Artificial Intelligence

OpenAI Abandons Plan to Become For-Profit Company

MAY 6 2025·Updated MAY 7 2025

Story

Above: Sam Altman, chief executive officer of OpenAI, speaks at Station F during the AI Action Summit in Paris Feb. 11, 2025. Image credit: Nathan Laine/Contributor/Bloomberg via Getty Images

The Facts

After discussions with the attorneys general of California and Delaware, OpenAI announced Monday it would maintain nonprofit control over its operations, abandoning earlier plans to transition to a for-profit structure that would have relinquished the nonprofit's authority.
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The company said it will convert its for-profit subsidiary from a limited liability company into a public benefit corporation, which must consider both shareholder interests and its mission. It added that its nonprofit will become a large shareholder in this entity.
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CEO Sam Altman wrote to employees that the company is moving to "a normal capital structure where everyone has stock" instead of the previous "complex capped-profit structure," arguing that OpenAI needs hundreds of billions or trillions of dollars to make its services broadly available.
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This restructuring reverses OpenAI's December announcement that sought to remove profit caps and facilitate raising capital. The company had been pursuing up to $30 billion in funding from SoftBank and other investors, contingent on approval of the previous restructuring plan.
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The decision follows significant pushback, including a lawsuit from co-founder Elon Musk, who accused OpenAI of abandoning its original mission to develop artificial intelligence (AI) for humanity's benefit. A federal judge recently allowed many of Musk's claims to proceed to trial while dismissing others.
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OpenAI was founded as a nonprofit research lab in 2015 but created a for-profit arm in 2019 to raise the substantial capital needed for AI development. Recently valued at $300 billion, the company has 400 million weekly ChatGPT users and counts Microsoft as its largest investor.
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Sources Split

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CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Narrative A

This restructuring preserves OpenAI's founding mission while allowing necessary growth. The nonprofit control ensures AI development remains aligned with public benefit rather than solely with profit motives. Maintaining this governance structure provides critical safeguards as the company develops increasingly powerful AI systems that could have profound societal impacts.

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Narrative B

The compromise structure unnecessarily complicates OpenAI's ability to compete in the AI race. Keeping nonprofit control will significantly reduce the company's ability to raise capital, as investors want clear paths to returns on their investments. This half-measure fails to provide the simplified structure needed for the massive funding required to develop artificial general intelligence.

MINT