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Reuters reports that, in an attempt to make itself more appealing to investors, OpenAI is planning to abandon the nonprofit structure of its core business. This move will result in the removal of the authority of its board of directors and the granting of equity to CEO Sam Altman in the company.
“We are still committed to developing AI that benefits everyone, and we are working with our board to ensure that we are in the best position to achieve our mission. The nonprofit aspect is fundamental to our mission and will continue to exist,” an OpenAI spokesperson told Reuters.
It is noted that the nonprofit portion of the business will not be completely eliminated but will continue to exist and hold a minority stake in the overall company.
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Sam Altman could potentially receive as much as $150 billion in equity from the restructured company. This is a significant turnaround for Altman, as just last November, he was dismissed from OpenAI by its board of directors.
Since Altman’s dismissal and subsequent rehiring, numerous high-level employees have left the company. Researchers Jan Leike and Ilya Sutskever both departed in May, citing the company’s disregard of safety guidelines in favor of creating “shiny products.” Earlier this week, Chief Technology Officer Mira Murati also announced her resignation from the company, and was soon followed by Chief Research Officer Bob McGrew and Barret Zoph, a senior research executive. However, Altman denies that their departures are related to the proposed restructuring plan.
It is reported that the plan is currently being reviewed by the company’s lawyers and stakeholders. There is no word yet on when the restructuring will be completed.
OpenAI was established in 2015 as a nonprofit research organization. Later, in 2019, it incorporated a for-profit subsidiary, OpenAI LP, in order to secure funding from Microsoft. With the release of ChatGPT in 2022, OpenAI’s valuation has increased from $14 billion in 2021 to $150 billion in the most recent round of funding.