OpenAI Considers Corporate Structure Change Amid $100 Billion Valuation Plans

According to Cointelegraph, OpenAI is reportedly contemplating a shift in its corporate structure to become more appealing to investors. This development comes as the company plans another funding round, aiming for a valuation exceeding $100 billion. A report from the Financial Times indicates that the artificial intelligence firm is engaged in discussions both internally and with potential investors about modifying its current 'capped for-profit' structure. Unnamed sources suggest these talks focus on removing profit caps to allow investors full access to profits earned against their shares. This strategic move aligns with the company's anticipated funding round, which is expected to be led by Thrive Capital with an investment of approximately $1 billion. Microsoft, Apple, and Nvidia are also mentioned as potential investors. Currently, Microsoft holds a minority stake in OpenAI. However, it remains uncertain how a new valuation and the involvement of other major tech companies like Nvidia and Apple would impact the overall dynamics. Under the existing structure, OpenAI operates as both a non-profit organization and a capped for-profit company. The board of directors oversees both operations, with the primary objective of maintaining the nonprofit's mission. Investors, including Microsoft, who have invested in the capped for-profit side of OpenAI, can only earn a limited yield on any profits generated due to the capped nature of its structure. By removing these caps, OpenAI aims to incentivize investors with payouts limited only by the company's ability to generate profits. It remains unclear how this potential change will affect OpenAI's non-profit division or whether board members will be able to assure both investors and stakeholders that the company can generate profits without compromising its mission to prioritize service to humanity over profit generation.