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

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In the ever-evolving landscape of artificial intelligence, one organization has consistently stood out as a beacon of AI development: OpenAI.

While its groundbreaking tools — ChatGPT as the most prominent AI chatbot — are 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, and the 2024 lawsuit filed by Elon Musk, accusing OpenAI of abandoning its humanitarian goals in pursuit of profit.

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

Key Facts

  • OpenAI, co-founded by industry stalwarts in 2015, was envisioned as a beacon of ethical AI development.
  • Who created ChatGPT? 6 prominent tech visionaries from Silicon Valley.
  • Transitioning into a for-profit entity in 2019, OpenAI struck a strategic alliance with Microsoft, bolstering its research and outreach.
  • Retaining its private status, OpenAI avoids the typical pressures public companies face, ensuring undistracted pursuit of its mission.
  • With a unique operational dichotomy, OpenAI perfectly straddles its foundational mission and commercial aspirations.

Who are OpenAI’s Co-Founders?

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

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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 (AI):

Who Owns OpenAI

  • 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 and now as the Chief Scientist at OpenAI.
  • 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 revolutionary journey began on 11 December 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?

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.

The OpenAI ownership pie is divided between Microsoft (49%), other stakeholders (49%), and the original OpenAI non-profit foundation, which staunchly preserves its autonomy as the leading firm continues to write OpenAI history.

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.

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, available as a PDF here, 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 make OpenAI 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.

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, assumed the role of interim CEO. Subsequently, Emmett Shear, previously the CEO of Twitch, was appointed as 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.

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.

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.

FAQs

What is the Ownership Structure of OpenAI?

How Does OpenAI’s Ownership Impact Its Operations and Goals?

Are There Any Notable Investors or Partners in OpenAI?

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Sam Cooling
Crypto & Blockchain Writer
Sam Cooling
Crypto & Blockchain Writer

Sam Cooling is a crypto, financial, and business journalist based in London. Along with Techopedia, his work has been published in Yahoo Finance, Coin Rivet, and other leading publications in the financial space. His interest in cryptocurrency is driven by a passion for leveraging decentralized blockchain technologies to empower marginalized communities worldwide. This includes enhancing financial transparency, providing banking services to the unbanked, and improving agricultural supply chains. Sam has a Master’s Degree in Development Management from the London School of Economics and has worked as a Junior Research Fellow for the UK Defence Academy.