In a landmark decision, OpenAI has announced that it will abandon plans to convert itself into a conventional for-profit company. The organization will instead remain under the governance of its original nonprofit board, reaffirming its mission to ensure that artificial general intelligence (AGI) benefits all of humanity. This strategic pivot comes after mounting pressure from civic leaders, former co-founder Elon Musk, and regulatory scrutiny from the attorneys general of California and Delaware.
A Restructuring Rooted in Purpose, Not Profit
OpenAI CEO Sam Altman stated that the organization’s decision was driven by a renewed understanding of what it would take to responsibly develop and distribute AGI. “We want to build a brain for the world and make it super easy for people to use for whatever they want,” Altman wrote in a memo to employees. According to Altman, the previously used capped-profit model, which limited investor returns to 100x, was developed at a time when it seemed likely that only one company would lead AGI development. That assumption has since been replaced by a more competitive landscape, with several major players — including Anthropic, xAI, and Google DeepMind — now pursuing similar goals.
A Shift to a Public Benefit Corporation Structure
OpenAI will now transition its for-profit subsidiary into a Public Benefit Corporation (PBC), a structure designed to prioritize societal good alongside financial returns. This move brings OpenAI in line with other AGI labs like Anthropic and xAI, both of which also operate as PBCs. Under the new structure, investors and employees will own regular equity with no cap on appreciation, allowing OpenAI to more easily raise the “hundreds of billions, and eventually trillions” of dollars it believes are necessary to build and distribute AGI systems globally.
Importantly, OpenAI’s nonprofit entity will receive a significant and growing equity stake in the PBC. This will provide long-term funding for charitable programs designed to ensure that AI technologies benefit diverse communities worldwide. The nonprofit board will also retain the power to appoint the PBC’s board, maintaining ultimate oversight of the company’s direction and adherence to its founding mission.
External Pressures and Internal Vision Collide
The reversal follows an extended period of public and legal scrutiny. Elon Musk, who co-founded OpenAI and departed in 2018, has been among the most vocal critics of the company’s push toward a traditional for-profit model. He filed a lawsuit in California earlier this year, accusing OpenAI and Altman of breaching their charitable obligations. His legal team dismissed OpenAI’s new plan as inadequate, asserting that charitable assets were still being diverted for private gain.
Despite the controversy, Altman denied that external pressure played a central role in the decision. “We’re all obsessed with our mission,” he said, dismissing the idea that criticism from Musk was the primary catalyst. However, Altman did acknowledge ongoing dialogue with regulators and stated that the nonprofit’s continued oversight was shaped, in part, by those discussions.
A New Chapter for OpenAI and the Future of AGI
As OpenAI moves ahead with its revised structure, it remains locked in negotiations with Microsoft — one of its largest backers — over its stake in the new PBC. The company is also working with independent financial advisers and state attorneys general to finalize the nonprofit’s ownership share. While these details are still unfolding, OpenAI is confident it can complete the transition within 2025, securing the necessary funding and structure to continue scaling responsibly.
With a $260 billion valuation and rapidly growing demand for its tools, OpenAI now faces the challenge of balancing financial needs with a bold, democratizing vision for AI. By staying true to its nonprofit roots while adopting a more flexible commercial structure, OpenAI hopes to set a new standard for how advanced technologies can be developed for the public good.
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