Matt O’Brien and Talia Beatty
Openai reversed its course several months after pursuing plans to convert it into a for-profit company, saying its nonprofit will continue to manage companies that manufacture ChatGpt and other artificial intelligence products.
“We heard the voices from our civic leaders and discussed with the California Attorney General and the Delaware office, and then the nonprofit decided to maintain control,” CEO Sam Altman said in a letter to employees.
Bret Taylor, chair of Altman and Openai’s nonprofit committee, said the board has decided that the nonprofit has maintained control of Openai. Nonprofits already have a for-profit division, which translates to public benefits companies that “have to consider the benefits of both shareholders and missions,” Taylor said.
However, Taylor on Monday refused to say much of the ownership of the new public benefits corporation. In a call with reporters, Altman said that if the nonprofit is a public benefit company, it would select a board member.
Utilities were first created in Delaware in 2013, with other states adopting the same or similar laws requiring businesses to pursue social interests as well as profits. Utilities, including the Amalgamate Bank and the online education platform Coursera, need to define their social interests.
Altman said the conversion from a limited liability company to a public benefit company “is simply set up a more understandable structure to do what companies in our range have to do.”
“There’s more demand than you would expect to see as there’s a huge demand for AI tools,” says Altman. With more capital access, Openai can be more likely to pursue mergers and acquisitions.
Altman said it was “probably easy” to raise funds, considering the mission of “we don’t want to be a completely normal company,” and “we believe this is far more than what we need to raise funds.”
“We had a lot of investors who think Openai is a great business but don’t care or appreciate our mission, and we seem to make it happy that we don’t have their money,” says Altman.
Openai co-founders, including Altman and Tesla CEO Elon Musk, have launched it as a non-profit research laboratory on its mission to safely build artificial general information, or what is known as AGIs, originally for the benefit of humans. Almost ten years later, Openai reports a market value of $300 billion, counting 400 million users per week for its flagship product, ChatGPT.
Last year, Openai first outlined plans to transform its core governance structure, but it faced many challenges. One is a lawsuit from Musk that denies Altman with companies that betray the establishment principles that led Musk to invest in charities. Last week, a federal judge dismissed some of Musk’s allegations and allowed others to proceed to trial next year.
Openai faced scrutiny from the top law enforcement officers in Delaware, where the company was founded, and California, which operates at its San Francisco headquarters. The California Attorney General’s Office said in a statement that it is considering the plan, saying, “This is an ongoing issue and we are having continuous conversations with Open AI.”
The Delaware Attorney General’s Office did not immediately return a request for comment.
Many supporters, including former Openai employees and other charities, petitioned Democrats, both California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings, to use their powers to protect the charity of the Open and to stop planned restructuring.
Some were worried about what would happen if ChatGpt makers met their ambitions to build AI that surpasses humans, but no longer accountable for their public mission to protect their technology from causing miserable harm.
Several other artificial intelligence companies have chosen to incorporate them as public benefits companies, including humanity and Zai’s companies. However, Openai remains unique in that the public benefits scheme is still managed by the nonprofit board of directors.
Original release: May 5, 2025, 3:34pm EDT
