OpenAI is evaluating adjustments to its organizational structure as it seeks new investment. The artificial intelligence research company, known for its advancements in AI, is holding negotiations to obtain additional funding and wants its corporate structure to be appealing to investors.
Raising Capital and Reviewing Structure
These discussions form part of OpenAI's effort to raise several billion dollars, potentially pushing its valuation beyond $100 billion. As I reported last week, Thrive Capital is reportedly leading this funding round, with key contributions from Apple, Nvidia, and Microsoft. Since 2019, Microsoft has already invested $13 billion into OpenAI, while Apple partners with OpenAI with ChatGPT integrations in Apple Intelligence.
OpenAI's management is contemplating simplifying the company's structure to increase its attractiveness to investors. Presently, the organization issues equity through a for-profit subsidiary governed by a non-profit board. Proposed changes might include removing the existing profit cap for investors, although final decisions are yet to be made.
In June, the company was valued at $80 billion, prompting employees to questions its equity policies. OpenAI has established a policy of conducting annual tender offers to facilitate employee equity divestment. However, internal documents indicate that former employees now associated with rival companies are ineligible to participate in these offers. This restrictive policy has raised concerns among shareholders regarding the potential forfeiture of their equity holdings.
Stakeholder Considerations
Investors, partners, and employees are closely watching these potential structural changes and funding outcomes. The results may significantly affect OpenAI's operations and its standing in the competitive AI sector. OpenAI commits to maintaining transparency as it navigates these updates.
The Financial Times underscores the importance of these funding discussions and structural considerations for OpenAI's future. OpenAI also faces legal scrutiny from Elon Musk, who alleges the company has strayed from its original mission by prioritizing profits. Investors may also be seeking a less turbulent corporate situation at OpenAI.
A Year of Boardroom Drama
A year of upheaval began with CEO Sam Altman being fired by OpenAI. A week of confusion followed, with Altman seemingly ready to head up Microsoft's AI team. However, he was eventually reinstated as the head of OpenAI, while long-time investor Microsoft took a position on the board. That position was non-voting and Microsoft has since given it up.
Since then, many key figures have left OpenAI. Last month, I reported that OpenAI co-founder John Schulman is transitioning to Anthropic, the rival AI company that builds the Claude AI model. He was following fellow co-founder Greg Brockman and product lead Peter Deng out the door.
The corporate shuffle followed the disbanding of OpenAI's superalignment team, previously spearheaded by Jan Leike and Ilya Sutskever, a few months prior. The research team endeavored to overcome the technical hurdles associated with controlling superintelligent AI within a four-year timeframe.
The team comprised scientists and engineers from OpenAI's alignment division, as well as researchers from external organizations. Sutskever has also since departed the company and formed his own research lab to promote sage superintelligence.
