OpenAI to convert to for-profit as chief technology officer quits

Becoming a for-profit company would mark a major shift for the ChatGPT maker, founded to freely develop advanced AI technology to benefit humanity, as Mira Murati joins a string of departures.

Sam Altman, CEO of OpenAI, and Mira Murati. Picture: AFP

OpenAI is planning to convert from a nonprofit organization to a for-profit company at the same time it is undergoing significant personnel changes, including the resignation Wednesday of its chief technology officer, Mira Murati.

Becoming a for-profit company would mark a major shift for the ChatGPT maker, which was founded to freely develop advanced AI technology to benefit humanity, but has been morphing into a more traditional startup that sells products to consumers and businesses.

OpenAI would become a public-benefit corporation, meaning its mission is to create social good and operate in a sustainable manner, according to people with knowledge of the plans.

Under the proposed changes, the nonprofit arm of OpenAI and Chief Executive Sam Altman would own stakes in the new for-profit company. Altman hasn’t previously owned a stake in OpenAI.

A spokesman for OpenAI said, “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 restructuring is designed in part to make OpenAI more attractive to investors, as the company is currently attempting to close a funding round of up to $6.5 billion. Venture-capital firm Thrive Capital has committed about $1 billion, and OpenAI is in talks to get investments from longtime backer Microsoft, along with Apple, Nvidia, and United Arab Emirates firm MGX, The Wall Street Journal previously reported.

Unlike prior investors in OpenAI, those who put money into the current round wouldn’t have a cap on the profits they can earn. And if the restructuring doesn’t take place within two years, the new investors could ask for their money back, some of the knowledgeable people said.

Reuters previously reported on aspects of the restructuring plan.

Murati is the latest in a string of top executives and researchers to depart OpenAI.

Murati was one of Chief Executive Sam Altman’s top deputies and handled much of the day-to-day management of the company, according to current and former employees.

Over the past few months, OpenAI’s co-founder and former chief scientist Ilya Sutskever, co-founder and former top researcher John Schulman, and former top researcher Jan Leike all resigned. In addition, co-founder and former president Greg Brockman recently took a leave of absence through the end of the year.

Murati is still discussing the details of her exit with OpenAI’s leadership and hasn’t determined what her final day on the job will be, according to a person close to her.

Her departure comes at a critical moment for OpenAI, as it is attempting to close a funding round of up to $6.5bn.

Venture-capital firm Thrive Capital has committed about $1 billion and OpenAI is in talks to get investments from longtime backer Microsoft, along with Apple, Nvidia and United Arab Emirates firm MGX, The Wall Street Journal previously reported.

Murati has managed many of the teams that develop and test OpenAI’s most important tools, while Altman has spent more time on public-facing activities including speaking to government officials around the world about issues including the need for more AI data centres.

The teams Murati oversaw launched a flurry of new products in recent months, including a new model that can perform complex reasoning tasks and a voice interaction feature.

Murati was a key player in Altman’s short-lived ouster as CEO last year. She had previously approached some of OpenAI’s board members with concerns about Altman’s leadership, according to people close to the company. She described some of his leadership tactics as psychologically abusive and said she was likely to leave, according to people close to the company.

Murati was named interim CEO, but Altman returned to the job just a few days later following pressure on the board by many of the company’s employees and investors. Murati stayed on as CTO. She has said she also shared her feedback directly with Altman and didn’t support the board of directors’ decision to fire him.

Murati is exiting at the same time OpenAI faces intensifying competition from companies such Google, Meta and startup Anthropic, which was founded by former OpenAI executives. Their rival AI models are now roughly on par with OpenAI flagship model GPT-4.

In a statement posted on X, Murati touted the company’s successes in research, development and safety during her 6 1/2 years there and said, “I’m stepping away because I want to create the time and space to do my own exploration. For now, my primary focus is doing everything in my power to ensure a smooth transition, maintaining the momentum we’ve built.”

In his own statement, Altman said of Murati, “I feel tremendous gratitude towards her for what she has helped us build and accomplish, but I most of all feel personal gratitude towards her for the support and love during all the hard times. I am excited for what she’ll do next.”

Dow Jones