By Rachel Metz, Dina Bass, Ed Ludlow and Shirin Ghaffary
OpenAI is discussing giving chief executive officer Sam Altman a 7 per cent equity stake in the company and restructuring to become a for-profit business, a major shift that would mark the first time Altman is granted ownership in the artificial intelligence startup.
The company is considering becoming a public benefit corporation, tasked with turning a profit and also helping society, according to a source familiar with the discussions who wasn’t authorised to speak publicly about them. The transition is still under discussion and a timeline has not been determined.
Sam Altman founded the company in 2015 as a non-profit research organisation with the goal of building artificial intelligence that would be safe and beneficial to humanity.Credit: Bloomberg
In a statement, OpenAI’s chairman Bret Taylor confirmed the board has discussed whether to compensate Altman with equity but no decision has been made.
OpenAI is mulling the changes against the backdrop of an exodus of senior managers. Chief technology officer Mira Murati said on Wednesday she is leaving, a surprise move that marks the latest high-profile departure from the startup. In the months after it suddenly fired and then rehired Altman last year, OpenAI has been in a state of flux — losing multiple managers and shifting the structure of some of its teams.
OpenAI was founded in 2015 as a non-profit research organisation with the goal of building artificial intelligence that would be safe and beneficial to humanity. In keeping with those origins, Altman had not taken equity, stressing the company was meant to broadly benefit society and that he had enough money.
Yet as the value of the business soared, it’s been increasingly difficult to stick with those ideals. In 2019, the company created a for-profit subsidiary to help fund the high costs of AI model development, and has since drawn billions in outside investment from Microsoft and others.
OpenAI is currently working to raise $US6.5 billion ($9.4 billion) at a $US150 billion valuation, which would make it one of the most valuable start-ups in the world, Bloomberg reported this month. That boost on top of the possible new equity could add more than $US10 billion ($14.5 billion) to Altman’s net worth, according to the Bloomberg Billionaires Index, vaulting him into the ranks of the world’s richest people.
The possible equity holding, which is still under negotiation and could change or not materialise, would give Altman an ongoing financial stake in the success of OpenAI. Many investors favour the idea of a founder owning at least part of the businesses they run. Altman has also occasionally said in interviews that he wished he had taken equity so that people would stop asking him about it. Reuters earlier reported on OpenAI’s plan to restructure and give Altman equity for the first time.
Altman said the executive departures were not related to the restructuring. “I saw some stuff that this was related to a restructure, that’s totally not true,” Altman said on stage at the Italian Tech Week in Turin on Thursday. “This is just about people being ready for new chapters in their lives.”
In a statement on X, Murati said she was “stepping away because I want to create the time and space to do my own exploration”. In response, Altman expressed “tremendous gratitude” for Murati’s contributions, writing, “It’s hard to overstate how much Mira has meant to OpenAI, our mission, and to us all personally.” He also said that he would share more with employees about transition plans soon.
OpenAI chief technology officer Mira Murati is the latest high-profile exit.Credit: Bloomberg
Murati does not yet have an exit date at the company, according to a person familiar with the matter. She is still speaking with OpenAI’s leadership about plans for her replacement, including the timeline. In the post, she wrote, “For now, my primary focus is doing everything in my power to ensure a smooth transition, maintaining the momentum we’ve built.”
Representatives for OpenAI and Murati declined to provide further comment.
On Wednesday, many employees were shocked by the announcement of Murati’s departure. On the company’s internal Slack channel, multiple OpenAI employees responded to the news with a “WTF” emoji, according to a person familiar with the matter.
Murati, an Albanian-born Dartmouth-educated engineer, played a key role in shepherding major product releases, including OpenAI’s popular ChatGPT chatbot, its DALL-E image generation software, and its recently released advanced voice mode that lets users talk to ChatGPT in essentially real time.
This spring, Murati came under fire for saying in an interview with the Wall Street Journal that she wasn’t sure whether Sora, a text-to-video generator that OpenAI has shown off but not yet released, was trained on user-generated videos from YouTube, Facebook and Instagram. Such a use of YouTube content would be an infraction of the platform’s terms of service, YouTube CEO Neal Mohan later told Bloomberg.
After Altman’s ouster, Murati gained a higher profile when she was appointed as interim CEO — but she quickly joined a group of executives pushing for Altman to be reinstated.
Her departure marks the latest executive exit at OpenAI since Altman’s firing and rehiring last year. Ilya Sutskever, the company’s chief scientist, left in May. In August, co-founder Greg Brockman said he would go on leave until the end of the year and researcher John Schulman left for AI rival Anthropic. The departures leave only two members of OpenAI’s original founding team at the startup: Altman and Wojciech Zaremba.
In her post on X, the text of which she earlier sent to employees at the company, Murati said she was grateful to have worked with the OpenAI team. “Together we’ve pushed the boundaries of scientific understanding in our quest to improve human well-being,” she wrote.
The company currently has about 1700 employees, more than double the roughly 770 it had in late 2023.
Altman subsequently announced additional changes to OpenAI’s management. In a memo to OpenAI he also posted to X on Wednesday, he wrote that chief research officer Bob McGrew is leaving, along with Barret Zoph, a vice president of research who worked on products like ChatGPT.
In his own post on X, Zoph said it was a “very difficult decision” to leave and he plans to “explore new opportunities” outside the company.
“OpenAI is doing and will continue to do incredible work and I am very optimistic about the future trajectory of the company and will be rooting everybody on,” he wrote.
Altman also named six existing employees who will now report directly to him, some in new roles, including Matt Knight as chief information security officer.
“I have over the past year or so spent most of my time on the non-technical parts of our organisation; I am now looking forward to spending most of my time on the technical and product parts of the company,” the CEO wrote, adding that there will be an all-hands meeting Thursday to answer employee questions.
“Leadership changes are a natural part of companies, especially companies that grow so quickly and are so demanding,” Altman wrote. “I obviously won’t pretend it’s natural for this one to be so abrupt, but we are not a normal company.”
Bloomberg
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