News IT business 05-06-2025 at 10:45 comment views icon

OpenAI officially remains a non-profit — the company reconsidered the decision to change its status

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Andrii Rusanov

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OpenAI officially remains a non-profit — the company reconsidered the decision to change its status

OpenAI has actually canceled decision to transform into a commercial company after extensive consultations with the public and lawyers.

«We made the decision to allow the nonprofit to retain control of the situation after listening to community leaders and holding discussions with the California and Delaware attorneys general’ offices. We look forward to further discussing the details of this plan with them, Microsoft, and our newly appointed nonprofit commissioners,» Sam Altman wrote in an open letter to employees.

This step creators of ChatGPT means a revision of the previously proposed restructuring and came as another surprise to investors. The previous version of the company’s plan envisioned OpenAI as a public benefit corporation, where the nonprofit would only own shares and have limited influence. The new solution keeps the nonprofit organization in firm control of operations.

Some former employees and Elon Musk, the co-founder of OpenAI who later left the company, criticized the previous restructuring plan for allegedly removing important oversight of its technology. Musk filed a lawsuit to prevent changes, which is still under consideration.

Recently, the court agreed with the allegations that Musk properly claimed a breach of an implied contract by OpenAI, and «unfair retention of benefits» from previous investments in a different status. Although the court has now largely upheld the main complaint, OpenAI has nevertheless succeeded in dismissing certain parts of the lawsuit, including the claim that Musk was misled by OpenAI’s public statements.

The company has also faced other forms of external pressure. In April, a group of lawyers, artificial intelligence researchers, and technology experts openly opposed OpenAI’s plans to restructure into a letter to the Attorneys General of California and Delaware.

Former OpenAI employees, Nobel Prize winners, and law professors also sent letters to government agencies requesting to stop commercial restructuring due to concerns about the security of control over the hypothetical super-intelligent artificial intelligence of the future.

Although OpenAI has abandoned the turnaround in favor of commercial activities, the company is still planning significant changes to its corporate structure:

«The for-profit LLC within the nonprofit organization will transition to a Public Benefit Corporation (PBC) with the same mission. Instead of our current complicated limited profit structure, which made sense when it looked like there might be one dominant AGI company, but doesn’t make sense in a world of many great AGI companies, we are moving to a regular capital structure where everyone has shares. It’s not a sale, it’s a change of structure to something simpler,” Altman explains.

The new plan may cause some uncertainty about OpenAI’s financial future. When the company received a large-scale $40 billion round of funding in March, it was subject to certain conditions. For example, the Japanese conglomerate SoftBank, which provided $20 billion, stipulated that it would reduce its $30 billion contribution if OpenAI failed to restructure into a fully commercial organization by the end of 2025, which has apparently happened.

Sources: OpenAI, Ars Technica



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