Equity for Altman, Another Executive Exodus, What Is Going On In OpenAI?

According to media reports, OpenAI is planning to restructure its core business into a for-profit corporation, no longer under the control of a non-profit board of directors, which would make the company more attractive to investors. In addition, OpenAI's CEO Altman will receive equity in the company.

Previous media reports stated that OpenAI is negotiating a new round of financing, planning to raise more than $5 billion at a valuation of $150 billion, attracting venture capital firms such as Thrive Capital, and major technology companies like Microsoft, Apple, and Nvidia are also interested in following the investment.

At that time, there was also news that the key to OpenAI achieving a valuation of $150 billion lies in whether it can cancel the profit cap for investors. The so-called profit cap means there is a limit to the return on investors' investments, and any additional returns will go to non-profit organizations.

The latest news indicates that OpenAI is still discussing the restructuring plan with lawyers and shareholders, and the timetable for the completion of the restructuring is uncertain.

Sources revealed that after the restructuring, OpenAI will continue to exist as a non-profit organization and hold a minority stake in the newly established for-profit benefit corporation.

OpenAI's new structure will be similar to its competitors Anthropic and Musk's xAI. Both Anthropic and xAI are registered as benefit corporations, which are for-profit companies that aim to promote social responsibility and sustainable development in addition to making profits.

Sources also said that after the restructuring, the newly established for-profit company may be worth $150 billion, and Altman will receive equity for the first time.

It is currently unclear how much equity Altman will receive. He has already become a billionaire by investing in many startups.

Altman previously stated that he chose not to hold equity in OpenAI because the main directors of the board could not hold company shares. He also said he already had enough money and led OpenAI because he enjoyed the job.

Meanwhile, notably, the shake-up at the top of OpenAI continues, with Chief Technology Officer Mira Murati stating on Wednesday that she will leave OpenAI.

Murati, who has been with the startup for six and a half years, is an important technical director of OpenAI's large models, and her departure has made the industry more curious about the internal management and power changes within OpenAI.

Murati did not mention whether there is a relationship between the changes in OpenAI's management structure and her resignation. In her statement, she said that she was leaving to make time and space for her own exploration. She also emphasized that there is never a right time to leave a beloved job, but now it feels like it should be done.

Major changes in blood transfusion have occurred before Murati. In May this year, OpenAI's Chief Scientist and co-founder Ilya Sutskever left the company and founded a new artificial intelligence startup. Another co-founder, John Shulman, resigned in August and joined Oracle. OpenAI's President and co-founder Greg Brockman is still on a long-term vacation.

In addition, the safety team Superalignment responsible for the safety management of OpenAI's large models also collapsed this year. Jan Leike, the head of security responsible for Superalignment with Sutskever, resigned in May, and most of the employees were laid off one after another, which once put OpenAI's safety management into a vacuum.

The relay departure of important backbone and co-founders seems to imply that OpenAI's current development is deviating from its original intention. Leike also publicly stated that OpenAI has given priority to safety in favor of glamorous products.

This is also the biggest controversy surrounding OpenAI recently. Due to the leading position of OpenAI's products, the company's valuation has soared to $150 billion, but at the same time, the contradiction between profitability and safety is increasingly exposed, which has made many industry insiders and investors worried.

Even more intriguing is that these departing executives were all direct participants in OpenAI's palace coup in November last year. Among them, Murati was appointed as CEO by the board after Altman was suddenly fired. At that time, there were reports that the board believed that Altman was not honest and not as focused as Sutskever on ensuring that artificial intelligence would not harm humans.

However, almost all of OpenAI's employees signed an open letter afterward, calling for the recall of Altman, otherwise, they would resign in protest. After Altman returned, Murati returned to being the Chief Technology Officer, and Sutskever was removed from the board.