OpenAI drops off plan to restructure into for-profit company

After mounting pressure from critics, OpenAI has scrapped its controversial plan to become a for-profit company. CEO Sam Altman said OpenAI would remain under the control of its founding nonprofit board. Altman wrote in an official OpenAI blog post announcing the latest restructuring decision. OpenAI began as a nonprofit, but Altman has been proposing changes to its structure since his brief ouster from the well-known AI research lab in November 2023.

The company had initially proposed transitioning to a public benefit corporation (PBC) to facilitate capital raising and operational flexibility. However, after consultations with officials from California and Delaware, OpenAI has chosen to keep the nonprofit board in control, transforming the existing capped-profit subsidiary into a PBC while ensuring that the nonprofit retains oversight and influence.

The original plan to restructure was driven by the need for substantial funding to advance OpenAI's mission of developing artificial intelligence (AI). The company acknowledged that the existing structure limited its ability to raise capital on conventional terms. The proposed shift to a PBC was intended to balance the pursuit of profit with the commitment to public benefit.

This development marks a significant moment in the evolution of OpenAI, reflecting the complexities and challenges of balancing innovation, governance, and ethical considerations in the rapidly advancing field of artificial intelligence.