OpenAI to Transition to For-Profit Structure, Altman Set to Receive Equity – Reports

OpenAI is planning to reorganize its core operations into a for-profit structure to attract more investors, according to multiple reports released on Wednesday. As part of this transition, CEO Sam Altman is expected to receive equity in the new structure.

The company also announced several high-profile resignations within its management team, including Chief Technology Officer Mira Murati, Chief Research Officer Bob McGrew, and Research Vice President Barret Zoph.

Reports indicate that OpenAI’s move towards a for-profit model is linked to its efforts to raise $6.5 billion in funding. Microsoft Corporation, a long-time investor, is anticipated to participate in this funding round, along with other major players such as Apple Inc., NVIDIA Corporation, and a United Arab Emirates-based firm.

OpenAI has recently been valued at approximately $150 billion, solidifying its status as one of the most valuable startups globally. Initially founded as a non-profit AI research organization in 2015, the company introduced a for-profit subsidiary to manage its ChatGPT product in 2019.

The current restructuring aims to establish the for-profit AI entity as the main focus of the organization, while the non-profit will continue to exist with a minority ownership stake. OpenAI is actively looking to lift restrictions on returns for its investors as part of this transition.

After the for-profit shift, CEO Altman could potentially hold a 7% stake in OpenAI. Over the past two years, Altman has emerged as the prominent figure representing OpenAI, particularly following the explosive interest in artificial intelligence after the release of ChatGPT.

Altman shared the news about the resignations via social media, announcing that VP of Research Mark Chen will take over as the new Senior Vice President of Research, with Jakub Pachocki serving as Chief Scientist.

The company has experienced a series of resignations over the past year, including those of several co-founders, particularly after an attempted ousting of Altman in November. However, Altman was quickly reinstated, and the board underwent significant changes.