A recent report indicates a shift in the structural plan of OpenAI from being a Non-Profit entity to a For-Profit one. This move has made the company more flexible and able to attract investments. There is a proposal to increase the voting power of the board from the Non-Profit sector.
OpenAI believes that enhancing the voting power of the Non-Profit side of the board would help prevent potential issues if the For-Profit sector is targeted for acquisition by investors seeking certain returns. This would ensure that decision-making power remains with the original Non-Profit segment, safeguarding OpenAI from being controlled by certain investor groups.
Disparities in voting rights models are commonly found in tech companies, particularly those with multiple classes of stocks. This allows founders with key roles, despite holding a minority of shares, to retain significant management power. However, OpenAI’s case involves a unique scenario of Non-Profit versus For-Profit models.
The proposed voting power shift is likely to impact current investors in OpenAI, most of whom are on the For-Profit side, such as Microsoft and SoftBank.
Source: Reuters
TLDR: OpenAI’s shift from Non-Profit to For-Profit model includes a proposal to increase voting power from the Non-Profit sector to maintain control and prevent potential issues related to investor influence.
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