No longer nonprofit: OpenAI restructures for the future.

Top News

• DeepSeek V3: DeepSeek V3, the latest release from Chinese AI firm DeepSeek, has set a new standard for open AI models. With an impressive 671 billion parameters, it outperforms competitors like Meta’s Llama 3.1 and OpenAI’s GPT-4o in tasks such as coding, translation, and writing. What’s even more remarkable is its training cost—just $5.5 million, a fraction of what similar models require. However, DeepSeek V3’s design reflects Chinese regulatory influences, avoiding discussions on politically sensitive topics to align with “core socialist values.”

• Lyft Sues San Francisco Over $100M Tax Bill: Lyft is suing San Francisco, claiming the city pinned it with an unjust $100 million tax bill by misclassifying driver earnings as company revenue. The ride-hailing giant argues its revenue comes from driver fees—not rider fares—insisting its drivers are customers, not employees. This legal dispute is the latest development in the ongoing battle over gig worker classifications, following last year’s Proposition 22 victory that solidified drivers as independent contractors in California.

• Accounting Startup Bench Shuts Down Suddenly: Bench, a Canada-based accounting platform serving 35,000 U.S. businesses, abruptly shut down on today. Customers have until March 2025 to download their data, and the company recommends migrating to Kick, a new accounting startup. The closure shocked users, investors, and former employees, with many left scrambling for alternatives. Bench, backed by $113 million from firms like Shopify and Bain Capital, cited no clear reason for the shutdown. Former CEO Ian Crosby blamed leadership changes, calling the move “a cautionary tale” for startups.

TWiST500

OpenAI is back in the TWiST500 spotlight—and this time, it’s not about a product release or a new model. Instead, the AI giant has announced a significant transformation in its corporate structure—it’s transitioning into a Public Benefit Corporation (PBC). This change is more than just a legal update—it’s a statement about how the company plans to navigate its complex mission and massive funding needs.

Here’s the gist: OpenAI needs more money to scale. Its nonprofit model, which worked when the company was just a research lab, no longer fits. By becoming a PBC, OpenAI can raise capital the same way most companies do—through traditional investors—while still committing to its original mission of ensuring AI benefits humanity.

The nonprofit arm of OpenAI isn’t going away. Instead, it will own a significant chunk of the for-profit PBC, creating what might become one of the best-funded nonprofits ever. This setup could allow the nonprofit to focus on broader initiatives like education and public good projects while the PBC drives the development of AI systems.

The decision follows months of tension, including a failed board coup against CEO Sam Altman in 2023 and ongoing legal battles. But the restructuring seems designed to address investor concerns and keep the organization on track in the AI race. As Alex notes in his newsletter, Cautious Optimism (highly recommend btw):

And honestly, I’m right there with Alex—happy for his nerd heart and hopeful for OpenAI’s next steps.

— Maddie

A message from Micro1

Micro1 is an AI recruitment engine to hire world class engineers fast. Visit https://www.micro1.ai/twist to get 10 free AI Interviews and 2 weeks free per hire

This Week in Startups

E2065: Before kicking off the holiday season, Jason and Alex dive into discussion about approaches to population growth, Palantir's valuation and role in defense tech, and market trends like meme stocks. They dive into topics such as Michael Saylor's Bitcoin strategy, US geopolitical strategies, and government hires in emerging tech and AI policy advisory. The episode wraps with discussions on modernizing securities laws and Emil Michael's appointment in research and engineering.

E2064: Jason and Alex introduce the episode with Varun Mohan of Codium, exploring AI's role in IDE development, challenges in building 10x better experiences, and the future of no-code tools. They discuss AI's impact on developer jobs, salaries, and remote work, featuring insights from Satya Nadella on SaaS and AI agents. The episode wraps up with hiring strategies, hyper-competition in AI, VC expectations, and audience Q&A.

E2063: Jason and Alex kick off with insights on Databrick’s recent fundraising, trends in venture capital, and TikTok's ongoing legal challenges. Next, Shishir Mehrotra joins to discuss the recent Coda-Grammarly merger, sharing insights on AI-driven productivity, SaaS dynamics, and the future of AI agents in the workplace. The episode wraps with lessons from tech M&A and AI's growing role in shaping customer interactions and business efficiency.

TWiST Partner Offers

• Oracle: Oracle Cloud Infrastructure, or OCI, is a single platform for your infrastructure, database, application development, and AI needs. Save up to 50% on your cloud bill at ⁠https://w⁠⁠⁠⁠ww.oracle.com/twist

• DevSquad: Most dev agencies only offer developers. Why? Because product management is hard. Get an entire product team for the cost of one US developer plus 10% off at http://devsquad.com/twist

• Ramp: The corporate card and spend management software designed to help you save time and money. Get $250 when you join Ramp today at https://www.ramp.com/twist.

LAUNCH Cloud Kitchens Incubator

Applications are open for Cohort 2 of the LAUNCH CloudKitchens Incubator (LiCK). We're looking for food entrepreneurs who wish to expand into the ghost kitchen space or tech founders with a team and a great idea. The application and more information can be found at https://ck.launch.co/.

The TWiST500 newsletter is the new, updated, and improved TWiST Ticker.