OpenAI CEO Sam Altman revealed the main reason behind OpenAI’s shift from a nonprofit to a for-profit model: raising more capital.
In an interview with Harvard Business School, Altman explained that scaling AI research required far more funding than they could secure as a nonprofit.
Initially founded in 2015 as a nonprofit to create AI to benefit humanity, OpenAI adopted a “capped-profit” model in 2019 to attract investors.
The model allowed returns for investors while trying to preserve the company’s mission. However, after a $6.6 billion funding round this fall, OpenAI committed to becoming a fully for-profit entity within two years.
Altman admitted that scaling AI models and the infrastructure needed to train them required massive investment.
“We underestimated how much we needed to scale,” he said. Despite the shift, OpenAI insists its nonprofit arm remains central to its mission to develop AI that benefits everyone.
Altman added that nonprofits can work in AI development but are unlikely to lead in scaling research. “To be at the forefront, you probably can’t do that as a nonprofit,” he said.
