Expert: OpenAI may have already exceeded the limitations of a nonprofit structure and is facing expensive restructuring

ChainCatcher news, according to Fortune, as OpenAI's valuation skyrockets to $157 billion, its unique hybrid structure of nonprofit and for-profit is facing severe challenges. Experts believe that OpenAI may have reached or exceeded the limits of its corporate structure, which could lead to costly and complex restructuring. OpenAI currently operates as a nonprofit organization with the mission of developing artificial intelligence that benefits "all of humanity," while controlling a for-profit subsidiary. UCLA law professor Jill Horwitz emphasizes that when conflicts arise between the nonprofit and for-profit sectors, charitable purposes must take precedence.

If the nonprofit sector loses control over its subsidiary, OpenAI may need to pay fair market value for interests and assets that originally belonged to the nonprofit sector. This involves complex asset evaluations, including intellectual property, patents, commercial products, and licenses. Experts anticipate that OpenAI may face rigorous scrutiny from the IRS, the Delaware Attorney General's office, and the California Attorney General's office.

OpenAI CEO Sam Altman recently confirmed that the company is considering restructuring, potentially transitioning to a public benefit corporation, but specific details have not been disclosed. OpenAI board chair Bret Taylor stated that the board is focused on fulfilling its fiduciary duties, and any potential restructuring will ensure that the nonprofit organization continues to exist and thrive. However, some observers, including former board member Elon Musk, express skepticism about whether OpenAI remains true to its mission.