It looks like Sam Altman will make richer off of OpenAI after all—perhaps $10.5 billion richer.
According to two fresh reports, OpenAI is aiming to change its structure to become a for-profit firm.
According to Reuters, the structure would be part of an attempt to make the firm more appealing to outside investors, and it could also mean CEO Sam Altman is in line for a large salary raise.
Bloomberg claimed that OpenAI was exploring granting Altman a 7% stock stake in the company, citing unnamed sources. According to a separate Bloomberg article, OpenAI is in talks with investors about raising financing at a $150 billion valuation. Depending on the nature of the stock award, Altman's ownership might be valued at up to $10.5 billion. This would be Altman's first ownership investment in OpenAI.
According to Reuters, the structure would be part of an attempt to make the firm more appealing to outside investors, and it could also mean CEO Sam Altman is in line for a large salary raise.
Bloomberg claimed that OpenAI was exploring granting Altman a 7% stock stake in the company, citing unnamed sources. According to a separate Bloomberg article, OpenAI is in talks with investors about raising financing at a $150 billion valuation. Depending on the nature of the stock award, Altman's ownership might be valued at up to $10.5 billion. This would be Altman's first ownership investment in OpenAI.
Bloomberg stated that a newly formed for-profit firm could be constituted as a public benefit corporation, citing knowledgeable sources. The firm would be "tasked with turning a profit while also helping society," according to the newspaper, which added that details were still being worked out.
Reuters claimed that the present nonprofit would own a minority position in the new for-profit firm, citing persons familiar with the ongoing discussions.
A venture capital investor told BI that the new structure might pave the path for a future IPO.
Reuters claimed that the present nonprofit would own a minority position in the new for-profit firm, citing persons familiar with the ongoing discussions.
A venture capital investor told BI that the new structure might pave the path for a future IPO.
The nonprofit board has overseen the corporation since its inception as a nonprofit in 2015.
According to a June story in The Wall Street Journal, Altman has no stock stake in OpenAI and receives a salary of only $65,000. In 2023, he stated that not owning a stock did not worry him because he had "enough money."
"I'm doing this because I love it," he stated during a Senate hearing that year.
Nonetheless, his investments in other enterprises have contributed significantly to his net wealth. The Journal reported earlier this year that his interests, which included investments in Stripe, Airbnb, and Reddit, were worth $2.8 billion.
OpenAI did not immediately answer to Business Insider's request for comment, but a spokeswoman told Reuters: "We are committed to developing AI that helps everyone, and we're working with our board to ensure that we're best positioned to succeed in our purpose. "The nonprofit is central to our mission and will continue to exist."
The prospective changes come after a turbulent year for the company's leadership. Altman was briefly, but eventually unsuccessfully, removed from his position by the board in November for failing to be "consistently candid in his communications," according to the statement. Several board members questioned Altman's approach to AI development and urged him to proceed with caution.
Since then, other high-profile experts have left the business, citing similar concerns about its ambitious AI development strategy. Ilya Sutskever, chief scientist, and Jan Leike, head of alignment, both left in May. Last month, President Greg Brockman revealed that he would be taking a year-long leave. On Wednesday, Chief Technology Officer Mira Murati announced her resignation, stating that she wanted to "create the time and space to do my own reflection."
One AI investor told Business Insider that the proposed changes to the company's structure might pave the road for an IPO — but in the meanwhile, they highlight the company's rocky history.
"OpenAI is both the most fascinating and the most terrifying company of our times," Matt Turck, a partner at venture firm FirstMark who has invested in AI companies such as Dataiku, Synthesia, and Ada, told Business Insider via text message. "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 believes Altman's potential payout will benefit the company. "Feels part of the necessary normalization of OpenAI into a regular corporate structure, which paves the way to an IPO."
Update, September 25, 2024 — This item has been updated with information from a Bloomberg report on the potential extent of the share in OpenAI granted to CEO Sam Altman.
According to a June story in The Wall Street Journal, Altman has no stock stake in OpenAI and receives a salary of only $65,000. In 2023, he stated that not owning a stock did not worry him because he had "enough money."
"I'm doing this because I love it," he stated during a Senate hearing that year.
Nonetheless, his investments in other enterprises have contributed significantly to his net wealth. The Journal reported earlier this year that his interests, which included investments in Stripe, Airbnb, and Reddit, were worth $2.8 billion.
OpenAI did not immediately answer to Business Insider's request for comment, but a spokeswoman told Reuters: "We are committed to developing AI that helps everyone, and we're working with our board to ensure that we're best positioned to succeed in our purpose. "The nonprofit is central to our mission and will continue to exist."
The prospective changes come after a turbulent year for the company's leadership. Altman was briefly, but eventually unsuccessfully, removed from his position by the board in November for failing to be "consistently candid in his communications," according to the statement. Several board members questioned Altman's approach to AI development and urged him to proceed with caution.
Since then, other high-profile experts have left the business, citing similar concerns about its ambitious AI development strategy. Ilya Sutskever, chief scientist, and Jan Leike, head of alignment, both left in May. Last month, President Greg Brockman revealed that he would be taking a year-long leave. On Wednesday, Chief Technology Officer Mira Murati announced her resignation, stating that she wanted to "create the time and space to do my own reflection."
One AI investor told Business Insider that the proposed changes to the company's structure might pave the road for an IPO — but in the meanwhile, they highlight the company's rocky history.
"OpenAI is both the most fascinating and the most terrifying company of our times," Matt Turck, a partner at venture firm FirstMark who has invested in AI companies such as Dataiku, Synthesia, and Ada, told Business Insider via text message. "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 believes Altman's potential payout will benefit the company. "Feels part of the necessary normalization of OpenAI into a regular corporate structure, which paves the way to an IPO."
Update, September 25, 2024 — This item has been updated with information from a Bloomberg report on the potential extent of the share in OpenAI granted to CEO Sam Altman.
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