OpenAI backs away from a full for-profit shift, reaffirming nonprofit control amid legal pressure, regulatory scrutiny, and evolving AI governance concerns.
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| OpenAI will maintain nonprofit board control and restructure its for-profit unit as a public benefit corporation to balance growth with public accountability. Image: CH |
San Francisco, USA — May 6, 2025:
OpenAI has reversed course on plans to shift toward a full for-profit structure, announcing on Monday that its nonprofit board will retain control of the organization behind ChatGPT and other groundbreaking AI technologies. The decision comes after months of intense scrutiny, legal challenges, and discussions with the Attorneys General of California and Delaware.
"In light of feedback from civic leaders and legal authorities, we’ve decided the nonprofit will maintain control," OpenAI CEO Sam Altman wrote in a message to staff. Altman, alongside board chair Bret Taylor, emphasized that while the nonprofit will continue to govern the company, they are also undertaking a significant corporate restructuring.
Central to this shift is the transformation of OpenAI’s for-profit arm into a public benefit corporation (PBC)—a legal framework that mandates the company pursue social good alongside shareholder interests. This new structure aims to accommodate OpenAI’s rapid growth while preserving elements of its founding mission to develop artificial general intelligence (AGI) for the benefit of humanity.
While the nonprofit will appoint board members to the new PBC, the specific ownership stake it will hold has not been disclosed. Taylor indicated that, at least initially, board composition between the nonprofit and the PBC would remain the same.
Altman acknowledged that converting to a PBC makes OpenAI more attractive and comprehensible to investors and strategic partners. “There’s far more demand for AI tools than we anticipated,” he said, adding that increased access to capital will support mergers, acquisitions, and other activities common in large-scale technology firms.
Founded as a nonprofit in 2015 by Altman, Elon Musk, and others, OpenAI was built on a mission to safely advance AGI. But as its valuation surged to an estimated $300 billion and ChatGPT usage reached 400 million weekly users, its dual identity as both a research lab and a commercial enterprise has drawn criticism.
Those tensions came to a head last year when Musk sued OpenAI and Altman, alleging a betrayal of its founding principles. A federal judge recently allowed parts of that lawsuit to proceed, adding legal pressure to OpenAI’s governance decisions.
The organization also faced scrutiny from state attorneys general. California officials have publicly confirmed ongoing investigations into OpenAI’s governance changes, while Delaware authorities have also been involved behind the scenes.
Despite these headwinds, Altman expressed confidence in OpenAI’s path forward, noting that a major partnership with Japan’s SoftBank is still expected to proceed. The joint venture is set to expand OpenAI’s global reach in AI services.
By preserving its nonprofit oversight and adopting a legally binding commitment to public benefit, OpenAI is attempting to strike a delicate balance—pursuing commercial innovation while maintaining a foundation of public trust. Whether this structure will hold under the growing demands of the AI industry remains an open question.