It looks like Sam Altman will get richer off of OpenAI after all
- OpenAI is working to restructure as a for-profit benefit corporation, Reuters reports.
- Its nonprofit board would retain a minority stake — and possibly pave the way for an IPO.
OpenAI is working to revamp its business structure so that it's no longer controlled by a nonprofit board, according to a new report.
The new structure is part of a move to make the company more attractive to outside investors — and it would also mean CEO Sam Altman could be in for a big payday, the report said: OpenAI was recently valued at $150 billion.
The Reuters report cited unnamed sources familiar with the matter. Those sources said the current nonprofit would hold a minority stake in the new for-profit venture. A venture capital investor told BI that the new structure could pave the way for an eventual initial public offering.
The company has been controlled until now by the nonprofit board — a relic of its original launch as a nonprofit in 2015. The details of the new structure are still being worked out, the sources familiar with the matter told Reuters.
The new corporate structure means Altman could receive equity in OpenAI. The company is seeking to remove a cap on returns for investors, sources told Reuters.
OpenAI didn't immediately respond to a request for comment from Business Insider, but a spokesperson told Reuters: "We remain focused on building AI that benefits everyone, and 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 potential changes follow a tumultuous year for the company's leadership. Last November, Altman was briefly, ultimately unsuccessfully ousted by its board for not being "consistently candid in his communications," it said, without providing details. Several board members at the time questioned Altman's approach to developing AI and wanted Altman to tread more carefully.
Since then, several high-profile researchers have left the company, citing similar concerns about its aggressive approach to developing AI. Chief scientist Ilya Sutskever and head of alignment Jan Leike left in May. Last month, President Greg Brockman announced he was taking a sabbatical until the end of the year. On Wednesday, Chief Technology Officer Mira Murati also announced her resignation, saying that she wanted to "create the time and space to do my own reflection."
One AI investor told Busines Insider that the potential changes to the company's structure could help pave the way for an initial public offering — but in the meantime, they underline what a turbulent company it's been.
"OpenAI is both the most fascinating and the most terrifying company of our times," Matt Turck, a partner at venture firm FirstMark, who's invested in AI companies including Dataiku, Synthesia, and Ada, told Business Insider by text. "By that, I mean it's doing incredibly important work, creating some of the most impressive products ever — yet seems constantly on the verge of implosion."
However, he reckons that Altman's possible payout is good for the company. "Feels part of the necessary normalization of OpenAI into a regular corporate structure, which paves the way to an IPO."