Technology

How does a nonprofit offer stocks?

Short answer, they are for profit now. It is complicated, but they are able to raise equity and sell shares.

• The OpenAI Nonprofit would remain intact, with its board continuing as the overall governing body for all OpenAI activities.
• A new for-profit subsidiary would be formed, capable of issuing equity to raise capital and hire world class talent, but still at the direction of the Nonprofit. Employees working on for-profit initiatives were transitioned over to the new subsidiary.
• The for-profit would be legally bound to pursue the Nonprofit’s mission, and carry out that mission by engaging in research, development, commercialization and other core operations. Throughout, OpenAI’s guiding principles of safety and broad benefit would be central to its approach.
• The for-profit’s equity structure would have caps that limit the maximum financial returns to investors and employees to incentivize them to research, develop, and deploy AGI in a way that balances commerciality with safety and sustainability, rather than focusing on pure profit-maximization.
• The Nonprofit would govern and oversee all such activities through its board in addition to its own operations. It would also continue to undertake a wide range of charitable initiatives, such as sponsoring a comprehensive basic income study, supporting economic impact research, and experimenting with education-centered programs like OpenAI Scholars. Over the years, the Nonprofit also supported a number of other public charities focused on technology, economic impact and justice, including the Stanford University Artificial Intelligence Index Fund, Black Girls Code, and the ACLU Foundation.

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