OpenAI CEO Sam Altman, who famously says he has no equity in the $157 billion AI company he owns, could soon become a billionaire as OpenAI is reportedly looking to give him a 7 percent stake, worth $11 billion, according to OpenAI. Reuters. While Altman denied the report, OpenAI chairman Bret Taylor issued a statement saying that the company’s board had indeed had discussions about “whether it would be in the best interest of the company and our work for Sam to be compensated equitably, but no specific figures were discussed or any decisions made.” .”
The pressure to give Altman equity likely came from outside investors. Fortune reported last week that OpenAI’s investors were “pressing hard” for it to have skin in the game to raise capital. Reuters reported last month that OpenAI is ready to raise $6.5 billion from investors depending on whether the company can change its corporate structure and remove the profit cap from investors.
The company’s restructuring and giving Altman equity will reassure OpenAI investors that the leadership team is committed to maximizing their returns, which is important as OpenAI seeks additional funding to meet its ambitious goals. Earlier this year, Altman made headlines for finally seeking to raise up to $7 trillion in financing—more than the annual GDP of Germany, the world’s third-largest economy—to meet its long-term goals.
Although Altman has not yet confirmed his plan to turn OpenAI into a for-profit entity, he said at a technology conference in Italy last week that OpenAI was considering restructuring to get to the “next phase.” And last week, OpenAI’s CTO, Mira Murati, announced her resignation. So are the other two senior managers, Barrett Zoph and Bob McGrew. Industry observers wondered if their exits were related to the company’s restructuring, although Altman denied such speculation at a conference in Italy.
OpenAI was founded in 2015 as a non-profit research lab funded by donations from billionaires like Reid Hoffman and Elon Musk. Recognizing that “donations alone will not equal the cost of energy and talent needed to advance basic research,” according to its website, OpenAI in 2019 launched a for-profit arm. Arm operates on a limited revenue model but the cap is so high that it may not exist—allowing OpenAI investors to earn up to 100 times their initial investment.
Altman is already a millionaire
Altman, 39, is currently worth an estimated $2 million, according to Bloomberg. He invested $1.2 billion in a diversified venture fund called Hydrazine Capital, and another $434 million in Apollo Projects.
Altman owns shares in several high-flying technology companies, including an 8.7 percent stake in Reddit. In 2021, he invested $375 million in Helion Energy, a startup building the world’s first fusion plant. In 2022, he invested $180 million in Retro Biosciences, a startup focused on anti-aging.
At a conference call last May, Altman said he “has no equity in OpenAI.” In a recent statement by OpenAI spokesman Steve Sharpe, Altman confirmed that he also does not own profit participation units, OpenAI’s program that gives employees the right to earn a certain percentage of the company’s profits, similar to equity compensation.
According to legal filings, Altman owns 75 percent of the OpenAI Startup Fund, a private venture that is associated with OpenAI but does not receive funding from the company. The fund manages $325 million in assets to invest in small AI companies. However, Sharpe said that Altman has not invested his money, so he cannot benefit financially from this fund. In April, Altman was removed as an owner or administrator of the startup fund due to scrutiny for being too close to OpenAI despite seeking independence.
