Organizational Strategy Shift: OpenAI Abandons Transition to For-Profit Company, Sam Altman States Non-Profit Structure Best Aligns with Long-Term Interests

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OpenAI Abandons Transformation into a Profit-making Company

Controversial Stance on Profit Transformation

Financial Status and Future Outlook

ChatGPT developer OpenAI announced in its latest press release that it will officially abandon its plan to fully transform the company into a profit-making enterprise and will instead convert its profit-making division into a “Public Benefit Corporation” (PBC), which will continue to be controlled by its nonprofit organization. This decision indicates a significant strategic shift for OpenAI, which stated in its blog announcement:

“OpenAI was established as a nonprofit organization and is currently overseen and controlled by that nonprofit organization, which will maintain this structure in the future.”

Although a PBC is a profit-making company, it is legally required to prioritize its social mission alongside shareholder responsibilities. OpenAI emphasized that the new corporate structure will not affect its ability to raise funds, noting that the company’s funding needs for artificial intelligence (AI) development have already reached hundreds of billions of dollars, potentially even trillions in the future.

CEO Sam Altman informed employees:

“We can continue to advance AI development without compromising our fundraising capabilities while staying true to the mission from our founding.”

OpenAI was founded in 2015 as a nonprofit entity. In 2019, to expand funding for AI research and development, the company established a profit-making division, but this division has always been controlled by the nonprofit parent organization. In 2024, OpenAI claimed that a full transformation into a profit-making company was a “necessary step” to raise the substantial computational resources and capital required to meet the demands of large AI models. However, this move sparked controversy within the industry and among co-founders.

Elon Musk, CEO of Tesla and one of OpenAI’s co-founders, filed a lawsuit against Sam Altman last November, accusing him of violating the foundational contribution agreement to the charity and alleging that he was “manipulating” the organizational structure of OpenAI in an attempt to privatize and profitize it.

According to reports from Reuters, despite OpenAI’s announcement to maintain a nonprofit structure, Musk’s lawyer stated that there are currently no plans to withdraw the lawsuit against OpenAI. The lawyer remarked:

“This announcement conceals some key details regarding the so-called ‘nonprofit control’ arrangement, particularly that the stake the nonprofit organization will receive in Altman’s profit-making enterprise has been significantly reduced—currently this nonprofit still holds a majority stake in the enterprise.”

According to a report by Bloomberg in March, OpenAI expects its revenue to reach $12.7 billion by 2025, increasing to $29.4 billion by 2026. In March of this year, the company completed a $40 billion funding round led by SoftBank, valuing the enterprise at $300 billion.

Despite differing opinions on OpenAI’s financial strategies and future direction, Sam Altman emphasized that returning to the core nonprofit values is “the most beneficial choice for the company and the global AI ecosystem in the long run.”