Openai first announced that the nonprofit had planned to convert it into a for-profit organization, and then decided that the nonprofit organization would maintain control over its for-profit organization.
Openai’s business wing, which has been under the nonprofit since 2019, will be moving to the Public Benefits Company (PBC), according to the company. The nonprofit is also a large shareholder of PBC.
“Openai was founded as a nonprofit, and today it is overseen and administered by that nonprofit,” Openai Chairman Bret Taylor wrote in a statement on the company’s blog. “From now on, it will continue to be overseen and controlled by its nonprofit.”
Openai said it had made the decision “after hearing from civic leaders and having a constructive dialogue with the Delaware Attorney General and the California Attorney General’s office.”
“We are grateful to both offices and look forward to continuing these important conversations to ensure Openai continues to pursue its mission effectively,” Taylor continued.
Openai was founded as a nonprofit in 2015, but was converted into a “capted for-profit organization” in 2019, and was about to rebuild it into a for-profit purpose. When it moved to Cap’s for-profit organization, Openai retained its non-profit wing. This currently controls the stocks in the organization’s corporate arm.
Openai said the conversion would maintain the nonprofit and inject additional resources that would be spent on “charity initiatives” in sectors such as healthcare, education and science. In exchange for control of Openai’s stock in companies, the nonprofit is reportedly reaping billions of dollars.
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Many, including Elon Musk, opposed, including Elon Musk, who filed a lawsuit against Openai, opposed the company’s planned transition. The Musk lawsuit denies the startup for abandoning its non-profit mission aimed at ensuring that AI research benefits all humanity.
Musk had sought a preliminary injunction to stop the conversion of the open. The federal judge rejected the request, but allowed him to go to a ju trial in spring 2026.
A nonprofit organization that co-hosted the former Openy employee and encoding group, California’s unfortunate SB 1047 AI Safety Act, filed an Amicus brief in support of the mask lawsuit several months ago. Separately, a cohort of organizations, including nonprofits and labor groups, such as the California Teamster, petitioned California Attorney General Rob Bonta to stop the Open from becoming a for-profit property, claiming the company “could not protect its charitable assets.”
Nobel Prize winners, law professors and civil society organisations also wrote to Bonta and Delaware Attorney General Kathy Jennings, demanding that startup restructuring efforts be stopped.
Reports show that for-profit organizations must either complete conversions by the end of this year or complete commercial conversions by the end of this year. Now that the course has been reversed, it is unclear what outcomes will befall Openai.
In a letter to staff on Monday, also published on Openai’s blog, CEO Sam Altman said he believes Openai could ultimately need “trillions of dollars” to achieve its goal of “the (company) services being widely available to all humanity.”
This story is developing. Please check for updates.