From passion to profit: OpenAI’s recent restructuring shows that the AI ​​competition is about who has the deepest pockets

• This is an excerpt from the Insider Today newsletter.

OpenAI is open to some changes.

The world’s best-known startup is reportedly seeking to reorganize into a for-profit charitable corporation and end control of the company by its nonprofit board.

The process would also include Providing equity capital to CEO Sam Altmanwho currently has no stake in the startup worth $150 billion. Altman could reportedly get a 7% stake, which would be worth about $10.5 billion based on OpenAI’s new valuation.

But wait, there’s more!

The news of the possible restructuring followed Mira Murati, CTO of OpenAI announces her exit from the startup. The Tesla alum spent over six years at OpenAI, including a brief stint as interim CEO during Altman’s failed ouster last November. Employees reportedly responded to the news with a post a “WTF” emoji on Slack.

The New York Times reported on Murati in March expressed concerns to the board about Altman’s leadership style before the fall. However, Murati’s lawyer said at the time that the Times’ reporting about her involvement in Altman’s ouster was “completely false.”

And Murati wasn’t the only board departure announced Wednesday. Barret Zoph, the company’s vice president of research, and Bob McGrew, OpenAI’s chief research officer, are also leaving the startup. Altman announced on.

There have been significant changes in OpenAI’s leadership ranks in the nearly year since the board tried to oust Altman. Many of OpenAI’s C-level executives have left. The company is now has undertaken a hiring boom in other areasincluding non-technical roles in legal and advocacy work.

But such is life at OpenAI, which one VC investor described to Business Insider’s Lakshmi Varanasi as “the most fascinating and terrifying company of our time.”

This is a point that even Altman acknowledged to some extent in a memo to employees detailing the departures.

“I’m not saying it’s normal for it to happen so abruptly, of course, but we are not a normal company,” Altman wrote.

The disruption of OpenAI is happening as the AI ​​race comes into focus.

Some of OpenAI’s biggest competitors – Alphabet, Amazon, Meta – also happen to be some of the most valuable companies in the world. And given the high cost of AI development – from hardware to talent – it’s important to have deep pockets.

Therefore, it is no surprise that OpenAI wants to make itself as attractive as possible to potential investors to ensure that money continues to flow. According to Reuters, which broke the news, OpenAI’s new structure would be similar to that of rival startups Anthropic and Elon Musk’s xAI. (Musk, by the way, was happy to take a swipe at Altman about recent executive departures.)

But considering OpenAI was built on the premise of investors wouldn’t If you influence it, the move will likely still turn heads. Altman, for his part, responded to a question in Congress in 2023 about his lack of equity by saying he was “doing this because I love it.”

Of course, it’s not a crime to want to profit from your work. But OpenAI’s pivot is another example of how what it presents to the public doesn’t always seem to match what it’s trying to do privately.