OpenAI abandons plan to be controlled by for-profit board

OpenAI has given up on its plan to no longer be controlled by a nonprofit.
In a company blog post published on Monday, chairman Bret Taylor said that OpenAI is abandoning the effort after “hearing from civic leaders and engaging in constructive dialogue with the offices of the Attorney General of Delaware and the Attorney General of California.” Both attorneys general have oversight of OpenAI’s nonprofit status and could have blocked its planned restructuring, which Elon Musk, Meta, and others have protested.
Now, OpenAI’s nonprofit board (the same one that briefly fired CEO Sam Altman) will continue to oversee its commercial subsidiary, which is being changed from a capped, for-profit LLC to a public benefit corporation (PBC) like Anthropic and xAI. Previously, investors in OpenAI’s commercial entity could make up to a 100x return before the rest of its future profits flowed back to the nonprofit.
With the new PBC structure, OpenAI spokesperson Steve Sharpe tells me that investors and employees will own regular stock with no cap on how much it can appreciate. The goal, he says, is to make it easier for OpenAI to raise more money in the future. The billions of dollars the comp …
Read the full story at The Verge.