OpenAI has reversed course in the process of transforming into a for-profit entity, announcing on Monday that its non-profit arm would continue to control the business that makes ChatGPT and other artificial intelligence (AI) products. Previously, the company had sought more independence for its for-profit division. "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," said CEO Sam Altman in a letter to employees. Altman and the chair of OpenAI's non-profit board, Bret Taylor, said the board made the choice for the non-profit to retain control of OpenAI. A press release from the company said that the for-profit portion of the company, through which Altman has been able to raise billions to fund OpenAI's work, would transition to a public benefit corporation, a mission-driven designation for a corporate structure that is still aimed at profit but also "has to consider the interests of both shareholders and the mission".

In the latest development in an ongoing struggle over OpenAI's future direction--and potentially the future of artificial intelligence itself--dozens of prominent figures are urging the Attorneys General of California and Delaware to block OpenAI's controversial plan to convert from its unique nonprofit-controlled structure to a for-profit company. In a letter made public April 23, signatories including "AI Godfather" Geoffrey Hinton, Harvard legal professor Lawrence Lessig, and several former OpenAI researchers argue the move represents a fundamental betrayal of OpenAI's founding mission. "The proposed restructuring would eliminate essential safeguards, effectively handing control of, and profits from, what could be the most powerful technology ever created to a for-profit entity with legal duties to prioritize shareholder returns," the letter's authors write. It lands as OpenAI faces immense pressure from the other side: failing to implement the restructure by the end of the year could cost the company 20 billion and hamstring future fundraising. OpenAI was founded in 2015 as a non-profit, with its stated mission being to ensure that artificial general intelligence (AGI) "benefits all of humanity" rather than advancing "the private gain of any person."

On the Friday after Christmas, OpenAI published a blog post titled "Why OpenAI's structure must evolve to advance our mission." In it, the company detailed a plan to reorganize its for-profit arm into a public benefit corporation (PBC). In the weeks since that announcement, I've spoken to some of the country's leading corporate law experts to gain a better understanding of OpenAI's plan, and, more importantly, what it might mean for its mission to build safe artificial general intelligence (AGI). "Public benefit corporations are a relatively recent addition to the universe of business entity types," says Jens Dammann, professor of corporate law at the University of Texas School of Law. Depending on who you ask, you may get a different history of PBCs, but in the dominant narrative, they came out of a certification program created by a nonprofit called B Lab. Companies that complete a self-assessment and pay an annual fee to B Lab can carry the B Lab logo on their products and websites and call themselves B-Corps.

OpenAI has laid out a plan to revamp its corporate structure next year, saying it would create a public benefit corporation to manage its growing business and ease the restrictions imposed by its current non-profit parent. Rumors have swirled that OpenAI was in the process of shifting to a largely for-profit company, but this is the first time it has detailed the proposal publicly. Under the proposed structure, the public benefit corporation, which is a for-profit corporate entity, will run and control OpenAI's operations and business, while the non-profit will hire a leadership team and staff for charitable initiatives in sectors such as healthcare, education and science. This new structure will give the for-profit arm of OpenAI much more control. In a blogpost, the company said it is "a stronger non-profit supported by the for-profit's success".

Following months of speculation, OpenAI has finally shared how it plans to become a for-profit company. In a blog post penned by its board of directors, OpenAI said Thursday it plans to transform its for-profit arm into a Public Benefit Corporation sometime in 2025. PBCs or B Corps are for-profit organizations that attempt to balance the interests of their stakeholders while making a positive impact on society. "As we enter 2025, we will have to become more than a lab and a startup -- we have to become an enduring company," OpenAI said, adding that many of its competitors are registered as PBCs, including Anthropic and even Elon Musk's own xAI. "[The move] would enable us to raise the necessary capital with conventional terms like others in this space."

OpenAI, the developer of the groundbreaking ChatGPT chatbot, is preparing to overhaul its corporate structure and become a for-profit business. The startup's chief executive, Sam Altman, acknowledged on Thursday that it was "not a normal company" after another surprising development at OpenAI this week when its its chief technology officer, Mira Murati, resigned. Her departure was quickly followed by the announcement that two other executives had quit. The company is synonymous with an artificial intelligence boom triggered by the emergence, in 2022, of OpenAI's signature product, a chatbot that stunned users with its ability to craft convincing, human-like responses to an array of prompts. Altman, in turn, has become the poster child for a technology that is advancing rapidly and is being developed by the world's largest tech companies, including Microsoft – OpenAI's biggest backer – Google, the Facebook owner Meta and Amazon.