Gen AI Darling, OpenAI, officially unveiling their plans to change the company's structure.

But it may not be as easy as they hope.

Kate Rooney has the latest for us in today's tech check segment.

Kate.

Hi, Sarah.

Yeah.

So this is the first time Open AI has laid out these plans confirming what we have reported

Open AI is becoming, or its for-profit arm rather, is going to become a public benefit corporation. But

this transition has been anything but smooth so far. It does highlight an increasingly

competitive landscape for Open AI compared to when it was founded about a decade ago. PBCs,

as they're also known, have become the corporate structure de jour right now for AI startups. They

are essentially the same as any for-profit business, but with a dual mandate.

They've got the money-making, fiduciary duty on one side with this publicly stated mission they need to have.

You've got Ben & Jerry's, Patagonia, those are the really well-known examples, plus XAI and Anthropic.

Open-eye acknowledging a cash crunch behind this decision saying,

quote, we once again need to raise more capital than we'd imagined and that in part investors

need conventional equity and less structural bespokeness. That bespoke structure has been a headache

at times for OpenAI. That was really on display when CEO Sam Altman was ousted by the nonprofit board about a year ago. And it can be confusing, guys. It does involve a capped profit company that's controlled by the nonprofit, which will still exist. It's going to pursue charitable initiatives. And this wasn't a setup that investors love, as you can imagine. Those

I'm talking to are relieved about the pivot. They say it makes it a lot easier for this company

to go public at some point. I am told the IPO is not going to happen anytime soon. OpenAI

is deeply unprofitable. We did confirm earlier in the year. They're expecting to lose about

$5 billion on $3.7 billion in revenue this year.

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