OpenAI is a nonprofit-corporate hybrid: A management expert explains how this model works − and how it fueled the tumult around CEO Sam Altman's short-lived ouster-2 - The Conversation

( November 30, 2023; The Conversation )

Description: "The board is supposed to stop OpenAI from veering from its mission of building technology that benefits humanity."

Altman co-founded OpenAI in 2015 as a tax-exempt nonprofit with a mission “to build artificial general intelligence (AGI) that is safe and benefits all of humanity.” To raise more capital than it could amass through charitable donations, OpenAI later established a holding company that enables it to take money from investors for a for-profit subsidiary it created.

OpenAI’s leaders chose this “hybrid governance” structure to enable it to stay true to its social mission while harnessing the power of markets to grow its operations and revenues. Merging profit with purpose has enabled OpenAI to raise billions from investors seeking financial returns while balancing “commerciality with safety and sustainability, rather than focusing on pure profit-maximization,” according to an explanation on its website.



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