Only three of OpenAI’s 11 original co-founders are still with the company: CEO Sam Altman, president Greg Brockman, and research and language team leader Wojciech Zaremba.
What happened? Did their altruistic mission to help humanity develop safe AGI get lost completely?
What does this mean for the company?
And what about the recent move of OpenAI to convert into a B-Corp instead of a nonprofit, which will skyrocket their worth to $150B?
It’s wild – that means that the 100x profit cap for investors will be removed, turning 100x into 1000x!
Let’s dive in.
The OpenAI Exodus: A Sign of Deeper Issues?
On September 26, 2024, OpenAI’s long-time CTO, Mira Murati, announced she was leaving the company.
Here’s a note she posted on X:
That same day, two more top talents said they were departing as well.
Chief Research Officer Bob McGrew:
And VP of Research Barret Zoph:
CEO Sam Altman called the leadership changes “a natural part of companies, especially companies that grow quickly and are so demanding.”
These sudden departures are definitely a trend.
Ilya Sutskever left OpenAI in May and Jan Leike quit just days later. Even Sam Altman was fired and then rehired by the board.
This wasn’t just a few individuals jumping ship. It felt like an exodus, with top executives abandoning what was, until recently, considered a dream job.
More concerningly, the executive shakeup seemed to trigger anxiety further down the ranks. Over 700 OpenAI employees — practically the entire staff — signed a letter threatening to follow Altman and Brockman to Microsoft unless the board resigned. Clearly, these OpenAI leadership changes have had a ripple effect throughout the entire company.
One theory for OpenAI leadership changes and subsequent turmoil is the tremendous financial strain the company is facing. The Information reported in July that OpenAI could lose $5 billion this year alone. This is largely due to the rising costs needed to fuel its increasingly sophisticated, resource-intensive AI models.
From Non-Profit to Corporate Giant: A Change in Values?
Here’s what’s interesting: OpenAI started as a nonprofit back in 2015 with one goal — to build a safe and beneficial AGI that benefits all of humanity.
Profits were capped at 100x, with excess returns going back to support the nonprofit — prioritizing societal benefits over financial gain. But all of that is set to change.
OpenAI is trying to convert its structure into a B-Corp, which would take it out of the realm of a nonprofit and remove that 100x cap. This means everything at OpenAI becomes worth much more, and investors stand to make a ton more profit.
For example, with the cap removed, that 100x could now be worth 1000x!
A B-Corp still does kind of signal that you’re doing something for the good of humanity. But a B-Corp is really no different than a C-Corp when it comes to taxes and the way it’s structured.
Now, with this structure change, this means that OpenAI’s nonprofit parent company would lose control and it would give Sam Altman the equity.
As of 2024, Openai has been valued at around $80 billion. This new structure could put OpenAI at a $150 billion valuation 🤯
If this structure goes through, Sam Altman does stand to receive equity for the first time in what will now be a for-profit company.
Of course, spokespeople at OpenAI are claiming that the nonprofit is still the core of its existence and that it still has the heart of its mission at the forefront.
But it’s interesting how the sudden departure of Mira Murati lines up exactly with this news, and it does feel like a sudden left turn for OpenAI to leave the nonprofit structure completely behind and embrace becoming a B-corp.
That leaves a lot of questions, in my opinion.
It’s hard to reconcile OpenAI’s recent corporate moves with its early days as an idealistic non-profit organization. This begs the question, did OpenAI stray too far from its original mission?
Now, companies absolutely do change. As an entrepreneur working with businesses, I see growth, I spearhead growth, and I see change all the time.
But what I don’t see typically is a group of close-knit founders with similar values and similar goals abruptly leaving each other.
That, to me, signals a potential that OpenAI has, in fact, left its core mission.
Now, of course, OpenAI is spearheading immense growth in the realm of AI as a whole with LLMs, and we know that their cost to run ChatGPT alone is upwards of $700,000 per day. You can’t really fund that on a non-profit.
So the reasons for this new direction could also simply be they’ve run out of money. And that could be another reason why these co-founders left.
What to Expect from OpenAI Leadership Changes
I think it will be interesting to see what happens from OpenAI in the months to come, especially with GPT-5 on the horizon.
I don’t fully know if Sam Altman is someone I would call trustworthy, but then again, he’s got some tough decisions to make every day.
These recent OpenAI leadership changes offer crucial lessons for leaders across industries, particularly within the tech landscape. They present a timely reminder of the complexities associated with managing growth, ambition, and social responsibility.
How OpenAI evolves from here is something the entire tech community will be watching very closely.
The future of OpenAI, once a beacon of innovation in the world of AI models, now hangs in the balance. Their story serves as a stark reminder that even the most promising ventures can falter without strong leadership, a clear vision, and a commitment to ethical practices.
The industry waits with bated breath to see how this leadership crisis will ultimately reshape the trajectory of OpenAI and influence the future of artificial general intelligence as a whole.
