OpenAI has decided that its non-profit division will continue to oversee its for-profit operations. The company had previously announced plans to transition into a fully profit-driven entity. According to an official statement, OpenAI's commercial arm, managed by the non-profit organization since 2019, will now transform into a Public Benefit Corporation (PBC). The non-profit group will retain control and become the majority shareholder of this PBC. "OpenAI was founded as a non-profit entity and remains supervised and controlled by that same non-profit today," wrote OpenAI Board Chairman Bret Taylor in the announcement. "Going forward, it will continue to be overseen and controlled by the non-profit organization."
The company stated that this decision followed constructive discussions with civic leaders and the offices of the Attorneys General of Delaware and California.
"We appreciate both offices and look forward to continuing these critical conversations to ensure OpenAI can effectively pursue its mission," Taylor added. OpenAI was established as a non-profit in 2015 but shifted to a "capped-profit" model in 2019 and later attempted to restructure as a for-profit organization. During its transition to capped-profit, OpenAI maintained its non-profit arm, which currently holds a controlling stake in the enterprise division. OpenAI explained that the shift aimed to raise the necessary capital for growth and expansion while preserving its non-profit status, directing additional resources toward "philanthropic initiatives" such as healthcare, education, and science. In exchange for maintaining control over the corporate division, the non-profit is reportedly set to receive billions of dollars.
However, not everyone agrees with this move. Among them is Elon Musk, an early investor in OpenAI, who filed a lawsuit opposing the planned transformation. Musk's complaint accuses the startup of abandoning its original non-profit mission, which was designed to ensure AI research benefits all of humanity. Musk sought a preliminary injunction to block OpenAI’s conversion. While a federal judge denied the request, the case is still scheduled for a jury trial in spring 2026. A group of former OpenAI employees, along with Encode—a nonprofit co-sponsor of the failed California SB 1047 AI safety bill—recently submitted an amicus brief supporting Musk's lawsuit. Additionally, organizations including nonprofits and labor groups like the California Truck Drivers Association petitioned California Attorney General Rob Bonta to halt OpenAI's transition to for-profit status, claiming the company "failed to protect its charitable assets."
A number of Nobel laureates, law professors, and civil society organizations also sent letters to Bonta and Delaware Attorney General Kathy Jennings, urging them to intervene and stop the startup’s restructuring efforts. For OpenAI, the stakes are high; failure to complete its for-profit transition by the end of this year or next could result in losing some of the capital raised in recent months, according to reports. It remains unclear what consequences OpenAI might face following its reversal. In a letter to employees posted on OpenAI’s blog earlier this week, CEO Sam Altman stated that he believes OpenAI may ultimately require "tens of trillions of dollars" to achieve its goal of making its services widely accessible to humanity.
