OpenAI, Creator of ChatGPT Cannot Use ChatGPT to Discover the Right Corporate Structure

You cannot make this up: “OpenAI’s Board of Directors is evaluating our corporate structure in order to best support the mission of ensuring artificial general intelligence (AGI)1 benefits all of humanity, with three objectives”. Yes, a $157 billion company board is still “evaluating” its corporate structure!

OpenAI’s Board of Directors is evaluating our corporate structure in order to best support the mission of ensuring artificial general intelligence (AGI)¹ benefits all of humanity, with three objectives:

1. Choose a non-profit / for-profit structure that is best for the long-term success of the mission.
2. Make the non-profit sustainable.
3. Equip each arm to do its part.

We have a non-profit and a for-profit today, and we will continue to have both, with the for-profit’s success enabling the nonprofit to be well funded, better sustained, and in a stronger position for the mission.

We view this mission as the most important challenge of our time. It requires simultaneously advancing AI’s capability, safety, and positive impact in the world. In this post, we share the history of our current structure, why we think a change is necessary, and what specific change we are considering.

OpenAI is in a mess because most of the founding partners are those who believe in the unalloyed supremacy of technology above all things. Yes, provided they can extend the Pythagorean postulation that the universe is numbers, and can pursue its practicalization in fixing market frictions, everything will fall into place.

Unfortunately, that is an illusion, and OpenAI is learning the hard way. If they had incorporated this company as a for-profit company, the generative AI pioneer will not be going through this paralysis. But that was not the case as they went non-profit, and now want to evolve, and morph, into another species of companies. Unfortunately, that is not an easy thing, because the law is clear: if you are to dissolve that non-profit, the assets move to another non-profit or to the state for public good.

Of course, how do you hand over $157 billion to the government? That is why the Board is still “evaluating” because they have no clear answers. When they are done, a simple suit will bring them to order.

Many years ago, to fund my personal non-profit on electronics in Africa (via African Institution of Technology,  a 501c3 charity, which has supported electronics education in 112 universities, click afrit.org for photos), I read the ordinance with the US Internal Revenue Service. Quickly, it became clear that it is better to go and make money, and use the profit to support any charity of interest, than setting up a non-profit directly for its purpose. That is what lawyers will tell you because you never know tomorrow. So, you will have Mastercard Foundation, Intel Foundation, etc funded by Mastercard, Intel, etc.

The creator of ChatGPT cannot use ChatGPT to discover the right corporate structure because that is above the pay-compute-grade of ChatGPT. But if they had asked a recent law graduate, they possibly might have been saved from this. And that takes me to the message: use those lawyers, pay them, because they will save you from troubles. Today, I sent two documents to two different lawyers (yes, I use two ), and was happy when they independently returned: “Prof, it’s ready to go”, “Sir, everything looks nice”. 

Good People, respect lawyers because they serve as high priests on the altars of governments even if you are a tech prodigy.

Register for Tekedia Mini-MBA (Feb 10 - May 3, 2025), and join Prof Ndubuisi Ekekwe and our global faculty; click here.