OpenAI Restructuring

Almost two weeks ago, Lloyd mentioned on the blog that OpenAI had announced its new structure, with the nonprofit owning a controlling share of the benefit corporation that would actually develop ChatGPT (and its successors).

A couple days after his post, OpenAI announced that it had completed its recapitalization. Because I’ve already done one nonprofit AI post this week, I figured I could close the loop on OpenAI too.

The for-profit arm of OpenAI has become a public benefit corporation named OpenAI Group PBC. The nonprofit OpenAI, now called OpenAI Foundation, has a $130 billion stake in OpenAI Group PBC, representing about 26% of the shares of the for-profit. Current and former employees and other investors hold 47% of the for-profit, and Microsoft is sitting on a 27% stake, worth about $135 billion.

OpenAI and Microsoft released a joint statement describing what the change means. Interestingly, the MSNBC story says that OpenAI Foundation retains a controlling stake in OpenAI Group PBC. But given that Microsoft has one percentage point more equity than OpenAI Foundation, and given that the joint statement doesn’t discuss the allocation of control, I’m not really sure why that is. Maybe OpenAI Foundation has supervoting shares? Maybe it’s counting on employees to vote with it? Maybe there’s language in the actual MOU that didn’t make it into the joint statement?

But anyway, OpenAI’s transformation from nonprofit to for-profit, while bumpy in places, is now apparently complete.

Photo by Levart_Photographer on Unsplash