The Artificial Intelligence firm, OpenAI, perhaps most famous for its Chat GPT text generation software, is set to abandon its non-profit status to become a fully-fledged for-profit business. The group’s founder and CEO, Sam Altman, who is credited with lighting a fire under the AI arms race with the release of Chat GPT in 2022, looks set to be handed £8 million in shares. However, the surprise move appears to have caused disgruntlement within the ranks of OpenAI, with its Chief Technology Officer announcing her resignation in the wake of the news. So why has OpenAI abandoned its non-profit status, and what if anything, does it tell us about the industry as a whole?

What is OpenAI?

OpenAI is a San Franciso based research group responsible for several well-known AI products and applications, most famously Chat GPT. It was co-founded in 2015 by some well-known names in the tech space, including Elon Musk, who has since left amid following internal acrimony and Sam Altman, Open AI’s current CEO.

Hundreds of millions of dollars were reportedly donated to fund the group’s research – and it has since won billions in investment from big players, including Microsoft. Open AI has attracted its share of controversy over the years, including being sued by The New York Times and public disputes between its members over the ethics of artificial intelligence.

However, that appears to have done little to prevent OpenAI’s products from becoming some of the most recognisable in the market, from Chat GPT to Dall-E. OpenAI is now looking to become a for-profit business, leaving question marks over the future of OpenAI and where it will go next.

Open AI seeks fresh investment

While operating as a non-profit, OpenAI was subject to limitations over how much money it could receive. As the AI arms race heats up, the group might have chosen to change tack to incentivise investors to come on board in a big way. Open AI is on track to lose $5 billion this year – and is looking to raise an additional $6.5 billion, as per The Guardian – and that means enticing the likes of Nvidia and Apple to open their wallets.

Commenting on the shift amid a wave of resignations, CEO Sam Altman said: “Leadership changes are a natural part of companies, especially companies that grow so quickly and are so demanding… I obviously won’t pretend it’s natural for this one to be so abrupt, but we are not a normal company.”

 It came as three senior executives announced their departure from OpenAI – the third exodus this year following a walkout by co-founder Ilya Sutskever in May and the resignation of other execs in August. The successive exits by big players have accompanied concerns around Open AI’s safety protocols.

As per Business Insider, one former researcher complained the group’s safety team had been halved in a year. It remains unclear whether the fresh wave of walkouts relates to similar concerns, or how they might relate to the transition toward for-profit status.

How much is Open AI worth?

Based on ongoing talks, if the for-profit plans go ahead as is, OpenAI would be valued at $150 billion. While that might seem a lot for a loss-making research group, investors are reportedly betting OpenAI will eventually have a multi-trillion-dollar valuation.

Whether that bet will pay off will be in large part tied to the fortunes of AI as a whole. Estimates vary wildly over the technology’s future value, and observers disagree over how important a role it will play in the workplaces and lives of tomorrow.

A report by PWC projected AI would contribute a whopping $15.7 trillion to the global economy in 2030, writing:

“What comes through strongly from all the analysis we’ve carried out for this report is just how big a game changer AI is likely to be, and how much value potential is up for grabs. AI could contribute up to $15.7 trillion1 to the global economy in 2030, more than the current output of China and India combined. Of this, $6.6 trillion is likely to come from increased productivity and $9.1 trillion is likely to come from consumption-side effects.”

And while it’s not a direct comparison, a report by Bloomberg Intelligence put the value of the AI market at just $1.3 trillion by 2032 – still an impressive expansion by today’s numbers but not the game-changer others envisage.

So, the jury is out on what shape and size AI technology will take in the future. It is, as has been pointed out, a similar precipice to the invention of the internet – or at least, it appears to be.

What’s next for OpenAI?

The transition of OpenAI from a non-profit to a for-profit entity represents a pivotal moment for both the organization and the broader artificial intelligence industry. While the decision is aimed at attracting fresh investment and securing its place in the fast-evolving AI landscape, it has not been without controversy.

Leadership departures and concerns over safety protocols underscore the challenges facing OpenAI – but appear to have done little to hamper its extraordinary growth. Investors appear confident in AI’s transformative potential, but the future of OpenAI and the technology’s broader economic impact remains uncertain.

As AI continues to evolve, its ability to reshape industries and societies will be key in determining whether OpenAI’s gamble on a for-profit structure pays off in the long run. Ultimately, this shift reflects the high stakes and rapid changes within the AI sector, as companies seek to balance innovation with ethical and financial considerations.