OpenAI has decided that its non-profit organization will continue to control its commercial division. It had previously planned to transform into a regular for-profit company.
This is stated in the press release.
According to OpenAI, their business unit, which has been under the nonprofit arm of the organization since 2019, will be transformed into a Public Benefit Corporation (PBC). The nonprofit will remain the primary owner and control of the corporation.
The decision was made after consultations with community leaders and the attorneys general of Delaware and California. OpenAI thanked them for the conversations and said it looks forward to continuing to discuss how best to fulfill its mission.
OpenAI was founded in 2015 as a non-profit organization, and in 2019 it became a so-called capped-profit company and retained a separate non-profit structure that owns a controlling stake.
OpenAI explained its previous attempt to change ownership to a for-profit one by saying that it was necessary to attract investments, which were planned to be directed, in particular, to charitable projects in the fields of health, education, and science. In return, the non-profit part of the company would receive billions of dollars in profits as a major shareholder.
The idea has been criticized. Among the critics was Elon Musk, one of OpenAI’s early investors. He sued, accusing the company of betraying its original mission of providing a common good for humanity through the development of artificial intelligence, and asked the court to stop the process of turning OpenAI into a for-profit company. The judge refused, but the case will go to a jury in 2026.
OpenAI needs to complete its transformation into a commercial company by the end of this year or next, otherwise it could lose some of its new investment.
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