OpenAI to move to for-profit structure, Altman to receive equity- reports

OpenAI is working on a plan to restructure its core business into a for-profit structure in a bid to make the ChatGPT maker more attractive to investors, with CEO Sam Altman to receive equity in the shift, multiple reports showed on Wednesday.

The company also announced a slew of resignations in its top management, including chief technology officer Mira Murati, chief research officer Bob Mcgrew and research vice president Barret Zoph. 

OpenAI’s plans to shift into a for-profit model were initially reported by Reuters, and come as the company courts investors for a $6.5 billion capital raise. Long-term investor Microsoft Corporation (NASDAQ:MSFT ) is expected to participate in the round, as are Apple Inc (NASDAQ:AAPL ), NVIDIA Corporation (NASDAQ:NVDA ), and United Arab Emirates firm MGX, the Wall Street Journal recently reported. 

Recent reports also showed OpenAI valued at about $150 billion, making it one of the most valuable start-ups in the world.

The firm was started as a non-profit AI research organization in 2015, and added the for-profit AI entity, which manages its ChatGPT product, as a subsidiary in 2019.

The firm is now seeking to make the AI entity its core, for-profit business, with the non-profit still set to exist with a minority stake in the entity. OpenAI is also seeking to remove limits on returns to investors, reports showed.

CEO Altman will potentially receive a 7% stake in OpenAI after the for-profit shift, Bloomberg reported. Altman has become the face of OpenAI over the past two years, after the launch of ChatGPT sparked a mad race into artificial intelligence. 

Altman announced Murati, Mcgrew and Zoph’s resignations on social media platform X. He said that VP of research Mark Chen will be OpenAI’s new senior vice president of Research and will lead the company’s research wing with Jakub Pachocki as chief scientist.

OpenAI saw a string of resignations over the past year, including several of its co-founders, after top executives and the board attempted an ouster of Altman last November. 

But Altman was swiftly reappointed, while the company’s board was overhauled. 

Source: Investing.com