OpenAI has announced that its nonprofit will maintain control over the company during its transition to a public benefit corporation (PBC), following pressure from civic leaders and former employees. In a blog post, OpenAI emphasized that this decision was made in consultation with the attorneys general of California and Delaware.
Board chairman Bret Taylor clarified that while the nonprofit remains in charge, the transformation involves converting a subsidiary into a PBC, allowing stakeholders—including employees and investors—to hold equity in the newly structured company. OpenAI CEO Sam Altman expressed contentment with this arrangement, assuring that both the nonprofit and PBC would pursue the same mission.
This announcement comes amidst an ongoing legal dispute with co-founder Elon Musk, who opposes the company’s shift toward a for-profit model as he competes in the generative AI sector with his startup, xAI. Musk had previously attempted to buy OpenAI for $97.4 billion, a bid that was quickly rejected.
OpenAI’s restructuring is a complex process deeply embedded in its mission, compounded by significant challenges that include public concerns over safety and the ethical implications of becoming a for-profit entity. A coalition of former employees and influential figures recently urged the attorneys general to halt this restructuring, warning it might undermine OpenAI’s charitable objectives and dilute vital governance measures.
Currently, OpenAI operates within a hybrid structure that includes a capped-profit limited partnership created in 2019. The original nonprofit retains significant control and majority shares despite the restructuring. As this situation develops, further updates are anticipated as OpenAI navigates its future direction.
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