OpenAI Keeps Nonprofit in Charge, Restructures For-Profit Arm as Public Benefit Corporation

OpenAI plans to remain under nonprofit control as it restructures its for-profit business into a Public Benefit Corporation, the company announced Monday.

The move clarifies OpenAI's governance after months of scrutiny over whether it had drifted from its founding mission to build artificial general intelligence (AGI) that benefits humanity. While the for-profit side will continue developing commercial products like ChatGPT, the nonprofit will hold majority ownership and appoint the board that oversees the new structure.

"We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware," CEO Sam Altman wrote in a letter to staff.

OpenAI created its capped-profit entity in 2019 to attract funding while preserving a degree of mission oversight. But high-profile conflicts, including a lawsuit from Elon Musk and resignations by key researchers, raised questions about whether that oversight was holding up under commercial pressure. By converting the for-profit entity into a Public Benefit Corporation (PBC), OpenAI says it can continue to attract capital while still prioritizing public good over shareholder profit.

The new PBC structure doesn't eliminate investor returns, but it does put legal emphasis on ethical commitments and societal impact. The approach is similar to models used by Anthropic and Elon Musk's xAI, both firms trying to balance mission and money. According to OpenAI, the nonprofit will retain the final say over leadership and major decisions, maintaining control of the AGI roadmap.

Observers have raised concerns that even a PBC could eventually compromise under pressure to scale its business. Others see the structure as a pragmatic step that keeps governance aligned while addressing the financial realities of AI development, which often requires billions in investment. OpenAI has so far raised funding from Microsoft and other partners and continues to roll out tools like GPT-4 and enterprise versions of ChatGPT.

While the announcement reaffirms the nonprofit's role, OpenAI's trajectory will likely continue to spark debate about transparency, competition, and who ultimately benefits from artificial intelligence. The company says it will share more details about the new structure as it evolves.

As OpenAI navigates its continued growth, this latest decision signals that it might not be ready to abandon the original principles it was founded on.