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.

Leave a Reply

Video Articles

We’re At The Start of a Great Silver Boom | Ross McElroy & Andy Bowering – Apollo Silver Corp

Equinox Gold Q1 Earnings: When Everything Goes Wrong

SSR Mining Q1 Earnings: Costs Continue To Climb

Recommended

First Majestic Makes Second Major Discovery At Santa Elena In Just A Year

PTX Metals Hits 235.1 Metres Of Copper, Nickel Mineralization In Longest Intercept To Date At W2

Related News

Under Pressure, OpenAI Scraps For-Profit Restructuring

OpenAI has abandoned its controversial plan to convert into a for-profit company and will instead...

Tuesday, May 6, 2025, 02:16:00 PM

OpenAI Doesn’t Expect to Be Profitable Until 2029

OpenAI‘s backers are a long-ish way from making money. Recent financial projections indicate the AI...

Thursday, October 10, 2024, 01:23:00 PM

OpenAI Board Found Out About the Launch of ChatGPT on Twitter

Former OpenAI board member Helen Toner revealed that the board was not informed about the...

Friday, May 31, 2024, 08:03:44 AM

OpenAI’s ChatGPT Reportedly In Talks For Tender Offer Putting Firm At $29 Billion Valuation

OpenAI, the research lab behind the ubiquitous ChatGPT chatbot, is in talks to sell current...

Friday, January 6, 2023, 11:55:00 AM

New York Times v. Microsoft, OpenAI: The Biggest Argument to Copyright Issues of Generative AI

The New York Times has filed a federal lawsuit against OpenAI and Microsoft, accusing them...

Thursday, December 28, 2023, 11:19:00 AM