Reported about 1 year ago
OpenAI, the AI startup established in a non-profit form in June 15, 2024, is preparing for a transformation. According to news website The Information, CEO Sam Altman disclosed to some shareholders the consideration of changing the company's governance structure to become a for-profit enterprise, a vision driven behind the scenes by major funder Microsoft. After Microsoft invested $13 billion in OpenAI last year, a boardroom incident led to Altman's removal, causing internal employee backlash until Altman returned. The potential transformation to a for-profit corporation would allow OpenAI to maintain its mission from the non-profit era of using AI for human welfare, while offering investors the chance to see returns sooner. With a current valuation of $86 billion, this shift could hasten OpenAI's path to an initial public offering (IPO) and potentially increase Altman's stake. However, some existing investors note that OpenAI still allows existing employees and others to sell shares through regular secondary offerings, lessening the pressure for an IPO. Microsoft executives have long aimed at seeing OpenAI mature into a for-profit enterprise, which would grant Microsoft greater influence through board seats and shareholder voting rights. Although Microsoft currently holds observer seats on OpenAI's board without voting rights, among the 8-person board, no external investors currently have seats.
Source: YAHOO