OpenAI Backs Down on Restructuring Amid Pushback

OpenAI on Monday announced a proposed restructuring that would give its nonprofit arm ongoing control of ChatGPT and the rest of the startup’s AI products. The move is a reversal of an earlier announcement which called for the nonprofit to relinquish its authority to a newly created public-benefit corporation. The proposed company structure has to be approved by the attorney general offices in California and Delaware by early next year. Up to $30 billion in funding from SoftBank and other investors is contingent on this approval. That money is crucial for OpenAI to maintain its position as a leader in generative AI and give higher returns to investors. Previously, those returns were capped at 100 times the original investment. OpenAI was founded as a nonprofit research lab in 2015 to “benefit all of humanity.” But the idealistic setup quickly became untenable due to the fundraising needs associated with building advanced AI systems. The push to undo this structure received significan ... Read full article.