OpenAI recently finished a recapitalisation plan which would see the company split up by placing its AI laboratory into a for-profit corporation within its non-profit foundation.
The non-profit entity is now named the OpenAI Foundation and retains control over the for-profit arm which was restructured as OpenAI Group, a public benefit corporation, chair Bret Taylor explained in a blog.
OpenAI Foundation holds an equity stake in the for-profit company currently valued at approximately $130 billion.
The recapitalisation also grants the Foundation additional ownership if the for-profit reaches a valuation milestone.
Taylor noted the structure ensures the value of the non-profit’s stake increases in-line with the commercial success of OpenAI.
The non-profit side would then use the rising value to fund its philanthropic work.
“We believe that the world’s most powerful technology must be developed in a way that reflects the world’s collective interests,” Taylor explained. “The close of our recapitalisation gives us the ability to keep pushing the frontier of AI and an updated corporate structure to ensure progress serves everyone”.
As part of the new structure, the Foundation will own 26 per cent of the for-profit entity, with a warrant allowing it to receive additional shares if OpenAI hits a valuation milestone.
Early investor Microsoft holds around 27 per cent of the for-profit, with the remaining 47 per cent held by current and former employees, and investors.
In its own blog, Microsoft explained the deal extends its IP rights to OpenAI models until 2032.
OpenAI faced fierce criticism from investor and co-founder Elon Musk and others over its plan to convert to a for-profit model.
Source: Mobile World Live
Image Credit: OpenAI