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OpenAI Retains Nonprofit Control, Restructures ChatGPT Arm as PBC

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Updated May 6, 2025, 09:51 PM

OpenAI has reversed its plan to transition into a fully for-profit entity, deciding instead to maintain control under its original nonprofit board. The company announced that its for-profit subsidiary, which develops ChatGPT, will be restructured into a Public Benefit Corporation (PBC), with the nonprofit remaining as a major shareholder. This decision follows discussions with civic leaders and the Attorneys General of California and Delaware, reflecting a response to external pressures and legal challenges.

The shift in strategy comes after OpenAI initially planned to convert its for-profit arm into a conventional for-profit company, a move that drew criticism and a lawsuit from co-founder Elon Musk. Musk's legal action, which claims OpenAI strayed from its founding mission to develop artificial general intelligence (AGI) for the benefit of humanity, will continue despite the company's decision to retain nonprofit control.

CEO Sam Altman stated that the new structure will not compromise OpenAI's ability to raise funds for AI development, which he suggested could eventually require trillions of dollars. The restructuring aims to balance the company's mission with the need for capital, allowing for more flexible fundraising while maintaining a focus on public benefit. The change also involves removing the 100x cap on profits, a move that could attract more investment from stakeholders like Microsoft and SoftBank.

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