OpenAI plans transition to public benefit corporation to boost investment and social goals

OpenAI plans to transition its for-profit arm into a Delaware public benefit corporation (PBC) to attract more investment and compete in the AI sector. This new structure will allow it to balance profit-making with social and environmental goals. Under the PBC model, OpenAI's non-profit will own shares in the for-profit entity, which will fund charitable initiatives. This differs from traditional non-profits, which do not have shareholders and reinvest profits into their missions. While PBCs must pursue public benefits, they are not guaranteed to prioritize these over profits. Legal experts note that PBCs can be vulnerable to takeovers if their public benefit goals conflict with bidders' interests.