Reuters reports that OpenAI’s prospective corporate restructure would see the non-profit board, which controls the governance over its for-profit activities.
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OpenAI was initially founded in 2015 as a non-profit research lab but later split itself into two, with a for-profit entity (OpenAI LP) controlled by a non-profit-focused board of directors.
This move would drop the non-profit board in favour of a for-profit benefit corporation, which would require it to produce a public benefit and operate responsibly and sustainably while serving the financial interests of shareholders.
According to Reuters sources familiar with the proposed restructuring, the non-profit part of OpenAI would continue to exist while retaining a minority stake in the for-profit company.
CEO Sam Altman would receive equity in the for-profit arm, which could be worth $10 billion. Altman previously said he turned down the opportunity to take equity in the company because the OpenAI board required directors with no stake in the company.
OpenAI’s reported for-profit switch is still being finalised by lawyers and shareholders, with no timeline expected for when it could take place.
The move would put it more in line with traditional startups — and rivals, such as Anthropic, which developed Claude, and the Elon Musk-owned xAI are both benefit corps.
The startup was rumoured to be seeking $6.5 billion in new funding from investors, with potential new backers such as Apple and Nvidia.
An OpenAI spokesperson told Capacity: “We remain focused on building AI that benefits everyone and as we’ve previously shared we’re working with our board to ensure that we’re best positioned to succeed in our mission. The nonprofit is core to our mission and will continue to exist.”
The news comes amid ongoing changes at the top of OpenAI.
Mira Murti, OpenAI’s long-serving chief technology officer, announced she was departing earlier this week to “create the time and space to do my own exploration.”
I shared the following note with the OpenAI team today. pic.twitter.com/nsZ4khI06P
— Mira Murati (@miramurati) September 25, 2024
Murti follows co-founder Ilya Sutskever out the door, who departed in May to found Superintelligence Inc (SSI) a safety-first rival to OpenAI which also counts among its ranks Daniel Gross and Daniel Levy, who OpenAI’s optimisation team
The now departed Sutskever was among the alleged instigators of OpenAI’s boardroom implosion last November, which saw the firing and subsequent re-hiring of Altman as CEO.
Another OpenAI co-founder to have left this year was Andrej Karpathy, who departed for the second time in February 2024 to launch Eureka Labs, an AI education startup in the summer.
Greg Brockman, another co-founder and OpenAI’s president, has been on extended leave since August to “relax and recharge,” while John Schulman left to join Anthropic.
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