Who Owns OpenAI? Here’s All You Need to Know

OpenAI stands out as a beacon of AI development. While its groundbreaking tool—the most prominent AI chatbot ChatGPT—is rarely out of the headlines, the board behind the company has not been without controversy.

This includes the four-day ousting of CEO Sam Altman in late 2023, the 2024 lawsuit filed by Elon Musk, accusing OpenAI of abandoning its humanitarian goals in pursuit of profit, and a massive leadership exodus, arousing concerns about the company’s future direction.

Today, we delve deeper into its background story, answering the most commonly searched questions about the company.

Table of Contents Table of Contents

1. Key Takeaways
2. Who Are OpenAI's Co-Founders?
3. When Was OpenAI Founded?
4. Who Owns OpenAI Today?
5. Is OpenAI a Public Company?
6. Dramas in the OpenAI Boardroom
7. The Bottom Line
8. FAQs
9. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. Who Are OpenAI's Co-Founders?
3. When Was OpenAI Founded?
Show Full Guide
4. Who Owns OpenAI Today?
5. Is OpenAI a Public Company?
6. Dramas in the OpenAI Boardroom
7. The Bottom Line
8. FAQs
9. References

Who Are OpenAI’s Co-Founders?

OpenAI’s foundation is built on a constellation of Silicon Valley luminaries.

Initiated in the tech heartland of San Francisco, this AI research lab has always aimed big—driven by a group of tech visionaries united by their passion for artificial intelligence. OpenAI founders include:

• Elon Musk: While better known for his ventures SpaceX and Tesla, Musk’s involvement with OpenAI was primarily financial. He has since departed from the board but remains an influential figure in AI discourse.
• Greg Brockman: Previously the CTO of Stripe, Brockman is now the Chairman & CTO of OpenAI, ensuring the organization remains at the cutting edge of AI research.
• Ilya Sutskever: A leading expert in machine learning (ML), Sutskever’s journey includes impactful stints at Google, his ex-role as the Chief Scientist at OpenAI, and the foundation of the Safe Superintelligence AI project.
• John Schulman: Before OpenAI, Schulman was primarily engaged in academic pursuits. He’s been a critical player in some of OpenAI’s leading projects, including ChatGPT.
• Wojciech Zaremba: Having previously worked on AI at Google, Zaremba co-founded OpenAI, bringing his expertise, especially in reinforcement learning to the table.
• Sam Altman: Formerly the president of startup accelerator Y Combinator, Altman joined OpenAI in its initial stages, serving as CEO.

When Was OpenAI Founded?

OpenAI’s path towards AI dominance began on December 11, 2015. The company was founded not merely as a typical startup but rather as a countermeasure against the possible monopolization of AI by tech giants.

The goal was transparent and ambitious: develop artificial general intelligence that would be a boon to humanity.

Who Owns OpenAI Today?

OpenAI’s Stakeholders

To dig down into OpenAI history, the initial phase of OpenAI saw massive support from industry tycoons, including notable contributions from Elon Musk and Peter Thiel.

Their shared dream was to ensure AI’s immense potential didn’t end up concentrated in a few hands.

As the landscape evolved, Musk’s AI ambitions were overshadowed, leading the visionary to make the strategic decision to resign from the board in 2018, avoiding any potential conflicts with his numerous ventures like Tesla and SpaceX.

The soaring ambitions and financial needs of OpenAI led to its metamorphosis from a nonprofit to a “capped-profit” for-profit entity in 2019.

This significant transition was supercharged by a colossal $1 billion investment from Microsoft, which also secured certain rights to license and utilize OpenAI’s groundbreaking technology.

Other OpenAI shareholders include a16z, Sequoia, Tigers Global, and Founders Fund.

OpenAI Inc. serves as the overarching non-profit umbrella, while the commercial aspirations are handled by OpenAI LP, its for-profit arm.

However, this approach might change soon. Reportedly, OpenAI is currently 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.

Is OpenAI a Public Company?

Despite its mammoth presence in the AI arena, OpenAI is not a public company. As a private entity, it remains immune from the rigorous regulations and quarterly pressures that public companies often grapple with.

However, there is significant market demand for OpenAI stock—so such a move can’t be ruled out in the future.

