"The leaders of OpenAI, which was launched in 2015 as a non-profit with the goal of building AI for the good of humanity, are growing anxious that their dream of reorganizing as a for-profit company might be dead in the water. As reported by the Wall Street Journal, a coalition of some of the most powerful tech companies, NGOs, non-profits, and labor groups in OpenAI's operating states of California and Delaware are lobbying attorneys general to crack down on the tech giant's restructuring efforts."
"Failing to reconstitute as a for-profit could mean OpenAI's "scaling" approach to AI development - a resource-intensive strategy that's costing the company billions of dollars a year - would likely have to be abandoned as investor confidence wanes. So far, that doesn't appear to be on the table. Instead, the WSJ reports that OpenAI seems to be considering uprooting its entire operations and moving to a new state, should California's attorney general block the transition."
OpenAI leaders are anxious about converting the organization from a nonprofit structure to a for-profit entity. Powerful tech firms, NGOs, non-profits, and labor groups in California and Delaware are lobbying state attorneys general to challenge the restructuring under statutes protecting charitable trust assets, including ChatGPT. OpenAI operates as a subsidiary of a nonprofit parent and is valued at roughly $300 billion. Investors dislike the current arrangement, and failure to convert could jeopardize the company's resource-intensive "scaling" approach that costs billions annually. OpenAI is considering relocating operations if state authorities block the transition, while saying it will work constructively with the attorneys general.
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