OpenAI is reportedly “pursuing” plans to desert its nonprofit roots and restructure as a for-profit entity – a move that might insulate Sam Altman and his allies from “hostile takeovers” or objections over their leadership.
The firm’s board is planning to restructure as a public profit corporation – an unusual structure that might have its leaders weigh each societal impact and profit when making decisions, The Financial Times reported. Rival firms like Elon Musk’s xAI and Amazon-backed Anthropic use the structure.
If the move is finalized, the nonprofit entity that has overseen OpenAI because it was founded in 2015 will live on, but it can not be in charge of the firm’s operations.
The restructuring would allow OpenAI to take a “multipronged approach to fiduciary obligations” and a “secure harbor” from any activist investors or attempts to challenge Altman, a private with knowledge of the talks told the FT.
Altman was famously fired by the firm’s nonprofit board of directors last fall. Altman returned as CEO in a matter of days as a part of talks that saw nearly the entire previous board members resign.
Last week, OpenAI raised a whopping $6.6 billion in a fundraising round that valued the corporate at $157 billion. That’s despite the incontrovertible fact that the firm has burned through money at a rapid clip while developing its next AI models.
Sources familiar OpenAI’s considering told the outlet that no final decisions have been made and that the restructuring would more likely to take time to finish. The nonprofit entity, which might gain a stake in OpenAI’s for-profit corporation, isn’t expected to be run by Altman.
“OpenAI desires to keep that societal licence, with each a mission and an obligation, while creating cutting-edge technology,” a source told FT.
The Post has reached out to OpenAI for comment.
Reports about OpenAI’s restructuring discussions emerged last month on the identical day that chief technology officer Mira Murati and two other top executives resigned from their posts.
Their exits were the newest in a major exodus of top OpenAI executives who’ve resigned or taken prolonged leaves because the start of the 12 months.
OpenAI has said that it’s “focused on constructing AI that advantages everyone, and we’re working with our board to be sure that we’re best positioned to reach our mission.”
“The non-profit is core to our mission and can live on and thrive,” the corporate said in an announcement when reports a few potential restructuring first surfaced last month.
The fundraising round was led by Josh Kushner’s Thrive Capital, with other participants including Microsoft, AI chip supplier Nvidia, Khosla Ventures, SoftBank, Abu Dhabi’s state-backed MGX fund, Altimeter Capital and Fidelity.
The potential restructuring was said to be a sticking point for investors, which might reportedly renegotiate OpenAI’s valuation – or receive their a refund entirely – if the shift isn’t complete inside two years, Reuters reported.
Altman – who has faced scrutiny over what critics have described as an aggressive and domineering leadership style – is anticipated to receive an equity stake within the restructured OpenAI, though the precise terms remain unclear.
During a staff meeting last month, Altman described reports that his stake could approach 7% — which can be valued at greater than $10 billion – as “ludicrous.”
Elsewhere, some critics have accused Altman of prioritizing rapid advancement over safety while constructing advanced AI that might potentially pose a threat to humanity.
OpenAI is reportedly “pursuing” plans to desert its nonprofit roots and restructure as a for-profit entity – a move that might insulate Sam Altman and his allies from “hostile takeovers” or objections over their leadership.
The firm’s board is planning to restructure as a public profit corporation – an unusual structure that might have its leaders weigh each societal impact and profit when making decisions, The Financial Times reported. Rival firms like Elon Musk’s xAI and Amazon-backed Anthropic use the structure.
If the move is finalized, the nonprofit entity that has overseen OpenAI because it was founded in 2015 will live on, but it can not be in charge of the firm’s operations.
The restructuring would allow OpenAI to take a “multipronged approach to fiduciary obligations” and a “secure harbor” from any activist investors or attempts to challenge Altman, a private with knowledge of the talks told the FT.
Altman was famously fired by the firm’s nonprofit board of directors last fall. Altman returned as CEO in a matter of days as a part of talks that saw nearly the entire previous board members resign.
Last week, OpenAI raised a whopping $6.6 billion in a fundraising round that valued the corporate at $157 billion. That’s despite the incontrovertible fact that the firm has burned through money at a rapid clip while developing its next AI models.
Sources familiar OpenAI’s considering told the outlet that no final decisions have been made and that the restructuring would more likely to take time to finish. The nonprofit entity, which might gain a stake in OpenAI’s for-profit corporation, isn’t expected to be run by Altman.
“OpenAI desires to keep that societal licence, with each a mission and an obligation, while creating cutting-edge technology,” a source told FT.
The Post has reached out to OpenAI for comment.
Reports about OpenAI’s restructuring discussions emerged last month on the identical day that chief technology officer Mira Murati and two other top executives resigned from their posts.
Their exits were the newest in a major exodus of top OpenAI executives who’ve resigned or taken prolonged leaves because the start of the 12 months.
OpenAI has said that it’s “focused on constructing AI that advantages everyone, and we’re working with our board to be sure that we’re best positioned to reach our mission.”
“The non-profit is core to our mission and can live on and thrive,” the corporate said in an announcement when reports a few potential restructuring first surfaced last month.
The fundraising round was led by Josh Kushner’s Thrive Capital, with other participants including Microsoft, AI chip supplier Nvidia, Khosla Ventures, SoftBank, Abu Dhabi’s state-backed MGX fund, Altimeter Capital and Fidelity.
The potential restructuring was said to be a sticking point for investors, which might reportedly renegotiate OpenAI’s valuation – or receive their a refund entirely – if the shift isn’t complete inside two years, Reuters reported.
Altman – who has faced scrutiny over what critics have described as an aggressive and domineering leadership style – is anticipated to receive an equity stake within the restructured OpenAI, though the precise terms remain unclear.
During a staff meeting last month, Altman described reports that his stake could approach 7% — which can be valued at greater than $10 billion – as “ludicrous.”
Elsewhere, some critics have accused Altman of prioritizing rapid advancement over safety while constructing advanced AI that might potentially pose a threat to humanity.
