Billionaires: OpenAI considers giving Sam Altman 7% equity stake

Generative artificial intelligence company OpenAI could offer chief executive Sam Altman a 7 per cent equity stake in the company and restructure to become a for-profit business, sources told Bloomberg. This is a major shift that would mark the first time Mr Altman is granted ownership in the AI start-up, which is behind the popular ChatGPT tool. The free chatbot answers questions with convincingly humanlike responses and learns as it interacts with users. The company is considering whether to become a public benefit corporation, aiming to turning a profit and also help society, the sources said. The transition is still under discussion and a timetable has not yet been determined, one of the sources added. OpenAI is discussing the changes against the backdrop of a mass departure of senior managers. Chief technology officer Mira Murati said on September 25 that she was leaving, a surprise move that marks the latest high-profile departure from the start-up. In the months after it suddenly fired and then rehired Mr Altman last year, OpenAI has been in a state of flux – losing several managers and shifting the structure of some of its teams. OpenAI was founded in 2015 as a non-profit research organisation with the goal of building AI that would be safe and beneficial to humanity. In keeping with those origins, Mr Altman had not taken equity, stressing the company was meant to broadly benefit society and that he had enough money. Yet as the value of the business soared, it has been increasingly difficult to stick with those ideals. In 2019, the company created a for-profit subsidiary to help fund the high costs of AI model development and has since drawn billions in outside investment from companies including Microsoft. OpenAI is currently working to raise $6.5 billion at a $150 billion valuation, which would make it one of the most valuable start-ups in the world, Bloomberg reported this month. That boost, on top of the possible new equity, could add more than $10 billion to Mr Altman’s net worth , according to the Bloomberg Billionaires Index, propelling him into the ranks of the world’s richest people. Mr Altman was reported to have a net worth of $2 billion, Bloomberg reported in March this year. He co-founded OpenAI in 2015 with Tesla chief executive and X owner Elon Musk , billionaire venture capitalist Peter Thiel and LinkedIn co-founder Reid Hoffman. Mr Musk left OpenAI in 2018 after a disagreement over its direction. Before OpenAI, Mr Altman was president of Y Combinator, a start-up accelerator group in Silicon Valley, and served as chief executive of social media platform Reddit for a short time. In a statement, a representative said OpenAI remained “focused on building AI that benefits everyone”. “The non-profit is core to our mission and will continue to exist," the representative added. The possible equity holding, which is still under negotiation, would give Mr Altman a financial stake in the success of OpenAI. Many investors favour the idea of a founder owning at least part of the businesses they run. Mr Altman has also said in interviews that he wished he had taken equity so people would stop asking him about it. After Mr Altman was sacked, Ms Murati gained a higher profile when she was appointed as interim chief executive – but she quickly joined a group of executives pushing for Mr Altman to be reinstated. Her departure marks the latest executive exit at OpenAI since Mr Altman’s firing and rehiring last year. 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, while researcher John Schulman left for AI rival Anthropic. The departures leave only two members of OpenAI’s original founding team at the start-up: Mr Altman and Wojciech Zaremba. The company has about 1,700 employees, more than double the roughly 770 it had in late 2023. Gautam Adani’s $1.2 billion copper smelter will take time to reach its nameplate capacity as a global shortfall of ore restricts supply to processors. Adani Enterprises is likely to start processing the first copper concentrates of ore at its plant in the western Indian state of Gujarat in November and will build up slowly from there, sources told Bloomberg. The 500,000-tonne-a-year Kutch smelter is part of a copper-producing complex that the billionaire aims to expand into the world’s biggest single-site custom processor of the metal and should go a long way in alleviating India’s reliance on imports of refined metal. Mr Adani’s net worth is estimated at $105 billion, according to the Bloomberg Billionaires Index. Copper ore supply has been tight this year after the closure of a major mine in Panama and cuts at operations owned by Anglo American. Alongside the Adani project, new smelters starting up in Indonesia and China this year have created a huge mismatch between the demand and availability of mined ore. While the smelter expansion has made concentrates difficult to source, it has also added to a surplus of refined copper this year. The pace of the build up at the Adani project and how it affects the market balance will be a topic of conversation as copper traders fly into London for LME Week, which begins on September 30. This is also when annual supply contract negotiations start between smelters and miners. The first shipments of concentrates have already started heading to Gujarat, the sources said. The company has secured supply contracts with Glencore and Hudbay Minerals for the smelter and is in talks with other parties as well, they added. Cable TV billionaire John Malone, a major shareholder of Warner Bros Discovery , said the company could make a case for creating a tracking stock for its traditional TV networks, allowing the market to value them separately from its studio and streaming businesses . Doing so would create a growth side of Warner Bros and a cash cow side, Mr Malone said in an interview published on September 25 by MoffettNathanson, a Wall Street research group. The company could allocate a lot of the debt to a business that includes networks such as CNN and TNT, and maybe attract private equity as investors. The shares representing the studio and streaming business would probably trade at a much higher multiple of earnings, he said. Mr Malone is a member of the Warner Bros board and owns about 18.6 million shares, according to a recent filing. He is reported to have a net worth of $9.55 billion, according to the Bloomberg Billionaires Index. Mr Malone, 83, is a pivotal figure in the pay-TV industry. He led Tele-Communications, a pioneering cable company that was once the US’s largest. He has restructured some of his holdings recently. On September 23, his Liberty Broadband announced it exchanged merger proposals with Charter Communications, the largest US cable-TV provider. In the MoffettNathanson interview, Mr Malone said talks were also under way to change the structure of Liberty Live Group, another of his companies, which is linked to Ticketmaster-parent Live Nation Entertainment. Compiled from Bloomberg

Billionaires: OpenAI considers giving Sam Altman 7% equity stake

In our round-up of the world’s ultra-wealthy, Gautam Adani’s $1.2 billion copper smelter slows and John Malone suggests Warner Bros creates tracking stock for TV networks