‘We Are Not a Normal Company’: OpenAI’s Latest Drama

"More high-level departures caught some at the high-flying A.I. start-up off guard, as the company seeks to raise billions to fund its operations and ambitious goals.

Sam Altman’s latest challenge

OpenAI has had more than its share of drama over the past year, even as it extends its lead in artificial intelligence.

But as ChatGPT’s parent company takes steps to become more palatable to outside investors, it has again lost senior leaders, including its prominent chief technology officer. It’s a reminder that while OpenAI is one of the most consequential highfliers in tech, it’s — as Sam Altman, its C.E.O., put it — “not a normal company.”

OpenAI is in the midst of a significant transition. As part of its efforts to raise one of the biggest fund-raising rounds in recent memory, pushing up its valuation to perhaps $150 billion, the company is moving to become a for-profit business, according to The Times and others.

That, along with removing the caps on returns that external investors can collect, would help resolve questions about how OpenAI is run. The company has already taken some steps to allay such concerns by forming a board that looks more like the typical corporation’s, after a previous set of directors briefly ousted Altman last year.

Speaking of Altman, he is also in talks to get an equity stake in OpenAI, after having previously said he didn’t need one, according to Reuters. Bloomberg reports that it could be for as much as 7 percent of the company, which would be worth about $10.5 billion if the start-up were to secure the valuation it is seeking.

But that transition will come amid another management reshuffle. Even OpenAI employees were reportedly surprised by Wednesday’s announcement that Mira Murati, the company’s star C.T.O., planned to leave after a more than six-year stint. (Two other executives, including the chief research officer, are also departing.)

A half-dozen OpenAI executives have already left this year, including Ilya Sutskever, the co-founder who initially pushed for Altman’s ouster, and other leaders who have questioned the company’s commitment to A.I. safety. Altman has since brought in Silicon Valley veterans for key roles, seemingly in part to show that OpenAI was growing up.

The stakes are high. Investors have pushed to get a piece of OpenAI because of its pace of innovation, including more advanced iterations of ChatGPT. But Altman has even grander plans for the company, which will require enormous capital.

OpenAI’s financial needs are huge: It spends about $7 billion a year on $3 billion in revenue. But the company has more expensive dreams, including creating a worldwide network of hugely expensive and energy-hungry data centers to power A.I. computing, The Times reports. That would be an effort that by the company’s own admission will cost “hundreds of billions,” and would almost certainly require buy-in from the world’s most powerful governments.

Some have questioned the feasibility of Altman’s goals, with several chip-making executives and government officials laughing at their scale. Others are worried that the OpenAI chief’s aims, including a willingness to work with the United Arab Emirates, put U.S. national security at risk.

That said, Altman is getting results. After meeting at the White House this week, President Biden and Sheikh Mohammed bin Zayed, the Emirati president, directed their governments to discuss ways to collaborate on A.I., something that the OpenAI chief has encouraged.

Such influence may be reason enough for investors to stick with OpenAI, despite all of the drama." [1]

1. ‘We Are Not a Normal Company’: OpenAI’s Latest Drama: DealBook Newsletter. Andrew Ross Sorkin; Mattu, Ravi; Warner, Bernhard; Kessler, Sarah; Michael J. de la Merced; et al.  New York Times (Online) New York Times Company. Sep 26, 2024