AI Giant OpenAI Plans Shift to For-Profit Model, Altman to Receive 7% Stake

OpenAI is planning a significant restructuring of its core business, as first reported by Reuters on Thursday. The artificial intelligence powerhouse is considering a transition to a for-profit benefit corporation, a move that would reshape its governance structure and make it more appealing to investors.

Under the proposed plan, OpenAI’s non-profit arm would retain a minority stake in the for-profit entity, while relinquishing control currently held by its non-profit board. This shift could have implications for how the company manages AI risks moving forward.

As part of the restructuring, CEO Sam Altman is expected to receive equity in the for-profit company for the first time. Bret Taylor, the company’s chair, on Thursday confirmed that the board has discussed whether to compensate Altman with equity but said that no decision has been made.

According to Bloomberg, which cited people familiar with the matter, Altman’s stake could be around 7% — a significant development for the executive who previously opted out of equity ownership. The restructured company’s valuation is estimated to reach $150 billion, with plans to remove the cap on investor returns.

The news comes amid leadership changes at OpenAI, including the departure of longtime CTO Mira Murati. Shortly after her announcement on Wednesday, Chief Research Officer Bob McGrew and Vice President of Research Barret Zoph also said they would leave the company. Altman said at a conference in Italy on Thursday that the departures were connected to the restructuring.

Related: OpenAI Co-Founder Ilya Sutskever Is Starting A New AI Firm

Founded in 2015 as a non-profit AI research organization, OpenAI added a for-profit subsidiary in 2019 to secure capital from investors like Microsoft. The company’s valuation has soared since the launch of ChatGPT in late 2022, attracting investors such as Thrive Capital and Apple.

While the restructuring may be welcomed by investors, it could raise concerns in the AI safety community about OpenAI’s commitment to its original mission of creating “safe AGI that is broadly beneficial.” The company recently dissolved its superalignment team, which focused on long-term AI risks.

The proposed changes would require approval from OpenAI’s nine-person non-profit board. The timeline for completing the restructuring remains uncertain as discussions continue with lawyers and shareholders.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

2026 Could Be Gold’s Biggest Year Yet!? | Ryan King – Equinox Gold

Gold Is Screaming Higher While Currencies Burn | Simon Ridgway – Rackla Metals

We Have the Highest-Grade Antimony Deposit in North America!? | Jim Atkinson -Antimony Resources

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Sam Altman Is Already In Discussions To Return To OpenAI

He may be down, but its not quite certain if he’s actually out. The Verge...

Sunday, November 19, 2023, 07:25:00 AM

OpenAI Secures Record $6.6 Billion Funding, Seeks Investor Exclusivity

OpenAI has raised $6.6 billion in a groundbreaking funding round that values the company at...

Thursday, October 3, 2024, 09:39:00 AM

Microsoft Confirms Multibillion Investment Into OpenAI

Microsoft Corp (NASDAQ: MSFT) has announced that it is making a significant multi-year investment in...

Monday, January 23, 2023, 03:07:00 PM

OpenAI’s GPT-4o-Powered ChatGPT Is Now More (Terrifyingly) Conversational and Life-Like

OpenAI on Monday announced GPT-4o, a new flagship generative AI model that expands on the...

Tuesday, May 14, 2024, 05:32:00 PM

OpenAI Is Now Working With Pentagon, Removes Policy Prohibition Of Using AI In Military And Warfare

OpenAI has announced a collaboration with the Pentagon on various software projects, with a focus...

Wednesday, January 17, 2024, 10:47:00 AM