In September, the organization, under the leadership of Sam Altman and with a valuation of $157 billion, declared its strategic shift towards prioritizing profit generation. This decision marks a significant departure from its initial establishment nearly ten years ago as a non-profit research entity focused on the advancement of responsible and safe artificial intelligence.
The involvement of the California attorney general suggests that the company is progressing towards formalizing this significant change, which will necessitate the attorney general's approval.
A source informed Bloomberg that OpenAI plans to present its restructuring proposal to Attorney General Rob Bonta once the details are finalized.
Neither OpenAI nor the California attorney general's office provided immediate comments to Business Insider.
OpenAI clarified to Bloomberg that its nonprofit entity would continue to exist amid any future restructuring. Previous reports indicated that the nonprofit would hold a minority stake if the company transitions to a for-profit model.
"While we are actively consulting with independent financial and legal advisors, any potential restructuring will ensure the nonprofit remains viable and receives full value for its current stake in the OpenAI for-profit, thereby enhancing its ability to fulfill its mission," stated Bret Taylor, chairman of the OpenAI nonprofit board, to Bloomberg.
In 2019, OpenAI established a for-profit division to facilitate fundraising for its mission. Over the years, tensions have escalated between those advocating for a fully nonprofit structure and those eager to innovate and launch new products. This conflict reached a peak last November when the board temporarily removed OpenAI CEO Sam Altman.
One year later, many individuals who opposed Altman's strategy have departed from the company, and OpenAI has achieved unprecedented funding levels. In its latest funding round, the company raised an impressive $6.6 billion, positioning itself alongside several prominent publicly traded firms.
Transitioning to a for-profit model would align more closely with the interests of major investors that OpenAI is increasingly attracting, such as Microsoft and Nvidia.
According to Bloomberg, the transition from nonprofit to for-profit is expected to trigger a regulatory examination of how OpenAI assesses the value of its services, including the widely used ChatGPT model.
This transition will necessitate changes to OpenAI's structure in accordance with Delaware law, where many companies are incorporated, as well as modifications to its certificate of incorporation.