Date: May 5, 2025
OpenAI has announced it will retain its original nonprofit governance structure, reversing previous plans to fully transition its for-profit arm into an independent company. The decision came after discussions with civic leaders and the Attorneys General of California and Delaware, as well as public criticism and legal challenges, notably from cofounder Elon Musk and competitor Meta. OpenAI was originally established as a nonprofit focused on safe AI development and added a for-profit arm in 2019 to fund its mission. Financial Times+11Business Insider+11The Guardian+11
CEO Sam Altman’s letter to employees outlined plans for the for-profit entity to become a Public Benefit Corporation (PBC), a model used by other AI firms like Anthropic and xAI. This new structure allows everyone to hold stock while maintaining nonprofit oversight. OpenAI’s nonprofit will also become a significant shareholder in the PBC, supporting initiatives aimed at ensuring AI benefits diverse communities. Financial Times+11Business Insider+11Reuters+11
