OpenAI, recently raised the controversial structuring plan that has repealed. This decision means an important step towards the company’s transition to a profitable model. According to the previously announced plan, OpenAI’s foundation structure would leave the control over the arm of profit. However, the company shared with the public that it gave up this idea.
According to Bret Taylor, OpenAI Chairman of the Board of Directors, this decision was taken after the talks with civil society leaders and the involvement of Delaware and California Chief Public Prosecutor’s Office offices. Taylor pointed out the necessity of protecting a model that observes public interests. In this context, the Foundation will continue to control the OpenAI on the repository -purpose subsidiary to be restructured. Moreover, the foundation will be the great shareholder of the “public interest in the public interest” in the new structure.
OpenAI had directed to satisfy investors because of capital needs
The previous plan of the company envisaged the transition to a more flexible and traditional capital structure in line with investor demands. Because OpenAI had only a giant $ 6.6 billion investment of $ 6.6 billion only two months ago. Despite this, in December 2023, it was stated that “more than predicted capital needs” occurred. For this reason, the company found it necessary to turn to a structure that would satisfy investors.
The company’s previous plan involved to recognize an audit force depending on the share rate by reducing the absolute domination of the foundation on the administration. However, this approach was the target of intense criticisms on the grounds that it contradicted the principle of public interest. Former employees, some non -governmental organizations and figures such as Elon Musk were openly opposed to this structure. It is seen that the reactions of the company take this back step are effective.
Jill Horwitz, a law of law at Northwestern University, was one of the names questioning how the foundation would be effective in this new order. According to Horwitz, even if it will continue to identify the members of the Board of Directors of the Foundation, this authority will be permanent or temporary, it is still unclear. Moreover, questions, such as who these members will consist of or whether investors will have a say, are unanswered. This creates uncertainty about how the new model will work in the long run.
Professor Michael Dorff from UCLA says there are some options to ensure the sustainability of control. For example, it is possible to establish a single -class shareholder and give the majority shares to the foundation, so that the board of directors is elected by the foundation. A more permanent model can be installed through the double -class shares structure. Thanks to this structure, the majority in management can be guaranteed by giving special voting rights to the foundation.
Another important issue at this point is the risk of weight loss over time. If the shares in the hands of the foundation are not specially privileged, the effect of the foundation may be reduced in cases such as export of new shares or shares. This may lead to re -discussion of who will belong to the long run. The fact that the company has not yet made a clear explanation in this regard increases uncertainty.
On the other hand, it is a question of whether Microsoft will approve this new plan. Microsoft, which has invested about $ 14 billion in OpenAI, is estimated to have the right to speak on this structure. According to the financing agreement in October, the OpenAI may turn into a $ 6.6 billion investment debt if it does not go into a profit structure within two years. This shows that the company is under serious financial pressure while determining the current structure of the company.
CEO Sam Altman described this new model as “a simpler capital structure” in internal correspondence. According to Altman, the previous limited profit structure is in accordance with a world where only a single AGI attempt exists, but today this structure has lost its validity. In the new model, a transition to a classic capital structure where everyone has a share. With this transition, the existing limitations on investors’ returns will be removed.
In addition to all these, in order to enforce the new structure of OpenAI, the negotiations with Microsoft must be completed and state prosecutors must approve. This process is not only a commercial regulation, but also a transformation of public law. Until the final structure is shaped, the discussions on the company’s control and profit balance seems likely to continue.