OpenAI considers granting CEO Sam Altman a 7% stake amid changes.

OpenAI is exploring the possibility of awarding CEO Sam Altman a 7% equity stake as part of its transition to a for-profit organization. This potential grant aims to align Altman's interests with the company's growth and innovation objectives. As OpenAI navigates this significant shift, the decision could play a crucial role in shaping its future direction and leadership strategy.

OpenAI is in discussions to offer CEO Sam Altman a 7% equity stake and to restructure into a for-profit organization, marking a significant milestone as this would be the first time Altman receives ownership in the AI startup. Sources, who wish to remain anonymous due to the sensitive nature of the information, revealed that the company is considering becoming a public benefit corporation, focusing on profitability while also contributing positively to society. The transition is still being discussed, and no timeline has been established.

In a statement, a spokesperson emphasized OpenAI's commitment to developing AI that benefits everyone, assuring that the nonprofit aspect remains central to their mission and will continue to exist. These potential changes come amid a wave of senior management departures. Chief Technology Officer Mira Murati announced her unexpected resignation, marking another significant exit from the startup. Following Altman's sudden firing and rehiring last year, OpenAI has experienced considerable upheaval, resulting in the loss of several managers and alterations to team structures.

Murati stated on X that she is leaving to create space for her own explorations. Altman expressed deep appreciation for her contributions, stating, "It's hard to overstate how much Mira has meant to OpenAI, our mission, and to us all personally." He also indicated he would share more about transition plans with employees soon. As of now, Murati does not have a confirmed exit date and is still discussing her successor and the timeline with OpenAI leadership. She stressed her commitment to ensuring a smooth transition and maintaining the company's momentum.

Both OpenAI and Murati’s representatives declined to comment further. Founded in 2015 as a nonprofit research entity aimed at developing safe and beneficial AI, OpenAI established a for-profit subsidiary in 2019 to help fund its AI model development costs and has attracted billions in investments from Microsoft and others. Recently, Bloomberg reported that OpenAI is looking to raise $6.5 billion at a valuation of $150 billion, positioning it among the most valuable startups globally.

In keeping with its nonprofit roots, Altman had notably not taken any equity, emphasizing the company’s mission to benefit society at large. However, he has expressed in interviews a desire to have taken equity to quell ongoing inquiries about it. Reuters previously reported on OpenAI’s plans to restructure and grant Altman equity for the first time.

Murati's departure caught many employees off guard, leading to shocked reactions in the company's internal Slack channel. An engineer educated at Dartmouth and born in Albania, Murati played a pivotal role in launching significant products such as the popular ChatGPT, DALL-E, and a new advanced voice mode that enables real-time conversations with ChatGPT.

This spring, Murati faced scrutiny after stating in a Wall Street Journal interview that she was uncertain whether Sora, an unreleased text-to-video generator, had been trained on user-generated videos from platforms like YouTube, Facebook, and Instagram. Such use would violate YouTube's terms of service, as highlighted by CEO Neal Mohan.

After Altman's firing, Murati became more prominent when appointed as interim CEO but soon became part of a team advocating for Altman’s reinstatement. Her exit adds to a series of executive departures following Altman’s tumultuous tenure, with chief scientist Ilya Sutskever leaving in May and co-founder Greg Brockman taking a leave of absence until the year’s end. Researcher John Schulman also moved to AI competitor Anthropic, leaving only Altman and Wojciech Zaremba from OpenAI’s founding team.

In her post on X, which she initially shared with company employees, Murati expressed gratitude for her time at OpenAI, stating, "Together we’ve pushed the boundaries of scientific understanding in our quest to improve human well-being."

Currently, OpenAI employs around 1,700 people, significantly up from approximately 770 in late 2023. Following Murati’s announcement, Altman revealed additional management changes, noting that Chief Research Officer Bob McGrew is also departing, along with Barret Zoph, a vice president of research involved in products like ChatGPT. Zoph stated his decision to leave was challenging, expressing optimism about OpenAI's future and support for his colleagues.

Altman appointed six existing employees to report directly to him in new roles, including naming Matt Knight as chief information security officer. He noted, "I have spent most of my time on the non-technical parts of our organization; I am now looking forward to focusing more on the technical and product aspects." Altman mentioned an upcoming all-hands meeting to address employee inquiries, stating, "Leadership changes are a natural part of companies, especially ones that grow rapidly and face demanding challenges." He acknowledged the abruptness of these changes but affirmed, "We are not a normal company."

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Source; BusinessStandard‍