OpenAI said to consider changing structure to make it more investor friendly: report
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Contributor since / Followers
Contributor since / Followers
2 months ago
Robert Way
- OpenAI, the generative artificial intelligence startup backed by Microsoft (NASDAQ:MSFT), has been considering altering its structure to make it more friendly to investors, the Financial Times reported, citing sources familiar with the matter.
- The company is currently set up in a complex structure that has both non-profit and for-profit subsidiaries. One option under discussion would be to remove the cap on profits for investors in the for-profit subsidiary, the news outlet added. OpenAI’s board of directors, which are part of its non-profit subsidiary, oversees its for-profit subsidiary.
- Elon Musk, who co-founded OpenAI years ago and is suing the company for putting profit over humanity, weighed in on the news. “Either turning a non-profit into a for-profit is legal and everyone should be doing it or it’s illegal and OpenAI is a house of cards,” Musk wrote on X, formerly known as Twitter.
- OpenAI is currently in discussions to raise a new round of funding that would value the company at more than $100B and would come after Chief Executive Officer Sam Altman disclosed to Axios that its ChatGPT service has more than 200M weekly active users.
- The funding round would be led by venture capital firm Thrive Capital, while existing investor Microsoft is also likely to participate in the round. Microsoft has invested multiple billions of dollars in OpenAI. Apple (AAPL) and Nvidia (NVDA), which have partnerships with OpenAI, may also participate in the deal.
- OpenAI did not immediately respond to a request for comment from Seeking Alpha.