Sam Altman didn’t take any equity in OpenAI, report says

OpenAI’s ChatGPT unleashed an arms race amongst Silicon Valley firms and buyers, sparking an A.I. funding craze that proved to be a boon for OpenAI’s buyers and shareholding staff.

But CEO and co-founder Sam Altman might not notch the sort of outsize payday that Silicon Valley founders have loved in years previous. Altman did not take an fairness stake within the firm when it added the for-profit OpenAI LP entity in 2019, Semafor reported Friday.

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OpenAI launched as a non-profit mannequin in 2015 with backing from Tesla CEO Elon Musk, who dedicated $1 billion to OpenAI, Semafor reported. But Musk was sad with OpenAI’s progress, which he assessed as “fatally behind” Google‘s work in AI, Semafor reported.

In early 2018, Musk proposed assuming management over OpenAI and working it himself, Semafor reported, a proposal that was rebuffed by Altman and the corporate’s different crew.

The non-public rift reportedly prompted Musk’s departure. Musk reneged on a publicly introduced funding association, offering solely $100 million of his deliberate $1 billion in help, in keeping with the report.

Altman was already independently rich given his lengthy profession launching or investing in tech startups. That performed into his resolution to not search fairness when the transformation was underway, folks aware of the matter informed Semafor.

Months after including a for-profit entity, in Jul. 2019, OpenAI took a $1 billion funding from Microsoft, which has since embedded the corporate’s applied sciences into its merchandise.

While Altman’s lack of preliminary fairness reportedly gave buyers pause in 2019, the fanfare related to ChatGPT’s launch has possible tempered these issues.

OpenAI is now seeking to tender shares at a $29 billion valuation, greater than double what it was price in 2021, The Wall Street Journal reported.

OpenAI and Musk did not instantly reply to CNBC’s request for remark.

Read extra at Semafor.