OpenAI realignment to give non-profit over US$100 billion stake
OpenAI’s unusual structure became an issue in 2023 when Altman was suddenly fired and then, after several days of chaos, reinstated
OpenAI said it was closer to converting into a more traditional for-profit company – nearing the resolution of painful negotiations with top shareholder Microsoft and outlining terms of at least US$100 billion in equity for its non-profit arm.
Planned changes will give the existing OpenAI non-profit control over a new public benefit corporation, Chairman Bret Taylor said in a statement Thursday. And it would provide the non-profit with an equity stake that would make it “one of the most well-resourced philanthropic organisations in the world”, he wrote.
“OpenAI started as a non-profit, remains one today, and will continue to be one – with the non-profit holding the authority that guides our future,” Taylor said in the statement.
OpenAI plans to give the non-profit an equity stake of more than US$100 billion in the new corporation, which is a floor that could increase, according to a person familiar with the matter who asked not to be identified because the information is private.
That stake would give the company a roughly 20 per cent share of OpenAI – if it closes a deal to let employees sell shares at a valuation of US$500 billion. That transaction would make OpenAI the biggest start-up in the world.
OpenAI was founded in 2015 as a non-profit dedicated to advancing digital intelligence “in the way that is most likely to benefit humanity as a whole”. Both CEO Sam Altman and Elon Musk, who were OpenAI co-founders, have spoken about the potential existential risk to humans posed by advanced AI, and argued for ethical leadership in the industry.
