Artificial intelligence (AI) company OpenAI is reportedly contemplating a transition from its current capped-profit corporation model to a full for-profit structure. This potential shift was first disclosed by The Information, with CEO and co-founder Sam Altman allegedly informing shareholders of the possible change during the week of June 10. If this transition occurs, it would likely result in OpenAI’s nonprofit board losing control over the company.

OpenAI, currently valued at approximately $86 billion, operates as a partnership between its original nonprofit organization and a new capped-profit arm. This structure was designed to encourage investment in research focused on artificial general intelligence (AGI) while adhering to the company's founding vision. The move to a capped-profit model was justified by the company as necessary due to the insufficiency of donations to fund its ambitious research, thus requiring a model that could attract more substantial financial contributions from stakeholders.

Despite the potential shift, OpenAI’s website still advises stakeholders to consider their investments akin to donations. The site warns: “Investing in OpenAI Global, LLC, is a high-risk investment. Investors could lose their capital contribution and not see any return. It would be wise to view any investment in OpenAI Global, LLC in the spirit of a donation, with the understanding that it may be difficult to know what role money will play in a post-AGI world.”

As OpenAI explores this potential restructuring, CEO Sam Altman has been reconfiguring the board with a number of new appointees, including Sue Desmond-Hellmann, former CEO of the Bill and Melinda Gates Foundation; Nicole Seligman, former Sony vice president; and Fidji Simo, CEO and chair of Instacart. Notably, retired U.S. Army General and former National Security Agency (NSA) Director Paul Nakasone has also been added to the board.

Nakasone's appointment has sparked significant controversy, particularly from Edward Snowden, a former U.S. intelligence contractor. Snowden took to X.com to express his alarm, advising the public to “not ever trust @OpenAI or its products,” specifically naming ChatGPT. He asserted that “there is only one reason for appointing an @NSAGov Director to your board,” and warned that this move represents “a willful, calculated betrayal of the rights of every person on Earth. You have been warned.”

The reported shift to a for-profit model and the controversial board appointments suggest a significant strategic pivot for OpenAI. These changes may signal a broader effort to secure more substantial investment and influence within the rapidly evolving AI industry, but they also raise critical questions about the company’s future direction and commitment to its original mission.