According to The Information, Sam Altman, the CEO of Open AI (IAT automobile technology), informed some shareholders that the company is considering adjusting its governance structure and becoming a for-profit company controlled by a non-profit board of directors. One potential direction is to establish a for-profit welfare company, which is also the route chosen by companies such as Anthropic and xAI. This move is expected to pave the way for OpenAI's IPO, while Altman also has the opportunity to buy into OpenAI. However, the restructuring discussions are not yet over, and Altman and other directors may ultimately finalize other different plans.

One of the potential directions is to establish a for-profit welfare company, a route also chosen by companies such as Anthropic and xAI.

This move is expected to pave the way for OpenAI's IPO, with the company currently valued at around $86 billion. At the same time, Altman also has the opportunity to invest in OpenAI.

However, the restructuring discussions are not yet over, and Altman and other directors may ultimately finalize other different plans.

Regarding this news, OpenAI replied that "we are still committed to creating artificial intelligence that benefits everyone. Non-profit organizations are at the core of our mission, and will continue to exist."

OpenAI has previously undergone a series of dramatic personnel changes, including Altman being dismissed by the board of directors and then quickly announcing his return to work.

At that time, economists Daron Acemoglu and Simon Johnson at MIT pointed out that despite resistance from the non-profit board of directors, Microsoft was still pushing hard for Altman to return to OpenAI. This suggests that OpenAI may now be primarily pursuing commercial success rather than broader social impact. In other words, OpenAI and Microsoft will prioritize profit rather than academic theory of AI.

One key difference between for-profit and non-profit organizations is that non-profit companies are legally protected, and minority shareholders cannot sue the company for making decisions that do not prioritize shareholder returns; for-profit organizations need to satisfy customers and investors, or else they will go bankrupt, which also helps to curb some of the management's capricious spending behaviors.

OpenAI's structure is extremely unique, consisting of a for-profit division that is fully owned and controlled by a non-profit parent company.

The previous "personnel drama" at OpenAI also highlighted the drawbacks of this mixed structure: the board of directors directly dismissed a popular founder due to an unspecified disagreement, a rare behavior in the management of profit-oriented entities.

When Altman founded the for-profit division of OpenAI, he did not hold any equity, and he hoped to limit the number of directors who held shares. After switching to the new structure, he may receive a "substantial" amount of equity. Some investors have expressed a preference for Altman to have equity, as it would allow him to focus more on OpenAI.

In addition, Microsoft executives who have been involved in collaboration with OpenAI for many years have always been inclined to transform OpenAI into a mature for-profit company. One executive said that the for-profit company structure could allow Microsoft to have a greater influence on OpenAI through board seats and shareholder voting rights.