The Pivot to Profit for Open AI.

From American Public Media, this is Marketplace Tech.

I'm Megan McCarty Carrino.

A battle is brewing over the restructuring of Open AI, the maker of ChatGPT.

It was founded as a non-profit in 2015 with the goal of developing artificial intelligence

to benefit humanity, not investors. But advanced AI requires advanced processing power, which gets expensive,

leading the company to take on major investors and recently announced a plan to transition

into a for-profit public benefit corporation. That plan has drawn objections from the likes of

Elon Musk, MEDA, and Robert Weissman,

co-president of Consumer Advocacy Group Public Citizen, which urged California to ensure Open AIs restructuring

will sufficiently repay its nonprofit benefits.

Being a nonprofit enabled them to accept donations, and that was the model for the

nonprofit, just like it's the model for other nonprofits. They had donated cash and in-kind donations

of computational power to do their work to develop this new technology. They didn't have to

pretend that they were going to be able to return

investment to people. They were asking them to do it on a charitable basis, and they were able

to raise a significant amount of money and resources through that approach.

So I understand in 2019, OpenAI kind of transitioned to a different structure so that it

could take money from investors

like Microsoft. But the business, the capped profit business, has still been governed ostensibly

by the nonprofit. Now it is looking to transition into a for-profit public benefit corporation, what does the law say about

what is required to make this kind of pivot? Well, this is a very, very unusual thing. And exactly

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