OpenAI considering restructuring to for-profit, CTO Mira Murati and two top research execs depart

 OpenAI CTO Mira Murati is leaving the company after 6½ years "to create the time and space to do my own exploration," she announced in an X post on Wednesday.

CEO Sam Altman announced the departure of two other executives and made several new appointments at the end of the day.

 When OpenAI briefly ousted CEO Sam Altman, the board named Murati as interim CEO.

Also departing OpenAI are Bob McGrew, chief research officer, and Barret Zoph, VP of research, Altman said in a post on X.

• "Mira, Bob, and Barret made these decisions independently of each other and amicably," Altman's post said.
• Mark Chen will be OpenAI's new senior VP of research and Jakub Pachocki will become chief scientist, per Altman's post.

"For now, my primary focus is doing everything in my power to ensure a smooth transition, maintaining the momentum we've built," Murati wrote.

• Altman thanked Murati in response to her X announcement and said, "We'll say more about the transition plans soon, but for now, I want to take a moment to just feel thanks."
• OpenAI declined to comment beyond Altman's tweet, and a representative for Murati declined to comment beyond her statement.

 Murati's exit is resurfacing a series of existential questions that have surrounded OpenAI since last year's abrupt firing and rehiring of Altman.

• These departures come on top of a series of previous exits, including co-founder Ilya Sutskever and Jan Leike, who headed the company's long-term safety effort known as "superalignment."
• Also swirling is the question of whether a restructuring could follow a new round of investment, potentially shifting the company further from its non-profit roots.

 In March, the New York Times reported that Murati played a "pivotal role" in Altman's firing. Murati then described the story as "the previous board's efforts to scapegoat me with anonymous and misleading claims."

ChatGPT-maker OpenAI is working on a plan to restructure its core business into a for-profit benefit corporation that will no longer be controlled by its non-profit board, people familiar with the matter told Reuters, in a move that will make the company more attractive to investors.

The OpenAI non-profit will continue to exist and own a minority stake in the for-profit company, the sources said. The move could also have implications for how the company manages AI risks in a new governance structure.

Chief executive Sam Altman will also 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, sources added. The sources requested anonymity to discuss private matters.

"We remain focused on building AI that benefits everyone, and we’re working with our board to ensure that we’re best positioned to succeed in our mission. The non-profit is core to our mission and will continue to exist," an OpenAI spokesperson said.

The details of the proposed corporate structure, first reported by Reuters, highlight significant governance changes happening behind the scenes at one of the most important AI companies. The plan is still being hashed out with lawyers and shareholders and the timeline for completing the restructuring remains uncertain, the sources said.

The restructuring also comes amid a series of leadership changes at the startup. OpenAI's longtime chief technology officer Mira Murati abruptly announced her departure from the company on Wednesday. Greg Brockman, OpenAI's president, has also been on leave.

Founded in 2015 as a non-profit AI research organization, OpenAI added the for-profit OpenAI LP entity in 2019 as a subsidiary of its non-profit, securing capital from Microsoft (MSFT.O), opens new tab to fund its research.

The company captured global attention with the launch of ChatGPT in late 2022, a generative AI app that spit out human-like responses to text queries, which has become one of the fastest-growing applications in history with over 200 million weekly active users, igniting a global race to invest in AI.

Along with ChatGPT's success, OpenAI's valuation has skyrocketed from $14 billion in 2021 to $150 billion in the new convertible debt round under discussion, attracting investors such as Thrive Capital and Apple (AAPL.O), opens new tab.

AI SAFETY

The company’s unusual structure, which gives full control of the for-profit subsidiary to the OpenAI nonprofit, was originally set to ensure the mission of creating "safe AGI that is broadly beneficial," referring to artificial general intelligence that is at or exceeding human intelligence.

The structure came into focus last November during one of the biggest boardroom dramas in Silicon Valley, where members of the non-profit board ousted Altman over a breakdown in communication and loss of trust. He was reinstated after five days with overwhelming support from employees and investors.

Since then, OpenAI's board has been refreshed with more tech executives, chaired by Bret Taylor, former Salesforce co-CEO who now runs his own AI startup. Any corporate changes need approval from its nine-person non-profit board.

The removal of non-profit control could make OpenAI operate more like a typical startup, a move generally welcomed by its investors who have poured billions into the company.

