Current:Home > FinanceDocuments show OpenAI’s long journey from nonprofit to $157B valued company-LoTradeCoin
Documents show OpenAI’s long journey from nonprofit to $157B valued company
View Date:2024-12-24 00:08:33
Back in 2016, a scientific research organization incorporated in Delaware and based in Mountain View, California, applied to be recognized as a tax-exempt charitable organization by the Internal Revenue Services.
Called OpenAI, the nonprofit told the IRS its goal was to “advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.”
Its assets included a $10 million loan from one of its four founding directors and now CEO, Sam Altman.
The application, which nonprofits are required to disclose and which OpenAI provided to The Associated Press, offers a view back in time to the origins of the artificial intelligence giant that has since grown to include a for-profit subsidiary recently valued at $157 billion by investors.
It’s one measure of the vast distance OpenAI — and the technology that it researches and develops — has traveled in under a decade.
In the application, OpenAI indicated it did not plan to enter into any joint ventures with for-profit organizations, which it has since done. It also said it did “not plan to play any role in developing commercial products or equipment,” and promised to make its research freely available to the public.
A spokesperson for OpenAI, Liz Bourgeois, said in an email that the organization’s missions and goals have remained constant, though the way it’s carried out its mission has evolved alongside advances in technology.
Attorneys who specialize in advising nonprofits have been watching OpenAI’s meteoric rise and its changing structure closely. Some wonder if its size and the scale of its current ambitions have reached or exceeded the limits of how nonprofits and for-profits may interact. They also wonder the extent to which its primary activities advance its charitable mission, which it must, and whether some may privately benefit from its work, which is prohibited.
In general, nonprofit experts agree that OpenAI has gone to great lengths to arrange its corporate structure to comply with the rules that govern nonprofit organizations. OpenAI’s application to the IRS appears typical, said Andrew Steinberg, counsel at Venable LLP and a member of the American Bar Association’s nonprofit organizations committee.
If the organization’s plans and structure changed, it would need to report that information on its annual tax returns, Steinberg said, which it has.
“At the time that the IRS reviewed the application, there wasn’t information that that corporate structure that exists today and the investment structure that they pursued was what they had in mind,” he said. “And that’s okay because that may have developed later.”
Here are some highlights from the application:
Early research goals
At inception, OpenAI’s research plans look quaint in light of the race to develop AI that was in part set off by its release of ChatGPT in 2022.
OpenAI told the IRS it planned to train an AI agent to solve a wide variety of games. It aimed to build a robot to perform housework and to develop a technology that could “follow complex instructions in natural language.”
Today, its products, which include text-to-image generators and chatbots that can detect emotion and write code, far exceed those technical thresholds.
No commercial ambitions
The nonprofit OpenAI indicated on the application form that it had no plans to enter into joint ventures with for-profit entities.
It also wrote, “OpenAI does not plan to play any role in developing commercial products or equipment. It intends to make its research freely available to the public on a nondiscriminatory basis.”
OpenAI spokesperson Bourgeois said the organization believes the best way to accomplish its mission is to develop products that help people use AI to solve problems, including many products it offers for free. But they also believe developing commercial partnerships has helped further their mission, she said.
Intellectual property
OpenAI reported to the IRS in 2016 that regularly sharing its research “with the general public is central to the mission of OpenAI. OpenAI will regularly release its research results on its website and share software it has developed with the world under open source software licenses.”
It also wrote it “intends to retain the ownership of any intellectual property it develops.”
The value of that intellectual property and whether it belongs to the nonprofit or for-profit subsidiary could become important questions if OpenAI decides to alter its corporate structure, as Altman confirmed in September it was considering.
___
The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP’s text archives.
___
Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.
veryGood! (54)
Related
- PSA: Coach Outlet Has Stocking Stuffers, Gifts Under $100 & More for the Holidays RN (up to 60% Off)
- Green River Killer victim identified as Lori Razpotnik 41 years after she went missing
- Is a Schitt's Creek Reunion in the Works? Dan Levy Says...
- Two boys asked Elf on the Shelf to bring home their deployed dad. Watch what happened.
- 'Heretic' spoilers! Hugh Grant spills on his horror villain's fears and fate
- Could Colorado lose commitment from top offensive lineman? The latest on Jordan Seaton
- Two county officials in Arizona plead not guilty to charges for delaying 2022 election certification
- In just one month, Postal Service to raise price of Forever first-class stamps to 68 cents
- Man waives jury trial in killing of Georgia nursing student
- A Dutch court has sentenced a man convicted in a notorious Canadian cyberbullying case to 6 years
Ranking
- College Football Playoff ranking release: Army, Georgia lead winners and losers
- Angola is leaving OPEC oil cartel after 16 years after dispute over production cuts
- Trump urges Supreme Court to decline to fast-track dispute over immunity claim
- Ukraine lawmakers vote to legalize medical marijuana and help ease stress from the war with Russia
- Patricia Heaton criticizes media, 'extremists' she says 'fear-mongered' in 2024 election
- Photos of Iceland volcano eruption show lava fountains, miles-long crack in Earth south of Grindavik
- Pacific storm dumps heavy rains, unleashes flooding in California coastal cities
- Did Travis Kelce Really Give Taylor Swift a Ring for Her Birthday? Here's the Truth
Recommendation
-
Video shows masked man’s apparent attempt to kidnap child in NYC; suspect arrested
-
UN says more than 1 in 4 people in Gaza are ‘starving’ because of war
-
After approving blessings for same-sex couples, Pope asks Vatican staff to avoid ‘rigid ideologies’
-
Spain’s leader lauds mended relations with Catalonia. Separatists say it’s time to vote on secession
-
Kennesaw State football coach Brian Bohannon steps down after 10 seasons amid first year in FBS
-
Criminal probe of police actions during Uvalde school shooting will continue into 2024, prosecutor says
-
Top US military officer speaks with Chinese counterpart as US aims to warm relations with Beijing
-
Maryland prison contraband scheme ends with 15 guilty pleas