MATT SWIDER

JUN 15, 2024

While the AI world awaits a wider rollout of ChatGPT-4o features and the eventual segue to ChatGPT-5, parent company OpenAI may be making a transition of its own.

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OpenAI founder and CEO Sam Altman has reportedly told shareholders that the AI company could go from a non-profit to a for-profit benefit corporation, according to the original reporting by The Information. This would match the structure of rival US-based AI firms Anthropic (maker of Claude 3) and Elon Musk’s xAI (maker of Grok).

The shift to a for-profit status makes sense for OpenAI, which has increasingly been acting like a profit-driven company valued at $80 billion. The company’s non-profit mission statement and the closed nature of ChatGPT have also drawn criticism from the likes of Elon Musk, though he’s recently dropped his lawsuit against OpenAI.

Why an OpenAI IPO is important

More importantly than perception, the change to a for-profit benefit corporation could enable OpenAI to file an initial public offering (IPO). Just four days ago, the thriving AI company announced that it had hired Sarah Friar as its first CFO, sparking speculation that an IP could be in its future.

An IPO would enable OpenAI to raise more money and rapidly hire new talent. In my estimation, the timing couldn’t be better, as the leading smartphone manufacturer is about to pair up with the leading AI chatbot. Apple’s iOS 18 is set to feature ChatGPT integration and usage of ChatGPT could peak along with resources. This is going to be a key advantage for Apple’s top-end phones like the iPhone 15 Pro Max and, soon the iPhone 16, over the Samsung Galaxy S24 Ultra, which has some AI features like summaries and photo-editing, but can’t answer questions via an LLM.

We’re still a long way from a theoretical OpenAI IPO filing, and the for-profit benefit structure is only being talked about in overheard comments and through speculation of new executive hires. But the signs and motives and both there for it to happen.