EXCLUSIVE – Sources say OpenAI wants to give up control of nonprofit and give capital to Sam Altman

OpenAI, the maker of ChatGPT, is working on a plan to restructure its core business into a for-profit company no longer controlled by its nonprofit board of directors, people familiar with the matter told Reuters.

The nonprofit OpenAI will continue to exist and own a minority stake in the for-profit company, the sources said.

Chief Executive Officer Sam Altman will also get his first shares in the for-profit company, which could be worth as much as $150 billion after the restructuring, as it also seeks to raise caps on investor returns, the people said. The people asked not to be identified discussing private matters.

“We remain focused on developing AI that benefits everyone, and we are working with our board to ensure we are best positioned to successfully achieve our mission. The nonprofit is at the heart of our mission and will continue to exist,” an OpenAI spokesperson said.

Details of the proposed corporate structure, first reported by Reuters, show that a major leadership shakeup is underway behind the scenes at one of the world’s most important artificial intelligence companies. The plan is still being negotiated with lawyers and shareholders, and a timeline for completing the restructuring remains unclear, the people said.

The restructuring also comes amid a series of leadership changes at the startup. OpenAI’s longtime CTO Mira Murati abruptly announced her resignation from the company on Wednesday. OpenAI President Greg Brockman has also been placed on leave.

OpenAI was founded in 2015 as a nonprofit research organization in the field of artificial intelligence. In 2019, the for-profit OpenAI LP was formed as a subsidiary of the nonprofit and received capital from Microsoft to fund its research.

The company gained global attention with the launch of ChatGPT in late 2022, a creative AI application that provides human-like responses to text queries. With more than 200 million weekly active users, ChatGPT has become one of the fastest-growing applications in history and sparked a global race to invest in artificial intelligence.

Along with ChatGPT’s success, OpenAI’s valuation has risen from $14 billion in 2021 to $150 billion in the new round of convertible notes currently being discussed, attracting investors like Thrive Capital and Apple.

AI Security

The company’s unusual structure, which gives the nonprofit OpenAI full control over the for-profit subsidiary, was originally intended to ensure the mission of creating “safe, broadly useful artificial general intelligence,” that is, general AI that reaches or exceeds human intelligence.

That structure came to light last November during one of Silicon Valley’s biggest boardroom dramas, when Altman was fired by the nonprofit’s board of directors over a breakdown in communication and a loss of trust. He was reinstated five days later with overwhelming support from employees and investors.

Since then, OpenAI’s board has been updated with additional tech executives, led by Bret Taylor, the former co-CEO of Salesforce who now runs his own AI startup. All changes to the company must be approved by the nonprofit’s nine-member board.

By removing control from nonprofits, OpenAI can operate more like a typical startup, a move widely welcomed by investors who have poured billions into the company.

However, it could also raise concerns in the AI ​​security community about whether the lab still has enough leadership to hold itself accountable in its pursuit of AGI, given that the superconsensus team that deals with the long-term risks of AI was disbanded earlier this year.

It’s unclear how much capital Altman will receive. Altman, who is already a billionaire through his numerous startup investments, has previously explained that he decided not to take a stake in the company because the board needs a majority of disinterested directors who have no interest in the company. He also said he has enough money and is doing this because he loves the work.

OpenAI's new structure will be similar to that of main competitor Anthropic and Elon Musk's xAI, which are registered as non-profit companies that seek social responsibility and sustainability in addition to making a profit.