Reuters reports that, in an effort to make itself more attractive to investors, OpenAI plans to scrap the nonprofit structure of its core business, thereby removing the authority of its board of directors, as well as granting CEO Sam Altman equity in the company.
“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 nonprofit is core to our mission and will continue to exist,” an OpenAI spokesperson told Reuters. The nonprofit portion of the business will not be done away with entirely, but instead would continue to exist and own a minority stake in the overall company.
Sam Altman could receive as much as $150 billion in equity from the restructured company. That’s quite the reversal of fortunes for Altman, who, just last November, had been fired from OpenAI by its board of directors.
Since Altman’s firing and subsequent rehiring, OpenAI has seen the departure of numerous high-level employees. Researchers Jan Leike and Ilya Sutskever both left in May, citing what they called the company’s disregard of safety guidelines in favor of building “shiny products.” Earlier this week, Chief technology officer Mira Murati also announced her resignation from the company, and was quickly followed by Chief Research Officer Bob McGrew and Barret Zoph, senior research executive, though Altman denies that their departures are due to the proposed restructuring plan.
The plan is reportedly still being vetted by the company’s lawyers and stakeholders. There is no word yet on when the restructuring might be completed.
OpenAI was founded in 2015 as a nonprofit research organization, then incorporated a for-profit subsidiary, OpenAI LP, in 2019 in order to secure funding from Microsoft. With the release of ChatGPT in 2022, OpenAI’s valuation has grown from $14 billion in 2021 to $150 billion in the most recent round of funding.
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