OpenAI to remove non-profit control, give Altman equity stake: report

OpenAI, the generative artificial intelligence backed by Microsoft (NASDAQ:MSFT), is working on a plan to restructure itself and convert itself into a for-profit benefit corporation, Reuters reported.

The company is currently set up in a structure that has both non-profit and for-profit subsidiaries. The non-profit subsidiary, which currently controls the company, will continue to exist and take a minority stake in the company, the news outlet added, citing sources familiar with the matter.

Additionally, Chief Executive Officer Sam Altman will receive equity for the first time in the for-profit company, the news outlet added, the sources added.

OpenAI was founded in 2015 by a number of individuals, including Altman and Elon Musk, as a non-profit AI research organization. In 2019, the company added OpenAI Global LLC as a for-profit subsidiary.

Musk is currently suing the company for putting profit over humanity.

Microsoft announced a “multi-billion” dollar investment into OpenAI in early 2023. The investment is believed to give Microsoft a 49% stake in the company.

Separately on Wednesday, OpenAI’s Chief Executive Mira Murati announced she is leaving the company because she wants the “time and space” to do her own exploration.

OpenAI is in the process of raising additional funding which could value the company at $150B from several investors, including Nvidia, Microsoft, Apple and others.