company sitting on a $260 billion valuation. The shift follows serious pressure from inside and outside the AI world. Elon’s lawsuit wasn’t the only one throwing punches. Former staff and members of the AI research community said that turning the company into a pure profit machine would trash its original mission.That mission, built into its foundation documents, is simple: build artificial intelligence that helps people. The problem, they argued, was that without the non-profit calling the shots, investors and execs would only care about making money. On Monday, Sam Altman, who leads OpenAI, claimed none of the outside pressure mattered. “We’re all obsessed with our mission. You’re all obsessed with Elon,” he said. But that didn’t stop the company from quietly working behind the scenes with state attorneys-general in Delaware and California.That is where the company is based. Both offices wanted guarantees that the non-profit would remain in charge and that any future changes would not remove assets from the non-profit to the profit side. The company also had to assure its biggest investor, Microsoft, that the new structure wouldn’t mess with its rights. And even though the new setup removes the cap on investor returns, it keeps the non-profit board in full control.Chairman of the board, Brett Taylor, mentioned that the company decided on the change after several legal consultations and discussions with public leaders. “We decided for the non-profit to retain control of OpenAI after hearing from civic leaders and engaging in constructive dialogue with the offices of the attorney-general of Delaware and the attorney-general of California,” he said.The post Sam Altman and OpenAI abandons for-profit plans first appeared on Coinfea.
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