OpenAI scuttles plan to become a for-profit

OpenAI and its technology will remain in the control of a nonprofit organization, according to a letter to employees from Sam Altman on Monday.The big picture: OpenAI began as a nonprofit, but Altman has been considering changing the structure of OpenAI since shortly after his brief ouster in November 2023 and the cost of building and maintaining ChatGPT has skyrocketed.What they're saying: "OpenAI is not a normal company and never will be," Altman said in the letter.How it works: OpenAI currently uses a for-profit LLC as a vehicle for outside investors to buy into the company, but their profits are capped and the LLC is controlled by OpenAI's nonprofit board.After the company's 2023 boardroom battle, Altman said he would seek to spin out the for-profit subsidiary as an independent company.Today's news means he's abandoning that plan.Instead, the LLC will become a for-profit Public Benefit Corporation (PBC) which the OpenAI nonprofit board will continue to control.The intrigue: Elon Musk and others have sued OpenAI over its plans to spin out the for-profit subsidiary."We made the decision for the nonprofit to retain control of OpenAI after hearing from civic leaders and engaging in constructive dialogue with the offices of the Attorney General of Delaware and the Attorney General of California," Altman said in a statement. Editor's note: This story is breaking news and will be updated.

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