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In a significant shift, OpenAI is set to ditch its nonprofit status in 2025, opting for a traditional for-profit model that could propel the AI giant towards a staggering $150 billion valuation, mirroring the trajectory of its Silicon Valley counterparts.

The news, first reported by Fortune, was revealed by CEO Sam Altman during a weekly employee meeting. Altman provided few details but reaffirmed that OpenAI was "set" to transition away from nonprofit control, having "outgrown" its founding arrangement.

Currently, OpenAI operates as a "capped" for-profit LLC controlled by a nonprofit. This structure allowed OpenAI's board of directors, part of the nonprofit parent structure, to terminate Altman as CEO in November 2023. The board accused Altman of deceiving and obstructing the work of the nonprofit board and OpenAI's safety measures. Altman was later reinstated and took leadership control of OpenAI's revamped internal safety team.

As 2025 approaches, Altman and OpenAI's leadership are now navigating a burgeoning, billion-dollar business. Last month, Apple was rumored to be injecting capital into the AI startup, joining other major backers like Microsoft in what would inform the more than $100 billion valuation. According to a Reuters report, anonymous sources revealed that investors are making capital injections contingent on OpenAI abandoning its profit cap, which may require the nonprofit controlling entity to be changed or abolished.

An OpenAI spokesperson emphasized that the company's nonprofit arm is "core to our mission and will continue to exist," as OpenAI remains "focused on building AI that benefits everyone." For more on the latest developments in AI, visit carsnewstoday.com.