🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

OpenAI to move to for-profit structure, Altman to receive equity- reports

Published 09/25/2024, 09:41 PM
© Reuters
MSFT
-
AAPL
-
NVDA
-

Investing.com-- OpenAI is working on a plan to restructure its core business into a for-profit structure in a bid to make the ChatGPT maker more attractive to investors, with CEO Sam Altman to receive equity in the shift, multiple reports showed on Wednesday.

The company also announced a slew of resignations in its top management, including chief technology officer Mira Murati, chief research officer Bob McGrew and research vice president Barret Zoph. 

OpenAI’s plans to shift into a for-profit model were initially reported by Reuters, and come as the company courts investors for a $6.5 billion capital raise. Long-term investor Microsoft Corporation (NASDAQ:MSFT) is expected to participate in the round, as are Apple Inc (NASDAQ:AAPL), NVIDIA Corporation (NASDAQ:NVDA), and United Arab Emirates firm MGX, the Wall Street Journal recently reported. 

Recent reports also showed OpenAI valued at about $150 billion, making it one of the most valuable start-ups in the world.

The firm was started as a non-profit AI research organization in 2015, and added the for-profit AI entity, which manages its ChatGPT product, as a subsidiary in 2019.

The firm is now seeking to make the AI entity its core, for-profit business, with the non-profit still set to exist with a minority stake in the entity. OpenAI is also seeking to remove limits on returns to investors, reports showed.

CEO Altman will potentially receive a 7% stake in OpenAI after the for-profit shift, Bloomberg reported. Altman has become the face of OpenAI over the past two years, after the launch of ChatGPT sparked a mad race into artificial intelligence. 

Altman announced Murati, Mcgrew and Zoph’s resignations on social media platform X. He said that VP of research Mark Chen will be OpenAI’s new senior vice president of Research and will lead the company’s research wing with Jakub Pachocki as chief scientist.

OpenAI saw a string of resignations over the past year, including several of its co-founders, after top executives and the board attempted an ouster of Altman last November. 

But Altman was swiftly reappointed, while the company’s board was overhauled. 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.