OpenAI plans to ring in the New Year with a for-profit push
Dec 27, 2024 - theregister.com
OpenAI is restructuring its corporate setup by establishing a public benefit corporation (PBC) to attract large-scale investments, moving away from its current non-profit-controlled for-profit model. This shift, planned for 2025, will see the for-profit wing take control of operations while the non-profit arm focuses on charitable initiatives. The change aims to address the need for significant capital to compete with rivals like Anthropic, Meta, and Google. OpenAI's restructuring follows a $6.6 billion funding round, raising its valuation to $157 billion, but has faced criticism from Elon Musk, who has filed legal challenges against the transition.
Meanwhile, Microsoft is diversifying the AI models used in its 365 Copilot products, reducing reliance on OpenAI by incorporating its own Phi-series models. This move is part of a strategy to cut costs and potentially offer model customization services to customers. In related news, Musk-backed xAI raised $6 billion to expand its Colossus supercomputer, aiming to support the development of future AI models.
Key takeaways:
OpenAI plans to restructure into a public benefit corporation (PBC) to facilitate large-scale investment and adapt to competitive pressures.
Microsoft is diversifying its AI models for 365 Copilot products, reducing reliance on OpenAI models to cut costs.
OpenAI recently raised $6.6 billion, increasing its valuation to $157 billion, to support the development of advanced AI models.
Elon Musk has criticized OpenAI's transition to a for-profit structure and filed legal challenges against the company.
