OpenAI has decided to stick with its nonprofit model, reversing its earlier intentions to transition into a for-profit entity. On Monday, the organization announced that its nonprofit status will continue to oversee the artificial intelligence company.
In a message to employees, CEO and co-founder Sam Altman explained that the nonprofit had consulted with civic leaders and engaged in discussions with the Attorney Generals of California and Delaware before making this decision.
“OpenAI was established as a nonprofit organization and will remain one, overseeing and managing for-profit entities now and into the future,” Altman noted. “This remains unchanged.”
The commercial arms of nonprofit organizations will transition into public benefit corporations (PBCs) that aim to balance both shareholder interests and mission-driven goals, as Altman mentioned in a blog post on Monday.
The nonprofit will manage these PBCs, becoming significant shareholders while also providing resources for additional programs, Altman stated.
“As these PBCs expand, the resources for the nonprofit will increase, allowing for much more to be accomplished,” he added, referring to a nonprofit committee focused on ensuring that AI benefits everyone, rather than just a select few.
Altman emphasized that this structure “makes sense” for OpenAI.
Last year, OpenAI indicated that it needed to raise significantly more capital than previously thought, laying the groundwork for its restructuring.
This decision comes amidst ongoing tensions with high-profile co-founder Elon Musk, who has been critical of OpenAI’s profit-driven ambitions. Musk filed a lawsuit against Altman, arguing that the company was straying from its foundational goals in pursuit of profit rather than the public good.
Earlier this year, Musk escalated the situation by gathering a group of investors to propose a $97.4 billion bid for the nonprofit overseeing OpenAI. In February, he suggested it was time for OpenAI to revert to its original, open-source focus on safety.
Altman promptly rejected this bid, insisting that OpenAI “is not for sale.” The board of OpenAI unanimously denied the offer, which Musk’s lawyers stated would be withdrawn if the restructuring plan was halted.