Dramas in the OpenAI Boardroom

Elon Musk Sues OpenAI for ‘Placing Profit Above Humanity’

At the end of February 2024, Elon Musk—who helped co-found OpenAI in 2015—sued OpenAI, alleging the company had replaced its goal of creating artificial intelligence to ‘benefit humanity’ for a profit-orientated motive.

Musk—who says OpenAI was set up as a not-for-profit company with the goal of creating artificial general intelligence—left the board in 2018.

The lawsuit reads: “To this day, OpenAI, Inc.’s website continues to profess that its charter is to ensure that AGI “benefits all of humanity.”

“In reality, however, OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft. Under its new board, it is not just developing but is actually refining an AGI to maximize profits for Microsoft, rather than for the benefit of humanity.”

“This case is filed to compel OpenAI to adhere to the Founding Agreement and return to its mission to develop AGI for the benefit of humanity, not to personally benefit the individual Defendants and the largest technology company in the world.”

Musk seeks a court ruling to require OpenAI to make its research available to the public and prevent the company from using ChatGPT and other assets for profit-making.

However, OpenAI hit back on Musk’s claims in an open letter, saying Musk was on-board with a for-profit venture in 2017, and wanted ‘absolute control’ over OpenAI.

OpenAI’s letter, written by the board members, includes the following statements: “In late 2017, we and Elon decided the next step for the mission was to create a for-profit entity. Elon wanted majority equity, initial board control, and to be CEO. In the middle of these discussions, he withheld funding. Reid Hoffman bridged the gap to cover salaries and operations.

“We couldn’t agree to terms on a for-profit with Elon because we felt it was against the mission for any individual to have absolute control over OpenAI. Elon soon chose to leave OpenAI, saying that our probability of success was 0, and that he planned to build an AGI competitor within Tesla.”

This eventually transpired, with Musk launching xAI in July 2023, with the company offering the chatbot Grok in November 2023.

🚨 Elon Musk warns against Sam Altman controlling the most powerful AI

"I don't trust OpenAI or Sam Altman. I don't want the world's most powerful AI controlled by someone who is not trustworthy " pic.twitter.com/YMnEvpYhsQ

— Haider. (@slow_developer) October 8, 2024

Sam Altman’s Brief Departure From OpenAI

November 17, 2023, was a surprising news day when Sam Altman was abruptly dismissed as OpenAI CEO.

Mira Murati, the company’s chief technology officer at the time, assumed the role of interim CEO. Subsequently, Emmett Shear, previously the CEO of Twitch, was appointed the new CEO.

Microsoft CEO Satya Nadella then promptly proposed a position for Altman to lead an internal AI division. Altman accepted this role, and OpenAI’s president Greg Brockman also transitioned to a position at Microsoft.

The situation took another unexpected turn when, just four days later, Sam Altman resumed his position as CEO of OpenAI despite having accepted a role at Microsoft only a few days prior.

i love openai, and everything i’ve done over the past few days has been in service of keeping this team and its mission together. when i decided to join msft on sun evening, it was clear that was the best path for me and the team. with the new board and w satya’s support, i’m…

— Sam Altman (@sama) November 22, 2023

While the board had accused Altman of not being ‘completely candid’ with the board and with rumors that Altman wanted to move faster despite AI’s potential risks around security and ethics, the two sides found their compromise, and the four-day game of CEO musical chairs was over.

OpenAI Leadership Exodus

10 Leaders Who Left OpenAI in 2024

Sam Altman Says It’s Fine, But

Commencing on leadership changes and Mira Murati’s departure in particular, Sam Altman said:

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

However, the brain drain might seem alarming and could have lasting implications for OpenAI’s future success. As the competition in the AI space intensifies, the fact that big-name researchers leave for rival AI companies or their own startups won’t go unnoticed.

The Bottom Line

OpenAI’s innovative capped-profit model offers an intriguing blend of mission-driven research and commercial pragmatism. Its history shows the structure ensures a steady flow of funds, promoting cutting-edge research, while its foundational principles remain sacrosanct.

As the AI domain witnesses rapid advancements, the flexible manner of OpenAI’s ownership and operational model equip it to seamlessly adapt and reorient, all while staying committed to democratizing AI’s myriad benefits.

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