By Aditya Soni and Arsheeya Bajwa

Dec 27 (Reuters) - OpenAI on Friday outlined plans to

revamp its structure, saying it would create a public benefit

corporation that would make it easier to raise capital and

remove the restrictions imposed on the startup by its current

nonprofit parent.

Under the proposed structure, the ChatGPT maker's existing

for-profit arm will become a Delaware public benefit corporation

(PBC) - a company that is structured to consider the interests

of society in addition to shareholder value.

The nonprofit meanwhile will have a "significant interest"

in the PBC in the form of shares as determined by independent

financial advisers, OpenAI said in a blogpost, adding that it

would be one of the "best resourced nonprofits in history."

OpenAI started in 2015 as a research-focused non-profit

but created a for-profit unit four years later to secure funding

for the high costs of AI development. Its unusual structure gave

control of the for-profit unit to the nonprofit and was in focus

last year when Sam Altman was fired as CEO only to return days

later after employee outrage on the move.

As the expensive pursuit of artificial general intelligence,

or AI that surpasses human intelligence, heats up, OpenAI has

been looking to make changes to attract ever more investment.

Its latest $6.6 billion funding round at a valuation of $157

billion was contingent on whether the ChatGPT-maker can upend

its corporate structure and remove a profit cap for investors,

Reuters has reported.

'CRITICAL STEP'

"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 Microsoft ( MSFT )-backed startup said on Friday.

"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."

Its plans to create a PBC would align the startup with

rivals such as Anthropic and Elon Musk-owned xAI that use a

similar structure and recently raised billions in funding.

Anthropic garnered

another $4 billion investment

from existing investor Amazon.com ( AMZN ) last month, while xAI

raised around $6 billion in equity financing earlier in

December.

"The key to the announcement is that the for-profit side of

OpenAI 'will run and control OpenAI's operations and business,'"

DA Davidson & Co analyst Gil Luria said.

"This is the critical step the company needs to make in

order to continue fund raising," Luria said, although he added

that the move did "not necessitate OpenAI going public."

The startup could, however, face some hurdles in the plan.

Musk, an OpenAI co-founder who later left and is now one of

the startup's most vocal critics, is trying to stop the plan and

in August sued OpenAI and Altman. Musk alleges that OpenAI

violated contract provisions by putting profits ahead of the

public good in the push to advance AI.

OpenAI earlier this month asked a federal judge to reject

Musk's request and published a trove of messages with Musk to

argue that he initially backed for-profit status for OpenAI

before walking away from the company after failing to get a

majority equity stake and full control.

Meta Platforms ( META ) is also urging California's attorney

general to block OpenAI's planned conversion to a for-profit

company, the Wall Street Journal reported earlier this month.