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American Focus > Blog > Economy > OpenAI ditches plan to convert to for-profit business
Economy

OpenAI ditches plan to convert to for-profit business

Last updated: May 5, 2025 12:17 pm
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OpenAI ditches plan to convert to for-profit business
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OpenAI to Remain Non-Profit Under Intense Criticism

OpenAI will remain under the control of the group’s non-profit arm, reversing its initial plans to convert into a for-profit company. The decision comes after facing intense criticism from Elon Musk and others in the AI community.

The company, known for its ChatGPT maker and recently valued at $260 billion, announced that it would convert its existing for-profit subsidiary into a public benefit corporation. This move will lift the current cap on investor returns but will leave the non-profit with ultimate control.

The backlash against OpenAI’s proposed corporate restructuring was significant, with Musk even filing a lawsuit against the company. Former employees and members of the academic AI community also voiced their concerns about the potential shift to a for-profit model.

Critics argued that without the non-profit retaining control, OpenAI would lose its sole fiduciary responsibility to its founding mission of ensuring AI benefits humanity. Sam Altman, the group’s chief executive, emphasized that the decision was not made due to outside pressure but rather a commitment to the organization’s mission.

In addition to facing criticism, OpenAI also navigated complex negotiations with attorneys-general from Delaware and California, where the company is incorporated and headquartered, respectively. These legal authorities sought assurances that OpenAI would remain committed to its charitable purposes and that assets held by the non-profit would be fairly valued in the restructure.

Bret Taylor, chair of OpenAI’s board, stated that the decision to retain control of the organization was made after engaging in constructive dialogue with civic leaders and the offices of the attorneys-general. This decision ensures that OpenAI will continue to prioritize its mission of using AI for the betterment of society.

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The commitment to remaining a non-profit entity underscores OpenAI’s dedication to its core values and mission, despite the challenges and criticisms it has faced. As the company moves forward, it will continue to leverage AI technology for the benefit of humanity while upholding its non-profit status.

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