Artificial intelligence has minted many millionaires, and some people have become billionaires because of their AI startups. OpenAI was one of the first mainstream AI companies due to ChatGPT, which gets more than 700 million weekly users, according to OpenAI. However, its founder, Sam Altman, isn't going to end up with the big payday that everyone expects.
It turns out he doesn't have any equity in OpenAI, which he revealed at the New York Times' DealBook Summit back in December. He only earns $76,001 per year, which doesn't sound like much for the leader of an innovative AI startup that may be the most valuable private company.
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Following A Dream
Altman's logic for not getting equity in his own company is that it was his "childhood dream job," he said during the DealBook Summit. He also said that he enjoyed "getting to sit in the room with the smartest researchers in the world and go on this crazy adventure."
Not accumulating equity in OpenAI could have helped Altman work with more talented workers and investors who wanted a slice of the pie. OpenAI was also originally a nonprofit, and he had to preserve a majority disinterested board to maintain nonprofit status. He admitted this detail during an "All-In" podcast interview in May 2024.
It is shocking to see a tech founder not own any equity in their company, especially one as large as OpenAI. However, there is speculation that Altman can receive equity in the future. Reuters reported that Altman would receive equity in the company last year after its corporate restructuring from a nonprofit to a for-profit company. CNBC reported less than a week later that Altman told OpenAI staff that he would not receive a "giant equity stake' in the company.
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Sam Altman Was Already Rich
OpenAI was Sam Altman's biggest hit, but it wasn't his first rodeo. In fact, he's worth approximately $2 billion due to a string of good investments and startups. Forbes chronicled Altman's path to wealth, which includes early stakes in companies like Stripe, Reddit (NYSE:RDDT) and Helion, a nuclear fusion firm.
Before making those big investments in early-stage tech giants, he dropped out of Stanford to start Loopt, a social mapping company that he sold in 2012 for $43 million. Those funds went into his own venture fund that made those early investments. He also became a partner at startup accelerator Y Combinator, and served as its president from 2014 to 2019.
Altman's wealth and investments made it easy for him to forgo equity and a high salary when he launched OpenAI. He regularly invests his money into promising companies during their early stages, and that has been the primary source of his wealth.
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Can He Wind Up With Equity In The Future?
Although Altman says he doesn't have any equity in OpenAI, that may change in the future. Just last year, Reuters alleged that he would receive equity, and he promptly shot down that claim. However, he may end up with equity in the future.
Redditors speculated that he will receive a stake in the company. When denying Reuter's claim, Altman said that he wouldn't receive a "giant equity stake," but for Redditors, that statement didn't close the door on a smaller equity stake.
"He might receive a medium-sized equity stake in the company," one commenter said on Reddit.
"He will receive a small equity stake of a few billion dollars, nothing giant at all," another Redditor chimed in.
Although Altman doesn't have any equity right now, that can change in the future. The switch from nonprofit to for-profit means there are fewer hurdles Altman would have to cross to obtain equity.
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