From PC Mag: Facing lawsuits and regulatory scrutiny, OpenAI is backing off plans for a for-profit structure.
“We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware,” OpenAI CEO Sam Altman said in a letter to employees.
OpenAI was founded as a nonprofit in 2015, and in 2019, it restructured by establishing a “capped-profit” arm, which can (somewhat) limit the returns on profits for employees and investors, such as Microsoft. In return, OpenAI could attract more investment and pay leading data scientists bigger salaries.
The nonprofit side to OpenAI has continued to govern the company. But in December, the San Francisco lab announced its transition to an “enduring company” by becoming a Public Benefit Corporation that would run OpenAI’s operations and businesses. Meanwhile, the nonprofit side would merely “hire a leadership team and staff to pursue charitable initiatives in sectors such as health care, education, and science.”
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