OpenAI burst onto the scene in 2015 as an ambitious non-profit focused on safely developing artificial general intelligence (AGI). Despite not pursuing profits initially, the company has morphed into a unique hybrid corporate structure that is now valued at over $29 billion following Microsoft’s $10 billion investment.
This article will unpack OpenAI’s complex evolution, leadership shakeups, financials and outlook to understand if any investment opportunities into the AI trailblazer exist currently.
The Non-Profit Origins of OpenAI
In 2015, technology leader and investor Sam Altman teamed up with Greg Brockman and the backing of other Silicon Valley notables to found OpenAI as a non-profit. Their goal was to openly share AI research for broad benefit, with a focus on safety.
The initial billion dollars raised came via tech luminaries like Peter Thiel, Reid Hoffman and Elon Musk who chaired the board. OpenAI operated for years doing fundamental AGI research without pressure to monetize.
However, the costs of computing and talent grew exponentially, forcing OpenAI to explore revenue generation.
For-Profit Pivot and Microsoft Investment
In 2019, OpenAI incorporated a for-profit limited partnership to attract capital, while still pursuing its charter through the non-profit wing.
This structure opened the doors for Microsoft, who first invested $1 billion into OpenAI in 2019. After witnessing OpenAI’s success with DALL-E 2 image generation and ChatGPT conversation technology, Microsoft boosted their total investment to over $10 billion in January 2023.
This cash injection came during a turbulent time for OpenAI which saw high-profile leadership shakeups.
OpenAI Leadership In Disarray
OpenAI had been smoothly led by Altman as CEO since its inception. However, on November 16th 2022, the board abruptly fired Altman citing a lack of transparency.
This decision outraged employees, with the vast majority threatening mass resignation if Altman was not reinstated. Major investors also backed Altman to continue leading OpenAI through its core inventions.
Just a week later, OpenAI struck a deal for Altman to resume his CEO position but without a board seat. Former Twitter board chair Bret Taylor now chairs a newly created board overseeing operations.
So after a rocky seven days, OpenAI seems to be back on track with stable leadership.
No Traditional Stock, But Signs Point to Eventual Opportunity
Given OpenAI’s growing influence yet opaque structure, many wonder if they can directly invest into the company. Unfortunately, with no IPO so far, no traditional stock or share options currently exist.
There had been rumors of a potential internal stock sale at a $29 billion valuation, but concrete details remain elusive. This likely represents employee shares granted as compensation.
Microsoft’s swelling investment suggests they see OpenAI as the AI market leader poised for predominance when AGI arrives. With total lifetime profits split 75/25 in favor of Microsoft until ROI is reached, OpenAI itself has less incentive currently to raise public capital or issue stock.
However, eventually spinning out the for-profit arm via IPO when growth hits exponential phases could greatly benefit OpenAI’s expandability while allowing the public to share in its game-changing success. For now though, traditional equity investment remains off the table.
Detailed financials are sparse for private OpenAI, but projections based on the Microsoft partnership include:
- ~$200 million revenue in 2023
- ~$1 billion revenue in 2024
These numbers will grow quickly if ChatGPT expertise gets productized into Azure cloud services and other offerings, which seems imminent.
The Outlook for OpenAI
Despite recent uncertainty, OpenAI remains situated in the driver’s seat to potentially achieve AGI and dominate the AI landscape.
ChatGPT already ignited a paradigm shift around language model capabilities. And with Altman restored as CEO, OpenAI is poised to reach new heights.
For interested investors, opportunities may open up eventually if liquidity needs arise. But an IPO likely won’t occur until exponential commercialization phase kicks the valuations into high gear.
The roadmap certainly suggests OpenAI plans to change the world profoundly in the coming years. Public market debut would allow participation in this highly influential company revolutionizing AI for the benefit of humanity.