OpenAI says it needs ‘more capital than we’d imagined’ as it lays out for-profit plan
OpenAI said Friday that in moving toward a new for-profit structure in 2025, the company will create a public benefit corporation to oversee commercial operations, removing some of its nonprofit restrictions and allowing it to function more like a high-growth startup.
“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,” OpenAI’s board wrote in the post. “We once again need to raise more capital than we’d imagined. Investors want to back us but, at this scale of capital, need conventional equity and less structural bespokeness.”
The pressure on OpenAI is tied to its $157 billion valuation, achieved in the two years since the company launched its viral chatbot, ChatGPT, and kicked off the boom in generative artificial intelligence. OpenAI closed its latest $6.6 billion round in October, gearing up to aggressively compete with Elon Musk’s xAI as well as Microsoft, Google, Amazon and Anthropic in a market that’s predicted to top $1 trillion in revenue within a decade.
Developing the large language models at the heart of ChatGPT and other generative AI products requires an ongoing investment in high-powered processors, provided largely by Nvidia, and cloud infrastructure, which OpenAI largely receives from top backer Microsoft.
OpenAI expects about $5 billion in losses on $3.7 billion in revenue this year, CNBC confirmed in September. Those numbers are increasing rapidly.
By transforming into a Delaware PBC “with ordinary shares of stock,” OpenAI says it can pursue commercial operations, while separately hiring a staff for its nonprofit arm and allowing that wing to take on charitable activities in health care, education and science.
The nonprofit will have a “significant interest” in the PBC “at a fair valuation determined by independent financial advisors,” OpenAI wrote.
OpenAI’s complicated structure as it exists today is the result of its creation as a nonprofit in 2015. It was founded by CEO Sam Altman, Musk and others as a research lab focused on artificial general intelligence, or AGI, which was an entirely futuristic concept at the time.
In 2019, OpenAI aimed to move past its role as solely a research lab in hopes of functioning more like a startup, so it created a so-called capped-profit model, with the nonprofit still controlling the overall entity.
“Our current structure does not allow the Board to directly consider the interests of those who would finance the mission and does not enable the nonprofit to easily do more than control the for-profit,” OpenAI wrote in Friday’s post.
OpenAI added that the change would “enable us to raise the necessary capital with conventional terms like our competitors.”
Musk’s opposition
OpenAI’s efforts to restructure face some major hurdles. The most significant is Musk, who is in the midst of a heated legal battle with Altman that could have a significant impact on the company’s future.
In recent months, Musk has sued OpenAI and asked a court to stop the company from converting to a for-profit corporation from a nonprofit. In posts on X, he described that effort as a “total scam” and claimed that “OpenAI is evil.” Earlier this month, OpenAI clapped back, alleging that in 2017 Musk “not only wanted, but actually created, a for-profit” to serve as the company’s proposed new structure.
In addition to its face-off with Musk, OpenAI has been dealing with an outflow of high-level talent, due in part to concerns that the company has focused on taking commercial products to market at the expense of safety.
In late September, OpenAI Chief Technology Officer Mira Murati announced she would depart the company after 6½ years. That same day, research chief Bob McGrew and Barret Zoph, a research vice president, also announced they were leaving. A month earlier, co-founder John Schulman said he was leaving for rival startup Anthropic.
Altman said during a September interview at Italian Tech Week that recent executive departures were not related to the company’s potential restructuring: “We have been thinking about that — our board has — for almost a year independently, as we think about what it takes to get to our next stage,” he said.
Those weren’t the first big-name exits. In May, OpenAI co-founder Ilya Sutskever and former safety leader Jan Leike announced their departures, with Leike also joining Anthropic.
Leike wrote in a social media post at the time that disagreements with leadership about company priorities drove his decision.
“Over the past years, safety culture and processes have taken a backseat to shiny products,” he wrote.
One employee, who worked under Leike, quit soon after him, writing on X in September that “OpenAI was structured as a non-profit, but it acted like a for-profit.” The employee added, “You should not believe OpenAI when it promises to do the right thing later.”
The Hims app arranged on a smartphone in New York on Feb. 12, 2025.
Gabby Jones | Bloomberg | Getty Images
Hims & Hers Health shares closed up 5% on Tuesday after the company announced patients can access Eli Lilly‘s weight loss medication Zepbound and diabetes drug Mounjaro, as well as the generic injection liraglutide, through its platform.
