OpenAI Keeps Nonprofit Board, Converts to PBC

OpenAI has reversed course on its plan to become a standard for-profit corporation, instead retaining nonprofit board control following significant criticism and legal challenges from co-founder Elon Musk and state officials in California and Delaware. The company will convert its for-profit LLC into a Public Benefit Corporation (PBC), which permits profit-making but remains under the nonprofit’s oversight. This change is designed to strike a balance between OpenAI’s need for investment to fund AGI research and its foundational goal of ensuring AI benefits humanity. The restructuring follows concerns from civic leaders, regulators, and ex-employees about excessive profit motives and Musk’s lawsuit alleging deviation from OpenAI’s charitable mission. CEO Sam Altman contends that the new structure will still allow OpenAI to attract necessary investment, citing similar approaches by other AI labs. The nonprofit board will continue as a major shareholder and retain operational control in alignment with regulatory and public expectations.