In a major pivot that upends months of planning, ChatGPT maker OpenAI announced Monday that its nonprofit division will retain control over its for-profit operations, abandoning earlier plans to restructure as an independent for-profit entity.
The decision follows intense scrutiny from regulators, criticism from former employees, and legal challenges from early investor Elon Musk, who had argued the conversion would betray the company’s founding mission to develop artificial intelligence that benefits humanity.
“OpenAI was founded as a nonprofit, and is today overseen and controlled by that nonprofit,” OpenAI Board Chairman Bret Taylor wrote in a statement on the company’s blog. “Going forward, it will continue to be overseen and controlled by that nonprofit.”
According to the announcement, OpenAI’s business wing, which has operated under nonprofit oversight since 2019, will transition to a public benefit corporation (PBC) structure. However, unlike previously planned, the nonprofit will maintain both control and a significant ownership stake in the operation.
The company made the decision “after hearing from civic leaders and engaging in constructive dialogue with the offices of the Attorney General of Delaware and the Attorney General of California,” Taylor said.
The reversal marks a significant concession for CEO Sam Altman, who had pushed for the conversion to a standard for-profit model, arguing it was necessary to secure the massive funding required for OpenAI’s ambitious goals. The move puts at risk billions in potential funding, with reports indicating OpenAI’s mega-financing round could be slashed by as much as $10 billion if it doesn’t complete a for-profit restructuring by year’s end.
In a letter to staff published Monday, Altman emphasized that the company may eventually require “trillions of dollars” to fulfill its goal of “making the company’s services broadly available to all of humanity.”
The decision comes after months of opposition from various stakeholders. Musk, who co-founded OpenAI as a nonprofit research lab in 2015, had sought a preliminary injunction to halt the conversion. Although a federal judge denied this request, the case is set to go to a jury trial in spring 2026.
Recent weeks saw mounting pressure from several directions. A group of former OpenAI employees filed an amicus brief supporting Musk’s lawsuit, while various organizations including labor groups petitioned California’s attorney general to block the conversion. Several Nobel laureates and civil society organizations also urged regulators to intervene.
The pushback reflected widespread concern that severing the nonprofit’s control would fundamentally alter OpenAI’s priorities, potentially emphasizing profit over its stated mission of ensuring AI benefits humanity. Former employees argued the existing governance structure was “critical” to maintaining the organization’s founding principles.
While OpenAI will now maintain its nonprofit governance, the structure will change in significant ways. According to Altman, “OpenAI’s nonprofit will become a big shareholder in the PBC in an amount supported by independent financial advisors,” and the company is “moving to a normal capital structure where everyone has stock.”
The decision creates uncertainty around OpenAI’s financing strategy, given reports that the company faced pressure to complete its for-profit conversion or risk losing billions in promised investment. It also raises questions about how OpenAI will compete for talent and resources against rivals like Anthropic and Musk’s xAI, which have recently secured substantial funding.
OpenAI stated it looks forward to continuing discussions with regulators, Microsoft (its largest investor), and newly appointed nonprofit commissioners to advance this modified structure while pursuing its mission of making AI benefit humanity.
