According to media reports, OpenAI's new round of funding could come in the form of a convertible note that would value the company at $150 billion.

Whether it ultimately comes in the form of convertible notes will depend on OpenAI's ability to change the nonprofit structure it currently implements and remove the profit cap for investors, according to sources.

In 2019, OpenAI had restructured its organization once in order to expand its funding sources, changing from a simple nonprofit to two organizations - OpenAI LP, a for-profit, and OpenAI Inc. which was initially a nonprofit.

Moreover, OpenAI LP devised a “capped-profit” structure. Under this structure, the limited partners' return on investment is capped, and any excess return on investment is returned to the original nonprofit, OpenAI Inc. Today, OpenAI LP remains a capped-profit company and is regulated by the non-profit OpenAI Inc.

As OpenAI seeks to raise money from more investors, some want OpenAI to move to a more traditional and simpler for-profit structure, preferably one that removes the “profit cap”.

If OpenAI wants to remove the profit cap, it would need approval from OpenAI's nonprofit board of directors, which consists of CEO Sam Altman, entrepreneur Bret Taylor and seven other members.

If the reorganization is unsuccessful, OpenAI will need to renegotiate the exchange valuation of its shares with investors, which will be lower, the sources said.

The company has also had discussions with lawyers about converting its nonprofit structure into a for-profit benefit corporation, similar to the model used by its competitors Anthropic and xAI, the sources added.

It's unclear whether such a fundamental change in corporate structure will happen. Removing this restriction would result in greater returns for early investors, but it would also raise questions about OpenAI's governance and departure from its nonprofit mission.

Previously, OpenAI has stated that the “profit cap” was put in place to “incentivize them to research, develop, and deploy AGI in a way that balances commerciality, safety, and sustainability, rather than focusing on pure profit maximization.”

In OpenAI's first round of funding, investor returns were capped at 100 times the amount invested. In a 2019 blog post, the company mentioned, “We expect lower return multiples in future rounds.”

Still, even if OpenAI remains a “profit-capped” company for now, it has no shortage of investors, given its leadership in generative AI. Sources said OpenAI's latest round of funding has been hotly anticipated by investors and could be completed as soon as within the next two weeks.

Microsoft, which has invested in OpenAI, as well as venture capital firms Thrive Capital and Khosla Ventures are understood to remain involved in OpenAI's new round of funding. In addition, new investors such as NVIDIA and Apple also plan to participate in the investment. Sequoia Capital is also negotiating related investments.