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Here’s the thing about asking investors for money: they want to see profits.
OpenAI was launched with a famously altruistic mission: to facilitate humanity by developing artificial general intelligence. But along the way, it became one of the best-funded companies in Silicon Valley. Now the tension between these two facts comes to a head.
Weeks after releasing a up-to-date model it claims can “legitimize,” OpenAI is moving toward abandoning its nonprofit status, some of its top employees are leaving, and CEO Sam Altman – who was once briefly ousted due to noticeable concerns about trust – strengthens her position as one of the most powerful people in the technology industry.
On Wednesday, OpenAI’s longtime chief technology officer, Mira Murati, announced she was leaving “to create time and space for my own exploration.” On the same day, the director of research Bob McGrew and vice president for postgraduate training Barrett Zof he said they would leave too. Altman called leadership changes “a natural part of companies” in post X after Murati’s announcement.
“Of course, I won’t pretend that it’s natural that it’s so sudden, but we’re not a normal company,” Altman wrote.
However, this is consistent with a trend of departures that has been growing over the past year following the board’s failed attempt to fire Altman. OpenAI co-founder and chief scientist Ilya Sutskever, who broke the news of the firing to Altman before publicly backtracking on his criticism, left OpenAI in May. Jan Leike, a key OpenAI researcher, left just days later, saying that “security culture and processes had taken a backseat to shiny products.” Nearly all of OpenAI’s board members at the time of the ouster, except Quora CEO Adam D’Angelo, resigned, and Altman secured his seat.
The company that once fired Altman for “inconsistent honesty in communication” was transformed by him.
OpenAI started as a nonprofit lab and later developed a for-profit subsidiary, OpenAI LP. A for-profit entity can raise funds to build artificial general intelligence (AGI), but the nonprofit’s mission is to ensure that AGI benefits humanity.
In a featherlight pink box on page dedicated to the structure of the OpenAI boardthe company emphasizes that it would be “wise” to view any investment in OpenAI “in the spirit of a donation” and that investors “see no return.”
Investor profits are capped at 100 times their value, and excess profits facilitate the nonprofit prioritize social benefits over financial gains. And if the for-profit side strays from that mission, the nonprofit side can intervene.
We have gone far beyond the “spirit of donation.”
Reports claim that OpenAI’s value is now approaching $150 billion – approximately 37.5 times higher than reported revenues — with no prospects of achieving profitability. It wants to raise funds from companies such as Thrive, Apple and an investment firm backed by Arab Emirateswith a minimum investment of a quarter of a billion dollars.
OpenAI doesn’t have deep pockets or existing established companies like Google or Meta that build competing models (though it’s worth noting that these are public companies with their own responsibilities to Wall Street). Fellow AI startup Anthropic, founded by former OpenAI researchers, is warm on OpenAI’s heels seeking up-to-date funding at a valuation of $40 billion. We have gone far beyond the “spirit of donation.”
OpenAI’s “for-profit, not-for-profit managed” structure puts it at a money-grubbing disadvantage. So it was completely logical Altman told employees earlier this month that OpenAI will restructure as a for-profit company next year. This week Bloomberg reported that the company is considering transforming into a public benefit company (like Anthropic) and that investors plan to give Altman 7 percent. shares. (Altman almost immediately denied this at a staff meeting, calling it “absurd.”)
And, most importantly, in the midst of this change, the nonprofit OpenAI he would apparently lose control. Just a few weeks after the news was announced, Murati and company disappeared.
Both Altman and Murati say the timing is coincidental and that the CTO simply wants to leave while the company is in a “growth” phase. Murati (through representatives) refused to talk Edge about sudden movement. Comparison Wojciech Zaremba, one of the last co-founders of OpenAI Departures about “the difficulties parents faced in the Middle Ages, when 6 out of 8 children died.”
Whatever the reason, this represents an almost complete change in OpenAI’s leadership since last year. Apart from Altman himself, the last remaining member seen next in September 2023 Wire cover is CEO and co-founder Greg Brockman, who supported Altman during the coup. But even he was on private leave since August and is not expected to return until next year. The same month he took leave, another co-founder and key leader, John Schulman, left to work at Anthropic.
When asked for comment, OpenAI spokeswoman Lindsay McCallum Rémy pointed out Edge to previous comments provided to CNBC.
As Leike suggested in his farewell message to OpenAI about “shiny products,” turning a research lab into a for-profit company puts many of its longtime employees in an awkward position. Many people likely joined to focus on AI research rather than creating and selling products. And while OpenAI is still a nonprofit, it’s not strenuous to guess how a for-profit version would work.