Account of OpenAI's metamorphosis into a billion-dollar solo enterprise
Exodus at OpenAI: Sam Altman Feels Lonely as Key Figures Bid Farewell
The inner circle of OpenAI CEO Sam Altman is shrinking: The announcement of technology chief Mira Murati's departure adds to the wave of high-ranking executives leaving the ChatGPT pioneer. Current and former team members claim that Murati was a pivotal figure, handling much of the day-to-day operations. In a post on X, the 35-year-old - often the face of the company - mentioned her desire for time and space for her personal research and thanked Altman. Her statement does not imply a departure due to conflict.
Although their journey hadn't always been smooth, Murati had briefly replaced Altman as CEO last November after the company's board unexpectedly removed him. Insiders claim that she significantly contributed to Altman's temporary replacement.
Sources close to the company reveal that Murati had previously voiced concerns about Altman's leadership style to certain members of the board. She described certain leadership tactics as psychologically abusive and hinted at her potential resignation. However, Altman was reinstated as CEO following employee and major investor Microsoft's pressure just days later.
Investor Scrutiny and Structural Changes
Murati isn't the only one to leave. Research head Ilya Sutskever, also involved in Altman's ousting, departed in May, subsequently founding a firm for advanced AI software development. Another co-founder, researcher John Schulman, joined competitor Anthropic, while co-founder and former president Greg Brockman is currently on a sabbatical until the end of the year.
Murati's departure comes at a crucial juncture. OpenAI is in the process of securing a funding round worth up to $6.5 billion. Venture capitalist Thrive Capital has agreed to invest around $1 billion. According to earlier "Wall Street Journal" reports, OpenAI is in talks with long-term investor Microsoft, as well as Apple, Nvidia, and MGX from the United Arab Emirates regarding investments.
To appeal to investors, OpenAI is rumored to be restructuring its ownership: The AI research organization aims to transition from a non-profit to a for-profit company. In doing so, it would relinquish its majority stake in the for-profit segment, according to multiple sources.
Unusual Ownership Structure
Such a move would significantly alter the startup. In the new setup, investors would no longer be subject to earning limitations on their investments, as per the "Wall Street Journal". "We remain committed to developing AI for the benefit of all," OpenAI stated. "The non-profit remains the core of our mission and will persist." Details regarding the timeline and specifics are yet to be finalized. Experts anticipate the transition to be complex and time-consuming.
Established in 2015 as a non-profit AI research organization, OpenAI added OpenAI LP as a for-profit subsidiary four years later. Major investors, like software titan Microsoft, have invested billions into the unique ownership structure. Critics fear that OpenAI's planned conversion may overlook potential negative consequences of AI. Previously, it had disbanded the team that addressed these issues. AI analyst Teo Pham acknowledges the difficulty of developing AI models, which requires substantial funds. He explains that a non-profit will struggle to accumulate such a sum, necessitating the addition of more profit-oriented investors. Unfortunately, the credibility of OpenAI suffers as a result.
Elon Musk's Opposition
Elon Musk, CEO of Tesla, has also expressed his views on the matter. On X, he writes that converting a non-profit into a for-profit is illegal. He further compares Altman to the cunning character "Littlefinger" from Game of Thrones.
The conversion could potentially benefit Altman personally, according to "Bloomberg". The CEO is expected to receive a 7% stake in the company, valued at an estimated $150 billion, making him an instant $10.5 billion richer. Altman's involvement in other startups has already made him a billionaire.
AI expert Pham asserts that OpenAI ought to demonstrate results if it aims to justify its valuation. However, the company's ability to maintain its top talents might be an issue. "But with the new structure, OpenAI could embark on an exciting new journey towards becoming one of the most influential tech companies in the world," Pham adds.
The economy of OpenAI might be significantly impacted by the wave of high-ranking executives leaving, with figures like Mira Murati and Ilya Sutskever departing. The company's efforts to restructure and transition from a non-profit to a for-profit entity, as reported by the Wall Street Journal, could also have economic implications.
