Grapevine

Changing OpenAI's nonprofit structure would raise questions about its future

The artificial intelligence maker OpenAI may face a costly and inconvenient reckoning with its nonprofit origins even as its valuation recently exploded to $157 billion.

Nonprofit tax experts have been closely watching OpenAI, the maker of ChatGPT, since last November when its board ousted and rehired CEO Sam Altman. Now, some believe the company may have reached—or exceeded—the limits of its corporate structure, under which it is organized as a nonprofit whose mission is to develop artificial intelligence to benefit "all of humanity" but with for-profit subsidiaries under its control.

Jill Horwitz, a professor in law and medicine at UCLA School of Law who has studied OpenAI, said that when two sides of a joint venture between a nonprofit and a for-profit come into conflict, the charitable purpose must always win out.

"It's the job of the board first, and then the regulators and the court, to ensure that the promise that was made to the public to pursue the charitable interest is kept," she said.

Altman recently confirmed that OpenAI is considering a corporate restructure but did not offer any specifics. A source told The Associated Press, however, that the company is looking at the possibility of turning OpenAI into a public benefit corporation. No final decision has been made by the board and the timing of the shift hasn't been determined, the source said.