OpenAI, the creator of ChatGPT, is in the process of transforming its core operations into a for-profit benefit corporation, which will operate independently of its current non-profit board, according to sources familiar with the situation.
This restructuring aims to enhance the company’s appeal to potential investors.
The existing non-profit will retain a minority stake in the new for-profit entity, which may impact the organization’s approach to managing artificial intelligence (AI) risks within a revised governance framework. As part of this transition, CEO Sam Altman will receive equity in the company for the first time. Following the restructuring, OpenAI’s valuation could soar to $150 billion, particularly as it seeks to eliminate limits on investor returns.
An OpenAI spokesperson emphasized the company’s commitment to building AI for the benefit of everyone.
“The non-profit is core to our mission and will continue to exist,” the spokesperson stated.
However, the specifics of the new corporate structure remain under development, with discussions ongoing among lawyers and shareholders, and the timeline for implementation is still uncertain.
This announcement follows a tumultuous period for OpenAI, marked by several leadership changes. Mira Murati, the former chief technology officer, announced her departure from the company on Wednesday, alongside the exits of chief research officer Bob McGrew and vice president of research Barret Zoph. The restructuring comes as the company attempts to resemble a traditional startup to better position itself in the competitive AI landscape.
OpenAI was established in 2015 as a non-profit organization dedicated to AI research, and it introduced a for-profit subsidiary, OpenAI LP, in 2019 to secure investments from major companies like Microsoft. The launch of ChatGPT in late 2022 further propelled the company into the spotlight, rapidly increasing its user base and valuation. From $14 billion in 2021, OpenAI’s valuation has now surged as discussions for a new round of funding proceed.
The transition away from non-profit control has raised concerns among some in the AI safety community, who question the organization’s ability to maintain accountability while pursuing its goal of creating “safe AGI,” or artificial general intelligence. In recent months, OpenAI has also dissolved its superalignment team, which focused on mitigating long-term AI risks.
Although details surrounding Altman’s equity stake remain unclear, it is reported that he could receive around 7% of the new company, potentially translating to a stake valued at approximately $10.5 billion. Altman, who has publicly stated that he previously opted not to take equity to ensure impartiality within the board, has expressed that his primary motivation has always been his passion for the work.
The structural changes at OpenAI mirror those of other competitors like Anthropic and Elon Musk’s xAI, which are also registered as benefit corporations.
Reuters, the New York Times, Business Insider, and the Verge contributed to this report.
