OpenAI was never a for-profit company, but this all might change as Sam Altman acquires more power on the startup’s board.
OpenAI, the startup behind the ongoing artificial intelligence boom, is reportedly considering an internal restructure to become a for-profit company. Reuters first reported the news as an exclusive piece, citing people familiar with the matter as sources.
The San Francisco-based enterprise became one of the world’s hottest startups in 2022 when they released DALL-E and ChatGPT. These AI-based software could generate images and texts with almost complete autonomy just through a prompt by the user.
Founded in 2015, OpenAI has been supported by multi-billion dollar investors, from Elon Musk to Nvidia’s CEO Jensen Huang. Most recently, Microsoft acquired a $10 billion stake, embedding OpenAI’s software into its proprietary search engine.
Despite the immense amount of support, however, OpenAI never abandoned its not-for-profit structure. Specifically, the startup is owned by a for-profit company, whose majority stakeholder is the not-for-profit organization called OpenAI.
As OpenAI co-founder and CEO Sam Altman said many times, OpenAI’s not-for-profit structure was necessary to ensure the safety of its creation. The safety of AI applications became a controversial issue immediately after ChatGPT’s release. Many high-level tech entrepreneurs, including OpenAI co-founder Elon Musk, warned AI could be a risk for humanity.
Elon Musk founded his own artificial intelligence company called xAI.
Stirring the pot
In the past year, OpenAI’s board flew through several windstorms, starting from the temporary ousting of Altman as CEO last November. Since then, several top-level executives of the startup left the company, including co-founder Ilya Sutskever and former safety chief Jan Leike.
Most recently, OpenAI’s Chief Technology Officer Mira Murati stepped down from the company. “After much reflection, I have made the difficult decision to leave OpenAI,” Murati posted on X on Wednesday. “There’s never an ideal time to step away from a place one cherishes, yet this moment feels right.”
In response, Altman said this was “the right time” to think about a complete restructuring of the company.
“We remain focused on building AI that benefits everyone, and we’re working with our board to ensure that we’re best positioned to succeed in our mission. The non-profit is core to our mission and will continue to exist,” an OpenAI spokesperson said.
And yet, the company is facing a fundraising cycle that could see its evaluation skyrocket to $150 billion. Sam Altman is rumored to be considering having equity in the company for the first time since its creation.
Big tech companies like Microsoft, Nvidia, and Apple are reportedly eyeing a stake in the company.
Turning OpenAI into a for-profit company would be a momentous event for AI development. For better or for worse.
