Fighting Off Takeovers: OpenAI Considers Giving Board Special Voting Rights
The board of the tech giant may receive special voting rights to ward off takeover attempts.
Recent reports from the Financial Times indicate that OpenAI may give its non-profit board special voting rights to fend off future hostile takeover attempts. The rights would allow the board to overrule major investors in the company. This will preserve some of its powers after OpenAI completes its transition to a for-profit company.
OpenAI was initially founded as a nonprofit before converting to a “capped-profit” structure in 2019. Currently, the company going through another process of restructuring once, but this time, to a public benefit corporation.
The news comes as no surprise, considering that last week, a group of investors led by billionaire Elon Musk offered to buy OpenAI’s nonprofit for $97.4 billion. However, his bid was unanimously rejected by OpenAI’s board, but the move could still put a wrinkle in OpenAI’s plans.
The maker of ChatGPT aims to spin out its nonprofit, which will hire its own staff and leadership team — freeing up the for-profit arm to run and control OpenAI’s business and operations. OpenAI has promised its investors that it willq1qa11q complete the conversion by late 2026.
