OpenAI will continue to operate under its nonprofit governance structure, CEO Sam Altman announced Monday, following intense scrutiny and regulatory consultations. This decision marks a major shift in the company’s trajectory after months of speculation about its potential conversion into a fully for-profit corporation.
In a statement posted to the company’s website, Altman said:
“We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware.”
Investors vs. Ethics: Tensions Behind OpenAI’s Structure
The debate around OpenAI’s corporate structure had escalated in recent months. Investors backing the artificial intelligence giant, especially after the commercial success of ChatGPT, had pushed for a change to a for-profit model to ensure stronger returns on their massive investments.
However, AI safety advocates and critics voiced strong opposition, arguing that a profit-driven OpenAI could pose significant risks without the oversight of a nonprofit board committed to ethical AI development.
Founded in 2015 as a nonprofit research organization, OpenAI later adopted a hybrid structure, creating a “capped” for-profit arm to allow limited returns while keeping the nonprofit in control.
Abandoning the Full For-Profit Shift
Under a controversial proposal unveiled last year, OpenAI planned to transition into a Public Benefit Corporation (PBC) — a move that would potentially attract billions in funding but shift control away from nonprofit governance.
The plan, however, sparked backlash from co-founder Elon Musk — who left OpenAI in 2018 and later filed a lawsuit — and from regulators concerned about the future of safe AI development.
Approval from regulators in California and Delaware, where OpenAI is headquartered and registered, would have been essential for the restructure to proceed. That process now appears shelved.
A New Middle Ground: Profit Under Nonprofit Oversight
In the updated plan, OpenAI’s for-profit arm can pursue profits more freely, but remains accountable to the nonprofit board. This hybrid model aims to balance commercial viability with ethical guardrails.
“We believe this sets us up to continue to make rapid, safe progress and to put great AI in the hands of everyone,” Altman added.
The Power Struggles Behind the Scenes
OpenAI made global headlines in 2022 with the release of ChatGPT, reshaping public perception of generative AI. But the company faced internal turmoil in late 2023 when Altman was abruptly fired by the board, triggering a major crisis. He was reinstated days later after staff and investors rallied in his support.
The governance crisis pushed new investors to demand more traditional corporate structures — including the controversial for-profit shift that has now been abandoned.
OpenAI’s Future: Ethical AI at Scale?
With this decision, OpenAI reaffirms its commitment to responsible AI development. The updated structure may serve as a model for balancing innovation, profitability, and public interest in the fast-evolving AI landscape.
