Previously, OpenAI was teetering on the brink of bankruptcy, forecasted to incur a staggering $5 billion loss within a year. Yet, crucial investors like SoftBank, Microsoft, and NVIDIA managed to secure $6.6 billion through a funding round, dramatically increasing the market value of the company behind ChatGPT to an impressive $157 billion.
It appears that the investors’ funding round put pressure on the company to change its business structure, either to a Public Benefit Corporation (PBC) or risk returning the funds raised over the next two years. Interestingly, OpenAI is reportedly considering becoming a for-profit entity, according to Financial Times. However, this transition seems to have slowed down as ChatGPT’s creator grapples with defining Microsoft’s stake in the potential PBC.
If OpenAI transitions into a for-profit organization, it’s planned to divide into two entities. One of these entities will serve as its original mission carrier – promoting the use of artificial general intelligence systems for human benefit. This entity, with a stake in the new Public Benefit Corporation (PBC), will also continue as a charitable organization. According to The Financial Times, OpenAI intends to estimate the value of this charitable division at approximately $30 billion.
Based on reliable insider reports, it appears that OpenAI is finding it challenging to decide on the amount of stake Microsoft will receive within the PBC. This predicament may also involve figuring out the equity allocation for OpenAI’s CEO, Sam Altman, in the upcoming corporation.
OpenAI’s transformation into a profit-focused entity has faced numerous challenges. Last year, one of the initial co-founders of OpenAI, Elon Musk (who also serves as CEO of Tesla), filed two lawsuits against the company and Sam Alam. The lawsuits accused OpenAI of deviating significantly from its original purpose, specifically by engaging in underhanded practices such as racketeering activities, which were seen as a breach of trust and betrayal of its founding mission.
Musk’s attorney asserts that the earlier case was insufficiently strong; this new lawsuit is significantly stronger in its assertions. The suit outlines how Altman and Brockman allegedly deceived Musk into co-founding the company by making promises of a more ethical, transparent path compared to profit-driven tech companies.
Market analysts and experts anticipate that Microsoft could potentially purchase OpenAI within the coming three years. This prediction suggests a possible change in investor interest away from AI, making it challenging for startups to secure funding for their innovative projects in this field, as the experts noted.
If OpenAI doesn’t abide by the investor agreement to transform into a money-making company, it might face external meddling or unwanted acquisitions. This risk arose after the AI company unveiled their $500 billion Stargate initiative, aiming to reduce its dependency on Microsoft for cloud computing resources essential for its cutting-edge AI developments.
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2025-01-24 21:09