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OpenAI, led by CEO Sam Altman, is in early discussions with California's attorney general to potentially transition into a for-profit entity. The change could attract new investors, marking a shift from OpenAI's original non-profit model established in 2015.
OpenAI's Strategic Shift Towards Profitability
OpenAI, which Sam Altman manages, is reportedly in preliminary discussions with the office of the California attorney general to modify its corporate structure in an effort to transform into a for-profit enterprise, according to a report published by Bloomberg News on Monday, which cited two individuals who are familiar with the situation.
Reuters' attempts for comment were not immediately met with a response from either OpenAI or a representative of the California Attorney General.
Potential Impact of Transitioning to a For-Profit Model
For the artificial intelligence pioneer, which was established in 2015 as a non-profit AI research lab, a transition to becoming a for-profit firm would represent a significant reversal in the governance structure of the organization. The change, on the other hand, would make the company more appealing to potential investors.
In September, Reuters was the first to reveal that Microsoft-backed organization opens a new tab. OpenAI was in the process of formulating a strategy to transform its primary business into a for-profit benefit corporation that would no longer be monitored by its non-profit board of directors.
OpenAI's Non-Profit Arm to Retain Stake
The non-profit organization known as OpenAI will continue to operate and will own a minority stake in the company that is for profit, according to people who spoke to Reuters.
OpenAI's Valuation Surges Amid Latest Funding
A funding round of $6.6 billion was successfully completed by the ChatGPT manufacturer late last month. This round of funding has the potential to value the firm at $157 billion, thereby solidifying its place as one of the most valuable private corporations in the world.
