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OpenAI, a leading artificial intelligence research company, is known for its pioneering work in developing advanced AI models such as GPT-3 and DALL-E. Yet, despite its considerable prominence and influence, the issue of ownership often leads to confusion and curiosity. This article delves into OpenAI’s complex ownership structure, revealing the key players and their roles in shaping this AI powerhouse.
Who owns OpenAI?
OpenAI, a leading artificial intelligence research laboratory, has a complex ownership structure that has evolved over time. The organization was initially founded as a nonprofit, but has since transitioned to a hybrid model that includes both nonprofit and for-profit components.
Also read: What Happened at Open AI: From Leadership Change to AI Standards
Establishment and first ownership:
OpenAI was founded in December 2015 by a group of prominent individuals including Elon Musk, Sam Altman, Ilya Sutskever, Greg Brockman, Elon Musk, Reid Hoffman, Jessica Livingston, Peter Thiel, Amazon Web Services (AWS), Infosys and YC Research. These founders have committed more than $1 billion to the company, with Musk being the largest donor. However, Elon Musk withdrew from an active role in 2018 and remained a donor and advisor.
Transition to a hybrid model
In 2019, OpenAI moved to a hybrid model, creating a for-profit entity called OpenAI LP, which is controlled by the original nonprofit OpenAI Inc. This structure is designed to raise capital while maintaining focus on the organization’s mission to ensure that Artificial General Intelligence benefits all humanity.
OpenAI Inc., a non-profit research arm:
Initially founded as a non-profit research company, OpenAI aimed to create safe and useful artificial general intelligence (AGI) while avoiding the concentration of power. However, the resource-intensive nature of AI research led to the creation of a for-profit branch in 2019.
OpenAI LP, a for-profit subsidiary:
OpenAI LP is the for-profit subsidiary of OpenAI Inc. This allows the company to attract larger investments needed to finance research and development. OpenAI Inc. however, retains control of OpenAI LP and ensures that OpenAI LP’s mission and ethical principles remain central to all efforts.
Also read: OpenAI competitors: who is battling OpenAI for AI supremacy?
Current ownership structure
Today, ownership of OpenAI is divided between Microsoft, which owns 49%, other stakeholders who collectively own another 49%, and the original OpenAI nonprofit foundation. The non-profit organization OpenAI Inc. is the sole controlling shareholder of OpenAI LP, which, despite being a for-profit company, retains a formal fiduciary responsibility to OpenAI Inc.’s non-profit charter.
The role of investors:
Microsoft:
In 2019, Microsoft invested $1 billion in OpenAI LP, acquiring a minority stake. This significant investment provided a critical funding boost for OpenAI’s research and development efforts.
Other important investors:
OpenAI LP is also backed by several other prominent investors, including Khosla Ventures, Reid Hoffman, and several of the company’s founders. Unfortunately, the exact details of their ownership interests remain secret due to the company’s private ownership status.
Leadership changes and controversies
OpenAI’s leadership has seen significant changes and controversies. Sam Altman, one of the co-founders, was CEO of OpenAI until he was ousted in November 2023. However, just days later, he was reinstated as CEO after a tumultuous period of internal strife. The board of directors, which has ultimate control over OpenAI, has also seen changes, with new members including Bret Taylor, Larry Summers and Adam D’Angelo.
Also read: Who are OpenAI board members?
The direction:
Bret Taylor, Chairman:
Bret Taylor, current co-CEO of Salesforce, chairs the OpenAI board and provides leadership and strategic direction for the company.
Sam Altman, CEO:
Sam Altman, a leading technology entrepreneur and investor, serves as CEO of OpenAI. He plays a key role in managing the company’s activities and driving its research agenda.
Sam Altman’s firing and return:
In November 2023, Sam Altman was removed from his position as CEO by the board, leading to a period of uncertainty and speculation about OpenAI’s future. However, Altman was reinstated as CEO within a few days, underscoring the dynamic nature of leadership within OpenAI.
Current leadership structure:
Currently, OpenAI’s leadership team consists of:
- Bret Taylor (chairman)
- Sam Altman (CEO)
- Greg Brockman (chairman)
- Mira Murati (CTO)
- Ilya Sutskever (CSO)
OpenAI: a shared ownership model:
Therefore, OpenAI’s ownership structure is best described as a complex and evolving model with both non-profit and for-profit elements. While OpenAI Inc. retains ultimate control, Microsoft and other investors share ownership of OpenAI LP and play a critical role in supporting its research and development efforts.
The company’s leadership structure has also undergone recent transformations, highlighting the dynamic nature of OpenAI’s internal organization. Despite this complexity, however, OpenAI remains focused on its primary mission: advancing the safe and responsible development of artificial general intelligence for the benefit of all humanity.
Conclusion
In conclusion, ownership of OpenAI is shared between Microsoft, other stakeholders, and the original nonprofit. The organization’s hybrid structure allows it to raise capital while maintaining its mission of ensuring the broad benefits of artificial general intelligence. However, the complex ownership and governance structure has also led to significant leadership controversies.