OpenAI may pay its nonprofit arm ‘billions of dollars’ in conversion to for-profit

OpenAI’s transition away from a for-profit corporation that’s governed by a nonprofit board is well underway — and the nonprofit could be compensated royally for it.

That’s according to The New York Times, which reports that OpenAI is in discussions to pay the nonprofit billions of dollars for it to cede control. There’s pressure to get a deal done; reportedly, OpenAI must change its corporate structure within two years or the $6.6 billion the company recently raised will convert to debt.

“There’s a nonprofit and a for-profit in one corporate structure, and we’re thinking about how to reconfigure that,” OpenAI board chairman Bret Taylor said at Axios’ AI+ Summit in San Francisco on Tuesday.

OpenAI CEO Sam Altman founded OpenAI as a nonprofit in 2015 alongside several AI researchers and entrepreneurs. By 2018, struggling to raise enough capital to fuel their ambitions, some within the group agreed to a new corporate structure: a for-profit OpenAI able to take on investors while still answering to the nonprofit board.