OpenAI’s Transformation: From a Non-profit to a 100 Billion Valuation

17 Pages Posted: 19 Mar 2024

See all articles by Alexandra Andhov

Alexandra Andhov

University of Auckland - Faculty of Law; University of Auckland - Department of Commercial Law; University of Copenhagen - Faculty of Law

Date Written: March 6, 2024

Abstract

The transformation of OpenAI from its altruistic non-profit origins to a commercially-driven entity valued at over $100 billion represents a significant paradigm shift in the Big Tech world. Established in 2015 with the aim of developing AI for the greater good and providing open-source resources, OpenAI has since pivoted to a profit-generating model, underscored by a strategic partnership with Microsoft. This evolution has raised questions about the stewardship of data initially gathered under its non-profit model, intellectual property rights, and financial strategies to optimise tax positions. A pivotal moment in OpenAI's trajectory was the launch of ChatGPT in November 2022, which rapidly acquired 100 million users, surpassing the adoption rates of social media like TikTok and Instagram. This article delves into OpenAI's transition, examining the ethical and strategic dimensions of moving from a non-profit through a capped-profit model to a fully commercial approach, scrutinizing the role and alignment of its board members with the organisation's mission statement. Additionally, the analysis extends to the implications of OpenAI's alliance with Microsoft, probing potential conflicts with the company's original mission and values.

Keywords: OpenAI, corporate structure, corporate governance, NGO

Suggested Citation

Andhov, Alexandra, OpenAI’s Transformation: From a Non-profit to a 100 Billion Valuation (March 6, 2024). Available at SSRN: https://ssrn.com/abstract=4750197 or http://dx.doi.org/10.2139/ssrn.4750197

Alexandra Andhov (Contact Author)

University of Auckland - Faculty of Law ( email )

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Auckland Mail Centre
Auckland, 1142
New Zealand

University of Auckland - Department of Commercial Law ( email )

Sir Owen G. Glenn Building
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Auckland
New Zealand

University of Copenhagen - Faculty of Law ( email )

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Copenhagen, DK-2300
Denmark

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