OpenAI, creator of ChatGPT, is moving to a for-profit business structure – National

OpenAI said Tuesday it has reorganized its ownership structure and converted its operations into a public utility company, paving the way for the ChatGPT maker to more easily profit from its artificial intelligence technology, even though it technically remains under the control of a nonprofit.

The company also said it has signed a new agreement with its longtime backer Microsoft, giving the software giant a roughly 27 percent stake in OpenAIs new for-profit venture, but changes some details of their close collaboration.

For over a year, OpenAI’s proposed changes to its corporate structure have captured the attention of regulators, competitors, and advocates concerned about the social impact of AI.

The attorneys general of Delaware, where OpenAI is founded, and California, where it is headquartered, had both said they were looking into the proposed changes. Neither office immediately responded to a request for comment Tuesday.

OpenAI said it has completed the restructuring “after nearly a year of constructive dialogue” with its offices in both states.

“OpenAI has completed its recapitalization, simplifying its corporate structure,” said a blog post Tuesday from Bret Taylor, chairman of OpenAI’s board of directors. “The nonprofit retains control of the for-profit organization and now has a direct route to key resources before AGI arrives.”

AGI stands for artificial general intelligence, which OpenAI defines as “highly autonomous systems that outperform humans at economically valuable work.” OpenAI was founded in 2015 as a non-profit organization with a mission to securely build AGI for the benefit of humanity.

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OpenAI had previously said its own board will decide when to reach AGI, effectively ending the Microsoft partnership. But it now says that “once AGI has been declared by OpenAI, that declaration will now be verified by an independent panel of experts,” and that Microsoft’s rights to OpenAI’s confidential research methods “will survive until the panel of experts verifies AGI or until 2030, whichever comes first.” Microsoft also retains some commercial rights to OpenAI products ‘post-AGI’.

Microsoft made the same announcement about the revised partnership on Tuesday, but declined further comment.

Going forward, the nonprofit will be called the OpenAI Foundation and Taylor said it would spend $25 billion on healthcare, curing diseases and protecting against the cybersecurity risks of AI. He did not say over what period these funds would be dispersed.

Robert Weissman, co-chairman of the nonprofit Public Citizen, said this arrangement does not guarantee the nonprofit’s independence, likening it to a corporate foundation that will serve the nonprofit’s interests.

Even though the nonprofit board can technically maintain control, Weissman said control is “an illusion because there is no evidence that the nonprofit ever imposes its values ​​on the for-profit organizations.”

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