OpenAI CEO Sam Altman announced Monday that the company behind ChatGPT will continue to be run as a non-profit, abandoning a contested plan to convert into a for-profit organization.
OpenAI has announced a revised corporate restructuring plan that maintains control under its non-profit board, addressing mounting pressure from investors and AI safety advocates, reports AFP.
The company, which launched as a non-profit in 2015, had later introduced a capped for-profit arm to attract major investors, including Microsoft.
Intense investor concern followed the board’s unexpected firing of CEO Sam Altman in 2023, which triggered internal revolt and his eventual reinstatement. In response, investors pushed for a full transition to a traditional for-profit structure within two years, citing the need for greater stability and returns.
An earlier plan to convert OpenAI into a public benefit corporation (PBC) drew backlash from AI safety proponents and co-founder Elon Musk, who sued the company, claiming the move violated its founding mission. Altman said the decision to retain the non-profit's control followed discussions with civic leaders and the attorneys general of California and Delaware.
Under the revised structure, OpenAI’s for-profit subsidiary can continue generating revenue, but will remain supervised by the non-profit board to balance profit-making with societal responsibility. Altman described the move as necessary to support “rapid, safe progress” and to ensure AI technology remains broadly beneficial.
SoftBank, which announced a $30 billion investment in March, had reportedly made the transition to a for-profit model a condition of its funding. A document revealed that if OpenAI fails to restructure by year-end, the total investment could be reduced to $20 billion.
OpenAI’s growing funding needs stem from its pursuit of advanced AI systems requiring massive computing power. Its March funding round, led by SoftBank, raised $40 billion and valued the company at $300 billion—marking the largest-ever capital raise for a startup. OpenAI shot to global prominence with the launch of ChatGPT in 2022.
Bd-pratidin English/FNC
