ChatGPT maker OpenAI is losing even more executives — right as Reuters reports that it’s looking to restructure its core business and wrestle control away from its non-profit board.
The restructuring could turn the already for-profit company into a more traditional startup and give CEO Sam Altman even more control — including likely equity worth billions of dollars.
As Reuters points out, the move will likely make the company more attractive to investors, who have already poured many billions into it.
But OpenAI executives are seemingly far less impressed with the plans. On Wednesday afternoon, OpenAI’s chief technology officer Mira Murati, VP of research Barret Zoph, and chief research officer Bob McGrew all announced they would be leaving the company, suggesting major inner turmoil at the company.
In a statement posted to X, Altman downplayed the major shakeup.
“Leadership changes are a natural part of companies, especially companies that grow so quickly and are so demanding,” he wrote. ” I obviously won’t pretend it’s natural for this one to be so abrupt, but we are not a normal company, and I think the reasons Mira explained to me (there is never a good time, anything not abrupt would have leaked, and she wanted to do this while OpenAI was in an upswing) make sense.”
According to Reuters‘ sources, details regarding the restructuring are still being finalized behind the scenes and there’s no official timeline until the restructuring comes into effect. Nonetheless, it’s yet another instance that highlights the ongoing power struggle at the top of the company’s executive board. Who could forget the time when the company abruptly fired Altman only to rehire him five days later?
OpenAI hasn’t been a primarily non-profit company since 2019, when it added a for-profit arm to its organizational structure. The move proved controversial enough for co-founder and multi-hyphenate billionaire Elon Musk to quit in disgust.
Since then, it has raised billions of dollars in funding, including a juicy $13 billion contract with corporate tech giant Microsoft. It has seen its valuation rocket from just $14 billion in 2021 to potentially $150 billion lately, according to its latest financing efforts.
Meanwhile, the company is burning through cash at an alarming rate. According to a July analysis by The Information, OpenAI could lose as much as $5 billion this year as it rapidly expands the infrastructure needed to sustain increasingly electricity- and water-hungry AI models.
OpenAI’s non-profit arm was originally created to ensure that it was developing a “safe” artificial general intelligence, an AI that surpasses human capabilities and that “benefits all of humanity,” according to its mission statement.
In a statement to Reuters, an OpenAI spokesperson claimed that the “non-profit is core to our mission and will continue to exist.” But whether it’ll have any sway in a largely Altman-controlled for-profit governing structure remains unclear at best.
And its commitment to holding itself accountable has been shaky at best. In May, the company dissolved its safety-oriented Superalignment team only to put Altman in charge of a replacement safety board.
The former Superalignment team was created to ensure that future powerful AIs are aligned with humanity if they were to ever become clever enough to outsmart us. Many former members of this team have voiced concerns over OpenAI’s ability to do just that after quitting.
Whether OpenAI will ever get even close to realizing AGI remains to be seen. The company’s current crop of AI models are still wrestling with the same problems earlier iterations have also suffered from, including “hallucinations,” and an inability to make sense of data in a logically sound way.
And the pressure is on — with a valuation of well over $100 billion, investors are likely going to ask some big questions that Altman and the other remaining executives may struggle to answer in the future.
“There’s an exodus of executives from OpenAI, the company is burning billions a year, its enterprise offerings are widely criticized, Sam Altman appears to spend half of his day doing podcasts, and there is still no proven business model,” author and tech columnist Brian Merchant tweeted. “This company is seeking a $150 billion valuation.”
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