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On Thursday, OpenAI announced that the company will remain under the control of its nonprofit parent organization, which holds an equity stake valued at over $100 billion. The artificial intelligence startup, which just became worth $500 billion through a secondary sale of shares, affirmed that such an arrangement reinforces its future organization.
OpenAI Chairman Bret Taylor stated that the nonprofit would be transformed into one of the most well-established Charitable organizations in the world. Nonprofit ownership is projected to provide continued oversight and also assist OpenAI in attracting future investment.
OpenAI also announced that it signed a non-binding memorandum of understanding with Microsoft to establish the subsequent phase of their collaboration. Since 2019, Microsoft has invested more than $13 billion in OpenAI and continues to be a vital partner in the cloud. Both groups stated that they are attempting to reach a final agreement that focuses on the provision of safe and efficient AI tools.
Over the past few months, civic leaders and former employees have questioned OpenAI about its governance. In May, the company announced that the nonprofit would continue to maintain control despite the shift in business, which resulted in the company becoming a public benefit corporation. According to OpenAI, it is working with the Attorneys General of California and Delaware to make its structure official.
In addition to the structural announcement, OpenAI announced that its nonprofit is now receiving applications to a $50 million grant program. The program aims to support nonprofit and community-driven organizations focused on AI literacy, economic opportunity, and community-driven innovation.
There are still legal issues with OpenAI. Elon Musk, the other co-founder, has also sued to ensure the company does not transform into a profit-making entity. Now the leader of his own AI company, xAI, Musk has criticized the governance of OpenAI as it grows to become one of the fastest-expanding companies in the field.
OpenAI was established in 2015 as a nonprofit research lab but has since become a significant force in generative AI. The model of its governance has recently merged commercial development and nonprofit management, as it can balance both the rapid industry expansion and pledges to safety and transparency.
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