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OpenAI is officially done pretending it can run like a charity. On Friday, the company announced it has finalized plans to transition into a public benefit corporation (PBC) as soon as possible next year, finally ditching the nonprofit structure that’s apparently been holding it back. “The hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing the mission,” its board said. They confidently added that: “Our plan would result in one of the best-resourced non-profits in history. The non-profit’s significant interest in the existing for-profit would take the form of shares in the PBC at a fair valuation determined by independent financial advisors. This will multiply the resources that our donors gave manyfold.” OpenAI is losing money—and fast OpenAI is valued at $157 billion, a jaw-dropping figure for a company that launched ChatGPT only two years ago. The chatbot kicked off a massive generative AI boom, and OpenAI has been riding the wave ever since. But big ambitions come with even bigger bills. This year, the company expects $3.7 billion in revenue. Sounds great, right? Not when you realize they’re also forecasting $5 billion in losses. CNBC confirmed these numbers back in September, and they’ve only gotten worse since. Building and running massive AI models like ChatGPT isn’t cheap. OpenAI leans heavily on Nvidia processors and Microsoft’s cloud infrastructure—tools that don’t come with discount tags. In October, OpenAI closed a $6.6 billion funding round. That money is supposed to help the company hold its ground against competitors like Elon’s xAI, Google, Amazon, and Anthropic. Why? Because the generative AI market is projected to hit $1 trillion in revenue within a decade, and everyone wants a piece of that pie. But here’s the thing: investors don’t…

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Filed under: News - @ December 27, 2024 5:20 pm