After months of exploring a transition to a for-profit model, OpenAI announced on Monday that it is changing direction and will keep its nonprofit entity in charge of the organization behind ChatGPT and other AI technologies.
“In light of feedback from civic leaders and discussions with the Attorneys General of California and Delaware, we’ve decided the nonprofit will maintain control,” CEO Sam Altman wrote in a message to staff.
Altman and Bret Taylor, the chair of OpenAI’s nonprofit board, explained that while the board chose to preserve nonprofit oversight, they are introducing a new strategy to support the company’s growth.
As part of what Taylor referred to as a “recapitalization,” the existing for-profit branch of the organization will be restructured into a public benefit corporation—one that must weigh both shareholder interests and its broader mission.
Shareholders will also receive stock and a cap on profit for some investors will be lifted, as part of the new plan. Altman said the changes would make it easier for the for-profit to behave more like a normal company.
Taylor declined to say Monday how large of an ownership stake the nonprofit will have in the new public benefit corporation. He said in a call with reporters that the nonprofit will choose the board members of the public benefit corporation and, at first, they will likely be the same people who now sit on OpenAI’s nonprofit board.
Grand Theft Auto VI delayed again, this time until May 2026
Public benefit corporations were first created in Delaware in 2013 and other states have adopted the same or similar laws that require the companies to pursue not just profit but a social good. Public benefit corporations, which include Amalgamated Bank and the online education platform Coursera, need to define that social good, which can vary broadly, when they incorporate.
Altman said that converting from a limited liability company to a public benefit corporation “just sets us up to be a more understandable structure to do the things that a company of our scope has to do.”
“There’s so much more demand to use AI tools than we thought there was going to be,” Altman said. Getting access to more capital will make it easier for OpenAI to pursue mergers and acquisitions “and other normal things companies would do,” Altman said.
OpenAI’s co-founders, including Altman and Tesla CEO Elon Musk, originally started it as a nonprofit research laboratory on a mission to safely build what’s known as artificial general intelligence, or AGI, for humanity’s benefit. Nearly a decade later, OpenAI has reported its market value as $300 billion and counts 400 million weekly users of ChatGPT, its flagship product.
OpenAI first outlined plans last year to convert its core governance structure but faced a number of challenges. One is a lawsuit from Musk, who accuses the company and Altman of betraying the founding principles that led Musk to invest in the charity and tried to block the conversion to a for-profit. A federal judge last week dismissed some of Musk’s claims and allowed others to proceed to a trial set for next year.
OpenAI also faced scrutiny from the top law enforcement officers in Delaware, where the company is incorporated, and California, where it operates out of a San Francisco headquarters. The California attorney general’s office said in a statement that it was reviewing the plan and, “This remains an ongoing matter — and we are in continued conversations with Open AI.”
The attorney general’s office in Delaware did not immediately return a request for comment.
Altman said he still expects a large investment from Japanese technology giant SoftBank Group, which in February announced plans to set up a joint company with OpenAI to push AI services.