OpenAI Restructures to Attract Investors, CEO Altman to Receive Equity

OpenAI, the artificial intelligence research lab known for creating ChatGPT, is preparing a significant restructuring that could reshape its core business model, according to Reuters. Sources familiar with the matter revealed that the company is planning to transition into a for-profit benefit corporation, moving away from the control of its non-profit board in a bid to become more attractive to investors.

Despite the planned changes, the OpenAI non-profit arm will continue to exist and retain a minority stake in the newly restructured for-profit company, according to the sources. The move could have broader implications, particularly concerning how the company manages the risks associated with artificial intelligence, as a new governance framework will be implemented. Additionally, OpenAI’s CEO, Sam Altman, will receive equity in the for-profit entity for the first time. This restructured company could be valued as high as $150 billion following the changes, sources told Reuters, as it works to remove limits on investor returns.

An OpenAI spokesperson said in a statement, “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.” Although the timeline for completing the restructuring remains uncertain, the changes are being finalized with lawyers and shareholders, sources said. Reuters was the first to report on the details of this proposed corporate overhaul.

Related: OpenAI Supports California Bill for Mandatory AI Content Labels

These internal changes come as the company undergoes shifts in its leadership. On Wednesday, OpenAI’s long-standing Chief Technology Officer, Mira Murati, announced her sudden departure from the company. Additionally, Greg Brockman, OpenAI’s president, has been on leave, further adding to the company’s evolving leadership structure.

Founded in 2015 as a non-profit research organization, OpenAI transitioned into a hybrid model in 2019 by creating OpenAI LP, a for-profit entity, allowing it to raise significant investment capital. Microsoft has been a major backer, helping fund the company’s AI research. OpenAI gained global attention in late 2022 with the release of ChatGPT, an AI-powered chatbot that became one of the fastest-growing applications in history, boasting over 200 million weekly active users. The success of ChatGPT has fueled a global surge in AI investment, further driving the company’s need for additional capital.

According to Reuters, the planned restructuring will aim to balance the company’s mission of advancing AI responsibly while opening doors to new opportunities for investors and stakeholders.

Source: Reuters