However, it could also raise concerns from the AI safety community about whether the lab still has enough governance to hold itself accountable in its pursuit of AGI, as it dissolved the superalignment team that focuses on the long-term risks of AI earlier this year.

It’s unclear how much equity Altman will receive. Altman, already a billionaire from his multiple startup investments, has previously stated that he chose not to take an equity stake in the company because the board needed a majority of disinterested directors with no stake in the company. He has also said he has enough money and is doing it because he loves the work.

The new structure of OpenAI would resemble that of its major rivals Anthropic and Elon Musk's xAI, which are registered as benefit corporations, a form of for-profits that aim to promote social responsibility and sustainability in addition to making profits.

OpenAI’s chief research officer, Bob McGrew, and a research VP, Barret Zoph, left the company on Wednesday, hours after OpenAI CTO Mira Murati announced she would be departing.

CEO Sam Altman revealed the two latest resignations in a post on X Wednesday evening, along with leadership transition plans.

“Mira, Bob, and Barret made these decisions independently of each other and amicably,” he said, “but the timing of Mira’s decision was such that it made sense to now do this all at once so that we can work together for a smooth handover to the next generation of leadership.”

VP of research Mark Chen is being promoted to OpenAI’s new SVP of research, and will lead the company’s research org in partnership with Jakub Pachocki as chief scientist, Altman said.

Matt Knight, formerly head of security, will be OpenAI’s chief information security officer. Chief product officer Kevin Weil and VP of Engineering Srinivas Narayanan will continue to lead OpenAI’s applied team, which is responsible for bringing the company’s tech to both enterprise and consumer customers.

Josh Achiam, a research scientist, will be taking on a new role as head of mission alignment. Altman says he’ll be “working across the company to ensure that we get all pieces and culture right to be in a place to succeed at the mission.”

“Mark, Jakub, Kevin, Srinivas, Matt, and Josh will report to me,” Altman added. “I have over the past year or so spent most of my time on the non-technical parts of our organization; I am now looking forward to spending most of my time on the technical and product parts of the company.”

In his post, Altman tried to assure staff — and those on the outside looking in — that the leadership changes were simply the normal course of business.

“Leadership changes are a natural part of companies, especially companies that grow so quickly and are so demanding,” he said. “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.”

McGrew said simply that it was “time for [him] to take a break.”

“The last eight years of OpenAI has been a humbling and awe-inspiring journey,” he added in his own post on X. “The small nonprofit I joined in January 2017 has become the most important research and deployment company in the world … I have great confidence in [OpenAI’s] leadership.”

McGrew joined OpenAI as a member of the technical staff in 2017 and was promoted to VP of research in 2018 before assuming the role of chief research officer.

Zoph — who joined OpenAI in 2022 — said in a separate post that it “[felt] like a natural point” for him to “explore new opportunities outside of OpenAI.”

Zoph led the post-training team, which trains and improves OpenAI’s models before they’re deployed into products like ChatGPT and OpenAI’s API and to other internal OpenAI research teams.

“This is a personal decision based on how I want to evolve the next phase of my career,” he continued.

OpenAI’s departing execs may say publicly that the splits were amicable. But they come on the heels of reports that OpenAI is plotting a transition from a nonprofit-governed company to a for-profit entity, with Altman set to receive a 7% equity stake.

Against the backdrop of a reported new funding round valuing OpenAI at $150 billion, disagreements over the company’s direction may have been the straw that broke the camel’s back.

We’ll surely find out more on Thursday when OpenAI is scheduled to have an all-hands meeting.

McGrew, Zoph, and Murati are the latest high-level execs to depart OpenAI in recent months. Prominent research scientist Andrej Karpathy left OpenAI in February, Sutskever and former safety leader Jan Leike announced their departures in May, and co-founder John Schulman said last month that he was leaving to join rival Anthropic. Meanwhile, Greg Brockman, OpenAI’s president, is on extended leave through the end of the year.

Of the 13 people who helped found OpenAI in 2015, only three remain.

“Being a leader at OpenAI is all-consuming,” Altman said in his post. “On one hand it’s a privilege to … be the fastest-growing company that gets to put our advanced research in the hands of hundreds of millions of people. On the other hand, it’s relentless to lead a team through it — and they have gone above and beyond the call of duty for the company.”

OpenAI’s press office didn’t respond when asked about the latest departures.