OpenAI plans to adopt public benefit corporation structure to fend off hostile takeovers

OpenAI is pursuing a largely untested corporate structure to protect itself from hostile takeovers and shield CEO Sam Altman from outside interference. The artificial intelligence startup, which received $6.6 billion in new financing last week, is planning to reorganize as a Public Benefit Corporation. Multiple people familiar with the company's thinking said a key benefit of this PBC structure is that it has the potential to block unwanted takeovers or activist demands. This means existing investors, such as Microsoft or other parties, may be frustrated if they try to acquire OpenAI. OpenAI's PBC structure will be obligated to balance the best interests of shareholders, the public interest, and stakeholders such as employees and society. This approach of "multi-pronged fiduciary obligations" to the company will provide OpenAI with a "safe harbor" from activists who may claim that the company is not profitable enough, said one person familiar with the matter.