OpenAI Retains Nonprofit Control Amid Elon Musk's Lawsuit, Plans to Cut Microsoft Revenue Share to 10% by 2030

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Updated May 8, 2025, 08:08 AM

OpenAI has decided to abandon its plan to become a fully for-profit entity, choosing instead to maintain control under its original nonprofit board. This decision follows significant criticism and legal challenges, including a lawsuit from Elon Musk, who accused OpenAI of deviating from its founding mission to develop AI for the benefit of humanity.

The restructuring plan, which would have converted OpenAI into a Public Benefit Corporation (PBC), was met with opposition from various stakeholders, including state attorneys general in California and Delaware. Despite the shift, OpenAI's for-profit arm, the maker of ChatGPT, will continue to operate, but under the oversight of the nonprofit board, ensuring alignment with the company's mission to ensure AGI benefits all of humanity.

Elon Musk's legal team has stated that the lawsuit against OpenAI will proceed despite the company's decision to retain nonprofit control, with a trial scheduled for March 2026. Musk's attorney, Marc Toberoff, described the nonprofit reversal as a 'transparent dodge' that does not address the core issues of the lawsuit.

OpenAI's decision to maintain nonprofit control has implications for its major stakeholder, Microsoft, which has not yet approved the revised restructuring plan. Microsoft, having invested $13.75 billion in OpenAI, is negotiating to ensure its investment is protected under the new structure. Currently, OpenAI shares 20% of its revenue with Microsoft, but plans to reduce this to 10% by 2030.

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#OpenAI #Elon Musk #Public Benefit Corporation #PBC #California #Delaware #ChatGPT #AGI #Musk #Marc Toberoff #Microsoft

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Sources

techcrunch.com(6)reuters.com(6)theinformation.com(5)businessam.be(3)

Business AM

@businessamnl

OpenAI halves Microsoft revenue share in strategic restructuring https://t.co/tZiBIXo8AS #OpenAI #Microsoft #AI #strategischeherstructurering #technologie https://t.co/Kqg7jjGS18

Benzinga

@Benzinga

OpenAI to slash Microsoft revenue share by 2030: Report https://t.co/9M378eBTct

The Information

@theinformation

OpenAI has abandoned its restructuring plans following Elon Musk's legal challenge. This decision leaves the future control of the company in the hands of the existing board, potentially cementing Sam Altman's influence. Learn more: https://t.co/Tr1abapw6g #openai