Musk Was Right… OpenAI Shuts-Down Non-Profit Control, CTO Exits

OpenAI’s Chief Technology Officer Mira Murati became the latest in a string of high-profile departures from the leading AI company this afternoon.

 Ilya Sutskever, the company’s chief scientist, left in May. In August, co-founder Greg Brockman said he would go on leave until the end of the year and researcher John Schulman left for AI rival Anthropic. The departures leave only two members of OpenAI’s original founding team at the company: Altman and Wojciech Zaremba.

How it started…

How it’s going…

h/t @Yuchenj_UW

After six-and-a-half years at the company – including temporarily serving as its CEO after cofounder Sam Altman was briefly ousted, Murati told employees in a message Wednesday she had “made the difficult decision to leave.”

Read her full memo to staff that she shared online below:

Hi all,

I have something to share with you. After much reflection, I have made the difficult decision to leave OpenAl.

My six-and-a-half years with the OpenAl team have been an extraordinary privilege. While I’ll express my gratitude to many individuals in the coming days, I want to start by thanking Sam and Greg for their trust in me to lead the technical organization and for their support throughout the years.

There’s never an ideal time to step away from a place one cherishes, yet this moment feels right. Our recent releases of speech-to-speech and OpenAl o1 mark the beginning of a new era in interaction and intelligence – achievements made possible by your ingenuity and craftsmanship. We didn’t merely build smarter models, we fundamentally changed how Al systems learn and reason through complex problems.

We brought safety research from the theoretical realm into practical applications, creating models that are more robust, aligned, and steerable than ever before. Our work has made cutting-edge Al research intuitive and accessible, developing technology that adapts and evolves based on everyone’s input. This success is a testament to our outstanding teamwork, and it is because of your brilliance, your dedication, and your commitment that OpenAl stands at the pinnacle of Al innovation.

I’m stepping away because I want to create the time and space to do my own exploration. For now, my primary focus is doing everything in my power to ensure a smooth transition, maintaining the momentum we’ve built.

I will forever be grateful for the opportunity to build and work alongside this remarkable team. Together, we’ve pushed the boundaries of scientific understanding in our quest to improve human well-being.

While I may no longer be in the trenches with you, I will still be rooting for you all.

With deep gratitude for the friendships forged, the triumphs achieved, and most importantly, the challenges overcome together.

Mira

Altman wrote on X that he had thanked Murati in a message to the company.

“It’s hard to overstate how much Mira has meant to OpenAI, our mission, and to us all personally,” Altman wrote.

“I feel tremendous gratitude towards her for what she has helped us build and accomplish, but I most of all feel personal gratitude towards her for the support and love during all the hard times. I am excited for what she’ll do next.”

Around an hour after her resignation letter hit social media, Reuters reported, according to people familiar with the matter, OpenAI is considering becoming a for-profit company and giving Chief Executive Officer Sam Altman equity in the artificial intelligence startup for the first time.

The OpenAI non-profit will continue to exist and own a minority stake in the for-profit company, these sources said.

“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.

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.

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.

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.

The move to a for-profit entity comes just a few weeks after Elon Musk reignited a legal battle against OpenAI and its co-founders, Sam Altman and Greg Brockman, accusing the defendants of multiple counts, including fraud, breach of contract, and violations of federal civil racketeering laws.

Musk had originally sued in February before dropping the suit in June with no explanation given at the time.

Musk’s revived lawsuit includes several allegations against OpenAI, Altman, and Brockman—at the heart of which is a claim that Altman and Brockman “intentionally courted and deceived” Musk into co-founding OpenAI under false pretenses.

Musk asserted in the 81-page suit that he was misled into believing that OpenAI would be a nonprofit organization focused on developing artificial intelligence (AI) technologies “for the benefit of humanity,” operating as a counterbalance to for-profit tech giants.

According to the lawsuit, OpenAI’s co-founders allegedly manipulated Musk by making repeated promises and assurances that the organization would remain open-source and not driven by profit.

The suit defines “open source” as the practice of making AI technology and research freely accessible to the public, allowing for transparency and collaboration.

“Altman assured Musk that the non-profit structure guaranteed neutrality and a focus on safety and openness for the benefit of humanity, not shareholder value,” the suit claimed.

“But as it turns out, this was all hot-air philanthropy – the hook for Altman’s long con.”

Musk claims that these representations were part of a scheme to attract significant funding and expertise, which he provided, including “tens of millions of dollars” and the recruitment of top AI scientists.

The complaint further accuses Altman and Brockman of engaging in “rampant self-dealing” and transforming OpenAI into a for-profit entity in partnership with Microsoft, thereby abandoning its original mission.

Musk argued that OpenAI’s pivot to a for-profit model has resulted in substantial unjust enrichment for the defendants, which he contends was at the expense of the nonprofit’s mission.

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.

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, as Reuters concludes, 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 has dissolved the superalignment team that focuses on the long-term risks of AI earlier this year.