OpenAI Reported to Mull For-Profit Transition, First Giving Altman Equity

TMTPost -- OpenAI is mulling transition to a for-profit organization and give its CEO Sam Altman equity of the new business.

Credit：Xinhua News Agency

OpenAI is making a restructure plan to transform its core business into a for-profit benefit corporation that will not be under the control of its non-profit board, Reuters reported Wednesday, citing people with knowledge of the matter. The OpenAI non-profit will exist and hold a minority stake in the for-profit company, which could impact how the artificial intelligence (AI) startup manage AI risks, according to the report.

OpenAI was reported to give Altman equity in the for-profit company, for the first time receiving OpenAI equity. And the company could be worth $150 billion when the restructure completes as it works to remove the cap on returns for investors, the people said.

A Bloomberg report the same day, echoed the abovementioned Reuters report. Bloomberg learned from anonymous sources that OpenAI is weighing turning into a public benefit corporation, tasked with turning a profit and also helping society. The company is also reportedly discussing giving Altman a 7% equity stake, a major shift that would for the first time granted the chief executive ownership in the startup. One of the sources said the transition plan is still under discussion and the timetable has not been finalized yet.

"We remain focused on building AI that benefits everyone, and we’re working with our board to ensure that we’re best positioned to succeed in our mission. The non-profit is core to our mission and will continue to exist," an OpenAI spokesperson said in a statement later that day.

The transition, which is deemed as a move to make OpenAI more attractive to investors, came as the company was reported to prepare a new funding round for several billions of dollars. Earlier this month, the ChatGPT-maker was reported to raise $6.5 billion for investors at a valuation of $150 billion, while such valuation is will be contingent on whether the ChatGPT-maker can upend its corporate structure and remove a profit cap for investors. The new funding was said to be led by the existing investor Thrive Capital and Microsoft, which has invested in $13 billion in total, would join in. New investors including Nvidia and Apple also reported to participate.

In addition to the reported fundraising and transition, OpenAI is also experiencing and exodus of senior management. Just three of its orginal 11 co-founders are still at the company, including Altman, Brockman who is leaving for a sabbatical untile the end of the year and Wojciech Zaremba, the Lead of Language and Code Generation.

OpenAI's Chief Technology Officer Mira Murati, a veteran working for six and a half years, said Wednesday she will leave the company. The tech chief said the reason for leave is that she wants to create the time and space to do her own exploration, without specifying the field or sector she has interests in.

Hours after Murati’s post, OpenAI CEO Sam Altman said in his post at X that two more technical leaders--Bob McGrew and Barret Zoph have decided to depart the startup. McGrew held the title of Chief Research Officer and Zoph held the title VP Research, according to their LinkedIn profiles. “Mira, Bob, and Barret made these decisions independently of each other and amicably, but the timing of Mira’s decision was such that it made sense to now do this all at once, so that we can work together for a smooth handover to the next generation of leadership,” Altman said in the post.

In the meantime, Altman unveiled new shakeup of leadershipt. Mark Chen, VP of Research will be OpenAI’s SVP of Research and will lead the research organization in partnership with Jakub Pachocki as Chief Scientist. Josh Achiam, a research scientist, is going to take on a new role as Head of Mission Alignment, working across the company to ensure that it get all pieces (and culture) right to be in a place to succeed at the mission.

The Chief Product Officer Kevin Wei and the VP of engineering Srinivas Narayanan will continue to lead OpenAI’s Applied team, which is responsible for bringing the company’s tech to both enterprise and cosumer customers. Matt Knight will be OpenAI’s Chief Information Security Officer having already served in this capacity for a long time.