OpenAI plays into Elon Musk’s hands, ditching for-profit plan — but Sam Altman doesn’t have Microsoft’s blessing yet

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For several months now, OpenAI has been making efforts to transition into a financially profitable organization, particularly following the successful $40 billion fundraising round that significantly increased its market value to approximately $300 billion.

Besides the influence of investors, OpenAI aimed to transition into a profit-driven organization to minimize outside interference and potential hostile takeovers. Notably, financial analysts and industry experts speculate that Microsoft might acquire OpenAI within the next three years. This is due to waning investor interest in the field, leading them to redirect their investments elsewhere.

Recently, I found myself taken aback when OpenAI CEO Sam Altman publicly revealed that the non-profit aspect of our beloved organization will maintain its grip on the for-profit side.

After consulting with civic leaders and holding productive discussions with the offices of the Attorneys General in Delaware and California, we opted to keep management of OpenAI within the nonprofit organization.

The wealthy head of Tesla, Elon Musk, has taken legal action against OpenAI and Sam Altman, claiming they’ve breached their original purpose and are possibly engaged in illegal activities like racketeering.

Although the judge didn’t grant Elon Musk’s petition to halt OpenAI’s transformation into a profit-driven company, some aspects of the legal case continued.

Simultaneously, a billionaire put forward an unexpected proposition to purchase the company behind ChatGPT for a staggering $97.4 billion. Yet, this offer was declined. Subsequently, Sam Altman clarified that OpenAI and its objectives were not up for grabs.

Initially established as a non-profit research organization dedicated to creating safe artificial intelligence, OpenAI underwent a transformation in 2019 by changing its business structure to a capped-profit model. In this new setup, the AI lab introduced a profitable division aimed at generating funds for their ongoing advancements.

Previously, CEO Sam Altman acknowledged that changing OpenAI from a non-profit organization to a for-profit one would allow the company to secure substantial funds necessary for its progress, which could amount to trillions. Scaling such great heights financially would be challenging while continuing as a non-profit entity.

According to Sam Altman:

Instead of the existing intricate profit-sharing system that was suitable for what appeared to be a single major Artificial General Intelligence (AGI) endeavor, but no longer fits in a landscape of numerous prominent AGI companies, we are transitioning to a standard capital structure, where everyone owns stock. This is not about selling off parts of the company, but rather adopting a more streamlined organizational structure.

In my observation, as OpenAI continues to develop its structure, Altman expresses his aspirations for the AI lab. Specifically, he aims to accomplish remarkable feats such as:

  • We want to be able to operate and get resources in such a way that we can make our services broadly available to all of humanity, which currently requires hundreds of billions of dollars and may eventually require trillions of dollars. We believe this is the best way for us to fulfill our mission and to get people to create massive benefits for each other with these new tools.
  • We want our nonprofit to be the largest and most effective nonprofit in history that will be focused on using AI to enable the highest-leverage outcomes for people.
  • We want to deliver beneficial AGI. This includes contributing to the shape of safety and alignment; we are proud of our track record with the systems we have launched, the alignment research we have done, processes like red teaming, and transparency into model behavior with innovations like the model spec. AI accelerates, our commitment to safety grows stronger. We want to make sure democratic AI wins over authoritarian AI.

Microsoft has yet to sign off on OpenAI

It appears that Microsoft is currently OpenAI’s biggest investor, holding a significant stake worth approximately $13.5 billion. According to reports from Bloomberg, sources close to both OpenAI and Microsoft suggest that Microsoft has not yet agreed to the restructuring of OpenAI’s profit-driven division into a public benefit corporation.

According to the report, Microsoft aims to guarantee that the reorganization doesn’t harm their investment. Moreover, Microsoft is discussing the conditions of OpenAI’s restructure, specifically focusing on its ownership share.

Although OpenAI shifted its focus from its original non-profit stance to a for-profit organization, Elon Musk, CEO of Tesla, remains dissatisfied. Marc Toberoff, Musk’s lawyer, suggested that OpenAI’s reorganization does not resolve the legal issues Musk had raised against the company behind ChatGPT (as reported by Reuters).

The attorney added that despite OpenAI’s restructuring, it continues to breach its original purpose, particularly if they persist in creating proprietary AI for exclusive use. Toberoff asserted that OpenAI’s shift to a public benefit corporation is merely an attempt to disguise the issue and doesn’t resolve the significant concerns raised by Musk: “It makes no difference.

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2025-05-07 13:18