OpenAI considering giving Altman 7% equity stake in for-profit transition – report

OpenAI is considering giving CEO Sam Altman a 7% equity stake in the company as it works to transition itself into a for-profit benefit corporation, Bloomberg reported, citing people familiar with the matter.

This would be the first time Altman is granted ownership in the artificial intelligence startup.

The generative AI firm, which is backed by Microsoft (NASDAQ:MSFT), is working on a plan to restructure itself, tasked with turning a profit and also helping society, the people said. The company is currently set up in a structure that has both non-profit and for-profit subsidiaries.

The transition is still under discussion and a timeline has not been determined, one of the people said.

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.

A Reuters report yesterday said that the non-profit subsidiary will continue to exist and take a minority stake in the company.

Reacting to the news, Musk said on X, “You can’t just convert a non-profit into a for-profit. That is illegal.” Musk is also currently suing the company for putting profit over humanity.

Separately, three key OpenAI executives, including Chief Technology Officer Mira Murati, announced their departures via X on Wednesday.