OpenAI decides to abandon commercialization and remain managed by a non-profit organization



OpenAI, which develops AI such as ChatGPT, is structured as a 'non-profit organization with a for-profit subsidiary,' but it has been revealed that it plans to commercialize OpenAI in 2024. However, this plan has received backlash from many quarters, and finally OpenAI has announced that it will abandon commercialization and maintain management by a non-profit organization.

Evolving OpenAI's structure | OpenAI
https://openai.com/index/evolving-our-structure/



OpenAI says nonprofit retain control of company, bowing to pressure
https://www.cnbc.com/2025/05/05/openai-says-nonprofit-retain-control-of-company-bowing-to-pressure.html

OpenAI dials back conversion plan, nonprofit to retain control | Reuters
https://www.reuters.com/business/openai-remain-under-non-profit-control-change-restructuring-plans-2025-05-05/

OpenAI was originally a non-profit research organization founded in 2015 by Sam Altman, Elon Musk, and investor Peter Thiel. At the time of its founding, the organization emphasized developing AI as open source, but later made its source code private and has recently launched a paid service for ChatGPT.

In order to carry out commercial activities, OpenAI established a for-profit subsidiary, OpenAI Global, LLC, in 2019, which is owned and managed by the non-profit organization OpenAI Inc. However, in June 2024, CEO Altman hinted at commercializing OpenAI, and in September of the same year, it was reported that Altman was in negotiations to acquire shares in OpenAI.

OpenAI may turn into a for-profit organization, CEO Sam Altman reportedly in negotiations to acquire 7% of all shares - GIGAZINE



Then in December, it was officially announced that the current structure of a 'non-profit organization with a for-profit subsidiary' would be changed to one led by a for-profit company.

OpenAI announces its intention to shift to a form in which commercial companies will lead the business - GIGAZINE



There has been a backlash and criticism against the commercialization of OpenAI, with co-founder Musk filing an injunction to block the commercialization of OpenAI, and Meta, a competitor in the AI development field, also requesting that the US government block the commercialization of OpenAI .

Elon Musk files for court injunction to block commercialization of OpenAI - GIGAZINE



In addition, a group of former OpenAI employees, Nobel laureates, law professors, and civil society organizations sent a letter to the attorneys general of California and Delaware in the United States in April 2025, urging them to block OpenAI's commercialization due to safety concerns. The letter argues that commercializing OpenAI would subvert its original charitable purpose and remove important safeguards by eliminating the non-profit organization's control.

On May 5, 2025, OpenAI announced that 'OpenAI will continue to be overseen and managed by a non-profit organization.' According to the statement, the existing for-profit subsidiary, OpenAI Global, LLC, will be transitioned to a Public Benefit Corporation (PBC) , which will pursue public benefit while being a for-profit company, and the non-profit organization, OpenAI Inc., will continue to own and manage PBC.

In its post on X, OpenAI emphasized that 'OpenAI will continue to be managed by its current non-profit organization,' 'the existing for-profit entity will become the PBC,' 'the non-profit organization will manage and be a significant owner of the PBC,' and 'the non-profit organization and the PBC will continue to have the same mission.'



'After listening to civic leaders and speaking with the attorneys general's offices of California and Delaware, we have decided that nonprofit governance will continue,' Altman said in a statement to employees. 'OpenAI was founded as a nonprofit, today it is a nonprofit overseeing and governing a for-profit section, and it will continue to be a nonprofit overseeing and governing a for-profit section. That will remain the case.'

'The structure we're considering would keep the nonprofit in control of OpenAI. We'd convert a limited liability company that's a subsidiary of the nonprofit into a PBC,' OpenAI Chairman Brett Taylor said in a video call with reporters. 'That would change the equity structure of OpenAI, so that employees, investors and the nonprofit would own shares in the PBC.'

However, it has also been reported that Microsoft, OpenAI's largest investor, is trying to resist the restructuring plan announced by OpenAI.

OpenAI Restructuring: Microsoft (MSFT) Is Key Holdout of Plan - Bloomberg
https://www.bloomberg.com/news/articles/2025-05-05/microsoft-said-to-be-key-holdout-for-openai-restructuring-plan

Microsoft, which has invested $13.75 billion in OpenAI to date, wants to ensure that its investment will be properly protected even after OpenAI's restructuring plan is implemented. An anonymous source told Bloomberg that Microsoft and OpenAI are still in the process of negotiating the details of the restructuring plan.

In response to OpenAI's announcement, Musk's lawyer, Mark Toberoff, said in a statement that 'Today's announcement does not change the fact that OpenAI will develop closed-source AI for the benefit of Altman, his investors, and Microsoft.' 'OpenAI's announcement is a transparent subterfuge that does not address the core issues,' he said, indicating that he will continue with the lawsuit.

Elon Musk to go ahead with lawsuit against OpenAI despite nonprofit control statement, lawyer says | Reuters
https://www.reuters.com/business/elon-musk-keep-lawsuit-against-openai-despite-nonprofit-control-statement-lawyer-2025-05-06/



Elon Musk Lawyer Says OpenAI Restructuring Update 'Changes Nothing' - Bloomberg
https://www.bloomberg.com/news/articles/2025-05-06/musk-s-lawyer-says-openai-restructuring-update-changes-nothing

In response, an OpenAI spokesperson said, 'Elon's continued baseless lawsuit only proves that the lawsuit itself is a malicious attempt to delay our action.'

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