OpenAI scraps controversial plan to become for-profit after mounting pressure
a year ago
- #Nonprofit
- #OpenAI
- #Restructuring
- OpenAI will remain under the control of its founding nonprofit board, reversing its plan to split off commercial operations.
- CEO Sam Altman cited discussions with civic leaders and attorneys general as influencing the decision.
- The original restructuring plan faced criticism from former employees and Elon Musk, who filed a lawsuit against OpenAI.
- A judge ruled that Musk adequately pled OpenAI breached an implied contract and unjustly retained benefits from his investments.
- OpenAI's initial restructuring plan aimed to create a for-profit benefit corporation, making it more attractive to investors.
- Altman would have received equity (around 7%) under the original plan, a departure from OpenAI's humanitarian mission.