OpenAI Pledges to Keep Nonprofit in Control Amid External Pressure

Source: Reuters, Sam Altman, the CEO of OpenAI, is viewed through a pane of glass while attending an event held alongside the Artificial Intelligence Action Summit in Paris, France, on February 11, 2025.

Facing increasing scrutiny from former employees and civil society leaders, OpenAI announced on Monday that its nonprofit foundation will continue to govern the organization, even as it transitions part of its corporate structure into a public benefit corporation (PBC).

In a company blog post and media briefing, OpenAI said the decision followed discussions with the attorneys general of California and Delaware. The company, valued at approximately $300 billion after recent funding led by SoftBank and supported by Microsoft, is seeking to realign its structure while maintaining its founding mission.

“The nonprofit will stay in charge of OpenAI,” board chair Bret Taylor said during a press call. “We’re planning to convert the current LLC—currently a subsidiary of the nonprofit—into a public benefit corporation. This will modify the equity model, allowing the nonprofit, investors, and employees to hold shares in the new structure.”

Taylor added that independent financial consultants were engaged to support the restructuring effort. While he declined to specify the nonprofit’s share, he confirmed it would retain majority ownership.

CEO Sam Altman emphasized the importance of aligning the nonprofit’s mission with the operations of the new PBC. “We’re proud that both arms of OpenAI will share the same mission,” he said, noting that the decision had unanimous board and stakeholder backing.

The announcement arrives amid legal tensions with Elon Musk, a co-founder of OpenAI, who is contesting the organization’s move toward commercialization. Musk, now leading rival AI company xAI, argues the transformation deviates from OpenAI’s original nonprofit intent. A $97.4 billion acquisition offer from Musk’s camp was reportedly declined earlier this year.

When asked about Musk’s challenge, Altman sidestepped the dispute. “Our focus is on our mission. That’s what drives us,” he said. “We’re not here to debate personalities—we’re here to build AI that helps everyone.”

Since the 2022 launch of its popular AI assistant ChatGPT, OpenAI has rapidly commercialized its offerings. Despite this shift, the organization remains legally bound to its nonprofit charter. Its hybrid structure, introduced in 2019, created a capped-profit partnership, allowing limited investor returns while preserving nonprofit control. The latest structural change preserves that balance, with investors receiving convertible notes to equity within the new PBC.

Source: Observer

Last month, a coalition including former OpenAI staff, academics, and advocacy groups urged state authorities to intervene. In a formal letter, they argued that transitioning to a for-profit model would erode governance safeguards and stray from OpenAI’s charitable mission.

Page Hedley, OpenAI’s former policy advisor and spokesperson for the group behind the letter, welcomed the company’s response but raised lingering concerns. “It’s encouraging that OpenAI is responding to public accountability,” Hedley said, “but questions remain about whether the nonprofit’s legal authority truly takes precedence over commercial ambitions—and who will control the core technology.”

During the call, Taylor clarified that while the public benefit corporation will have its own board, all directors will be selected by the nonprofit, ensuring its continued oversight. Initially, the same individuals are expected to serve on both boards.

“The nonprofit board’s fiduciary duty remains singularly focused on our mission,” Taylor said. “That was a consistent theme in our stakeholder conversations.”

In a staff letter included in Monday’s announcement, Altman reiterated the company’s core objective: ensuring that artificial general intelligence (AGI)—technology potentially surpassing human intelligence—benefits humanity at large.

“When we founded OpenAI, we didn’t have a clear roadmap,” Altman wrote. “Now, we see AI’s potential across medicine, education, and productivity. But delivering on that promise requires immense resources—possibly trillions of dollars in compute infrastructure.”

Despite evolving challenges, Altman affirmed the company’s founding vision remains unchanged.