Key Points
- OpenAI’s board is considering equity compensation for CEO Sam Altman, but no final decision has been made.
- OpenAI is restructuring into a for-profit benefit corporation, which could lead to Altman receiving equity.
- The company is in talks to raise $6.5 billion, with major investors like Microsoft, Nvidia, and Apple expected to participate.
- OpenAI’s valuation could reach $150 billion, contingent on successful restructuring and removing caps on investor returns.
According to Chair Bret Taylor, OpenAI’s board is evaluating whether to offer equity compensation to CEO Sam Altman. While discussions have occurred, no final decision or specific figures have been made, Taylor confirmed on Thursday. It comes amid reports of OpenAI’s potential restructuring into a for-profit benefit corporation, which could result in Altman receiving equity for the first time.
Altman, who co-founded OpenAI in 2015, has not previously held a financial stake in the company. Despite being a billionaire from his various startup ventures, he opted not to take shares in OpenAI to ensure that the company’s board maintained a majority of disinterested directors—those without a direct financial interest in the firm.
Reports from Reuters on Wednesday revealed that the proposed restructuring aims to convert OpenAI’s core business into a for-profit entity, removing existing caps on investor returns. The company is in talks to raise $6.5 billion, with potential investors including Microsoft, Nvidia, Apple, and venture capital firms such as Thrive Capital and Khosla Ventures. OpenAI’s valuation could soar to $150 billion, but this is contingent on the success of the restructuring efforts.
The for-profit entity would no longer be controlled by OpenAI’s non-profit board, which currently governs the company. The non-profit responsible for Altman’s brief ouster in November 2023 would continue to exist and hold a minority stake in the new for-profit structure.
Amid these developments, Chief Technology Officer Mira Murati and senior executives Barret Zoph and Bob McGrew abruptly resigned on Wednesday, fueling speculation. However, during a conference in Italy on Thursday, Altman denied any connection between the leadership changes and the company’s restructuring plans.
As OpenAI continues to navigate this transformative phase, its leadership, board, and investors must align on the company’s future direction. The shift toward a for-profit model marks a significant departure from its original non-profit mission, raising questions about the company’s long-term governance and financial strategy.
