Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Sam Altman Eyes $10B Stake of OpenAI’s For-Profit Shift
AI | Sep 27, 2024
Image: Freepik
Sam Altman could net a $10B Stake As OpenAI Shifts to a For Profit Future
OpenAI is considering giving Altman a 7% equity stake which could potentially be worth $10 billion profit. The news is taking place as OpenAI transforms itself from a non-profit into a for-profit public benefit corporation (known as 'B Corp') combining its nonprofit roots with expanding commercial goals which would help secure new investment.
- OpenAI is looking to raise $6.5 billion at a valuation of $150 billion, making it one of the most valuable startups in the world.
- Altman's net worth would increase by $10 billion if he is able to acquire 7% equity interest.
- The company has doubled its headcount from 770 employees in 2023 to 1,700 staff during rapid expansion.
Bret Taylor, OpenAI Board Chair:
"The board has had discussions about whether it would be beneficial to the company and our mission to have Sam be compensated with equity.”
See: Sam Altman Leaves OpenAI’s Safety Committee
Originally setup as a non-profit in 2015, OpenAI's goal was developing AI that would be safe and helpful for people. Back in 2019, the company launched a for-profit subsidiary to to meet its ambitious AI research fundraising goals, however the latest move to a for profit strategy has drawn both interest and criticism.
Leadership Departures Signals Change
More prominent executives at OpenAI have excited the company causing concern among AI experts including Mira Murati Chief Technology Officer and Bob McGrew and Chief Research Officer. The departures come after Altman was fired and then reinstated as CEO last year, which ignited controversy and company restructuring. As reported in Fortune, Altman has stated that these exits were due to individual career decisions and nothing to do with the for profit restructuring.
Sam Altman, OpenAI CEO:
“This is just about people being ready for new chapters in their lives.”
"Leadership changes are a natural part of companies, especially companies that grow so quickly and are so demanding. I obviously won't pretend it's natural for this one to be so abrupt, but we are not a normal company."
Why It Matters
The for profit transition of OpenAI is a turning point in the governance, ethics, and development of AI.
See: Apple In Investment Talks With OpenAI $100 Billion Valuation
Government, stakeholders, investors are sure to keep a watchful eye on OpenAI's manoeuvring as it will reshape the direction of a future where artificial intelligence tries to strike the balance between profit, innovation, and responsibility.
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