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Investing.com -- OpenAI, a leading artificial intelligence startup, is in the process of transitioning into a public-benefit corporation, with the aim of attracting more investors and potentially going public. The company’s ambitions are not without their challenges, as it needs to secure state approvals, a process that has proven to be complex.
The Attorney General of Delaware is currently hiring an investment bank. The bank’s role will be to independently assess the equity value that OpenAI’s nonprofit parent will hold in the new for-profit entity, as per the Wall Street Journal, citing sources familiar with the situation.
OpenAI’s goal is to convert its for-profit subsidiary into a public-benefit corporation, a move that would value the company at $300 billion, matching the valuation from its most recent funding round. This conversion is a crucial part of OpenAI’s strategy to increase its cash flow and become profitable.
However, before the restructuring can take place, OpenAI needs to establish a method for equity distribution within the new entity. The startup must demonstrate to state regulators that the nonprofit parent will receive fair compensation. It also needs to satisfy its private investors, who are vying for the largest possible stake in the new company.
Both the Delaware and California Attorneys General must approve OpenAI’s conversion. The process of securing these approvals is ongoing, and the outcome will play a major role in OpenAI’s future trajectory.
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