OpenAI to Remove Non-Profit Control and Grant Equity to Sam Altman
Asianfin--OpenAI, the company behind ChatGPT, is planning to reorganize its core business into a for-profit benefit corporation, moving away from control by its non-profit board, Reuters reported, citing sources familiar with the matter. This change aims to increase the company’s appeal to investors, the report said.
The non-profit arm of OpenAI will continue to exist and maintain a minority stake in the new for-profit entity, the sources added. This shift in structure may also influence how the company navigates AI risks under its new governance model.
As part of the restructuring, CEO Sam Altman is set to receive equity for the first time, with the for-profit company potentially valued at $150 billion post-restructure. The company is also exploring options to lift restrictions on investor returns.
"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 non-profit is core to our mission and will continue to exist," an OpenAI spokesperson said.
The proposed corporate restructuring highlights significant internal governance shifts at one of the world’s leading AI companies. Discussions with lawyers and shareholders are ongoing, and a specific timeline for the changes remains uncertain.
The restructuring coincides with leadership transitions at OpenAI, including the sudden departure of Chief Technology Officer Mira Murati and President Greg Brockman taking a leave of absence.
Founded in 2015 as a non-profit AI research organization, OpenAI launched its for-profit subsidiary, OpenAI LP, in 2019 to attract capital, notably from Microsoft. The company gained global recognition with the release of ChatGPT in 2022, a generative AI app that quickly became one of the fastest-growing applications, amassing over 200 million weekly active users and sparking a global AI investment race.
OpenAI's valuation has surged from $14 billion in 2021 to a potential $150 billion as the company considers a new round of convertible debt, drawing interest from investors like Thrive Capital and Apple.
OpenAI’s unique structure, in which the non-profit controlled the for-profit subsidiary, was initially designed to ensure the creation of "safe AGI that is broadly beneficial," referring to artificial general intelligence that meets or exceeds human intelligence.
This structure was challenged last November during a high-profile boardroom dispute, where Altman was temporarily ousted due to communication breakdowns and trust issues. He was reinstated after five days, following strong support from employees and investors.
Since then, OpenAI has refreshed its board, which is now led by Bret Taylor, former Salesforce co-CEO, with a greater emphasis on tech executives. Any restructuring will still require approval from the non-profit’s nine-member board.
While investors generally support the move to eliminate non-profit control, the AI safety community has raised concerns about whether OpenAI will retain sufficient oversight in its pursuit of AGI, especially after dissolving its superalignment team focused on long-term AI risks earlier this year.
Altman's equity share remains uncertain. He has previously stated that he declined an equity stake to ensure that the board remained free from conflicts of interest, emphasizing that his motivation was the work itself, not financial gain.
The new corporate structure would align OpenAI more closely with competitors like Anthropic and Elon Musk’s xAI, which are structured as benefit corporations—companies designed to promote both profitability and social responsibility.