OpenAI's New Public Benefit Corporation

This is a OpenAI news story, published by Engadget, that relates primarily to Elon Musk's news.

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Public benefit corporations

Engadget

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Technology

Why OpenAI is trying to untangle its 'bespoke' corporate structure

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OpenAI announced plans to reorganize its for-profit arm into a public benefit corporation ( PBC ) Public benefit corporations are a relatively recent addition to the universe of business entity types.

PBCs came out of a certification program created by a nonprofit called B Lab .

Source within the company said a PBC structure would give OpenAI a "safe harbor" if a rival firm were to buy the company.

OpenAI has said it needs to raise more capital and that its current structure is holding it back.

In 2019 , OpenAI its for-profit arm organized the company using a unique "capped-profit" structure.

The company is now arguing that a PBC structure would "enable us to raise the necessary capital with conventional terms like others in this space".

There are rules that allow nonprofits to modify their purpose if their original one is made defunct, but those won't apply to OpenAI since we're not living in a world with safe (or any) AGI.

Elon Musk's recent bid to buy the nonprofit's assets complicates OpenAI 's plan.

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