Zepbound, Mounjaro and liraglutide are part of the class of weight loss medications called GLP-1s, which have exploded in popularity in recent years. Hims & Hers launched a weight loss program in late 2023, but its GLP-1 offerings have evolved as the company has contended with a volatile supply and regulatory environment.
Lilly’s weekly injections Zepbound and Mounjaro will cost patients $1,899 a month, according to the Hims & Hers website. The generic liraglutide will cost $299 a month, but it requires a daily injection and can be less effective than other GLP-1 medications.
“As we look ahead, we plan to continue to expand our weight loss offering to deliver an even more holistic, personalized experience,” Dr. Craig Primack, senior vice president of weight loss at Hims & Hers, wrote in a blog post.
A Lilly spokesperson said in a statement that the company has “no affiliation” with Hims & Hers and noted that Zepbound is available at lower costs for people who are insured for the product or for those who buy directly from the company.
In May, Hims & Hers started prescribing compounded semaglutide, the active ingredient in Novo Nordisk‘s GLP-1 weight loss medications Ozempic and Wegovy. The offering was immensely popular and helped generate more than $225 million in revenue for the company in 2024.
But compounded drugs can traditionally only be mass produced when the branded medications treatments are in shortage. The U.S. Food and Drug Administration announced in February that the shortage of semaglutide injections products had been resolved.
That meant Hims & Hers had to largely stop offering the compounded medications, though some consumers may still be able to access personalized doses if it’s clinically applicable.
During the company’s quarterly call with investors in February, Hims & Hers said its weight loss offerings will primarily consist of its oral medications and liraglutide. The company said it expects its weight loss offerings to generate at least $725 million in annual revenue, excluding contributions from compounded semaglutide.
But the company is still lobbying for compounded medications. A pop up on Hims & Hers’ website, which was viewed by CNBC, encourages users to “use your voice” and urge Congress and the FDA to preserve access to compounded treatments.
With Tuesday’s rally, Hims and Hers shares are up about 27% in 2025 after soaring 172% last year.
WATCH: Hims & Hers shares tumble over concerns around weight-loss business
Meta CEO Mark Zuckerberg holds a smartphone as he makes a keynote speech at the Meta Connect annual event at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.
Manuel Orbegozo | Reuters
Meta’s head of artificial intelligence research announced Tuesday that she will be leaving the company.
Joelle Pineau, the company’s vice president of AI research, announced her departure in a LinkedIn post, saying her last day at the social media company will be May 30.
Her departure comes at a challenging time for Meta. CEO Mark Zuckerberg has made AI a top priority, investing billions of dollars in an effort to become the market leader ahead of rivals like OpenAI and Google.
Zuckerberg has said that it is his goal for Meta to build an AI assistant with more than 1 billion users and artificial general intelligence, which is a term used to describe computers that can think and take actions comparable to humans.
“As the world undergoes significant change, as the race for AI accelerates, and as Meta prepares for its next chapter, it is time to create space for others to pursue the work,” Pineau wrote. “I will be cheering from the sidelines, knowing that you have all the ingredients needed to build the best AI systems in the world, and to responsibly bring them into the lives of billions of people.”
Vice President of AI Research and Head of FAIR at Meta Joelle Pineau attends a technology demonstration at the META research laboratory in Paris on February 7, 2025.
Stephane De Sakutin | AFP | Getty Images
Pineau was one of Meta’s top AI researchers and led the company’s fundamental AI research unit, or FAIR, since 2023. There, she oversaw the company’s cutting-edge computer science-related studies, some of which are eventually incorporated into the company’s core apps.
She joined the company in 2017 to lead Meta’s Montreal AI research lab. Pineau is also a computer science professor at McGill University, where she is a co-director of its reasoning and learning lab.
Some of the projects Pineau helped oversee include Meta’s open-source Llama family of AI models and other technologies like the PyTorch software for AI developers.
Pineau’s departure announcement comes a few weeks ahead of Meta’s LlamaCon AI conference on April 29. There, the company is expected to detail its latest version of Llama. Meta Chief Product Officer Chris Cox, to whom Pineau reported to, said in March that Llama 4 will help power AI agents, the latest craze in generative AI. The company is also expected to announce a standalone app for its Meta AI chatbot, CNBC reported in February.
“We thank Joelle for her leadership of FAIR,” a Meta spokesperson said in a statement. “She’s been an important voice for Open Source and helped push breakthroughs to advance our products and the science behind them.”
Pineau did not reveal her next role but said she “will be taking some time to observe and to reflect, before jumping into a new adventure.”
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports12 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway