Deeply wrong, says Musk on OpenAI's for-profit shift, equity to CEO Altman

A Reuters report claimed that the US-based artificial intelligence research organization could soon restructure its business, which will not be controlled by its not-profit board in an effort to make it more attractive to investors.

Billionaire Elon Musk on September 26 disapproved ChatGPT-maker OpenAI’s move to turn its core business into a for-profit benefit corporation, calling it ‘wrong’.

A Reuters report claimed that the US-based artificial intelligence research organization could soon restructure its business, which will not be controlled by its not-profit board in an effort to make it more attractive to investors.

“This is deeply wrong,” the Tesla CEO said in a post on X. Musk was reacting to a post that accused OpenAI of misleading people.

This is deeply wrong https://t.co/RmoBX73ABC Elon Musk (@elonmusk) September 26, 2024

The post on X said, “How to make $10 billion dollars: Raise $50 million from Elon Musk to start a nonprofit, tell everyone you are doing this for the sake of humanity and raise billions, convert from non-profit to for-profit and grant yourself equity.”

Musk and OpenAI have witnessed some arguments in recent months after the former had filed a lawsuit claiming that Altman and co-founder Greg Brockman approached Musk to make an open source, non-profit company, but the startup established in 2015 is now focused on making money.

Later in June this year, Musk moved to dismiss his lawsuit accusing ChatGPT maker OpenAI and its CEO Sam Altman of abandoning the startup's original mission of developing artificial intelligence for the benefit of humanity and not for profit.

To be sure, the OpenAI non-profit will continue to exist and own a minority stake in the for-profit company, the Reuters report said, adding that the move could also have implications for how the company manages AI risks in a new governance structure.

Moreover, in another significant move, chief executive Sam Altman is also likely to receive equity for the first time in the for-profit company, which could be worth $150 billion after the restructuring as it also tries to remove the cap on returns for investors, the report said citing sources.

OpenAI is mulling these changes against the backdrop of an exodus of senior managers. Chief Technology Officer Mira Murati said on Wednesday she is leaving, a surprise move that marks the latest high-profile departure from the startup. In the months after it suddenly fired and then rehired Altman last year, OpenAI has been in a state of flux — losing multiple managers and shifting the structure of some of its teams.

OpenAI was founded in 2015 as a nonprofit research organization with the goal of building artificial intelligence that would be safe and beneficial to humanity. The company created a for-profit subsidiary in 2019 in order to help fund the high costs of AI model development, and has since drawn billions in outside investment from Microsoft Corp. and others. This month, Bloomberg reported that OpenAI is currently working to raise $6.5 billion at a $150 billion valuation, making it one of the most valuable startups in the world.