OpenAI's $150 Billion Shift: Altman Set for Equity as Restructuring Sparks Investor Interest
1min read OpenAI, a leading artificial intelligence startup, is undergoing a significant structural transformation to become a for-profit benefit corporation. This strategic shift aims to move the company away from the direct control of its existing nonprofit board, making it more appealing to investors. Notably, CEO Sam Altman is poised to receive equity in the company for the first time, with the restructuring potentially valuing the firm at approximately $150 billion.
The nonprofit arm of OpenAI will continue to exist, retaining a minority stake in the new entity. This change is expected to influence OpenAI's approach to managing AI-related risks under the new governance framework. Currently, discussions regarding the restructuring are ongoing with legal advisors and shareholders, and a timeline for completion remains uncertain.
This transition occurs amid shifts in OpenAI’s leadership. The company recently witnessed the departure of long-time CTO Mira Murati, while President Greg Brockman is on leave. Such changes add a layer of uncertainty to OpenAI's future as it navigates its restructuring.
Founded in 2015 as a nonprofit AI research entity, OpenAI established a for-profit subsidiary in 2019, securing funding from Microsoft to support its research initiatives. The launch of ChatGPT in late 2022 marked a pivotal moment for the company, leading to a significant surge in user growth and attracting substantial interest and investment globally.
OpenAI's valuation soared from $14 billion in 2021 to a projected $150 billion, appealing to investors like Thrive Capital and Apple. The company's unique structure has historically placed control of its for-profit operations with the nonprofit, an arrangement designed to advance the development of safe and broadly beneficial artificial general intelligence.
Following a governance crisis last year, where Altman was briefly ousted and then reinstated as CEO, OpenAI's board has seen the addition of several tech industry veterans. The board now requires approval for major company decisions, potentially leading OpenAI to operate similarly to traditional startups if the nonprofit control is lifted. This shift is likely to be welcomed by investors but raises concerns about maintaining adequate oversight in pursuing ambitious AI goals.
The exact percentage of Altman's potential equity in the restructured entity remains unclear. Altman has previously amassed significant wealth through startup investments and has stated a preference for not owning OpenAI equity to maintain board objectivity. OpenAI's evolving structure aligns it more closely with competitors like Anthropic and xAI, reflecting a trend toward for-profit benefit corporations that emphasize social responsibility and sustainability.