{"id":846158,"date":"2025-05-06T09:11:41","date_gmt":"2025-05-06T14:11:41","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/05\/06\/openai-to-stay-nonprofit-scrap-proposed-overhaul\/"},"modified":"2025-05-06T09:11:41","modified_gmt":"2025-05-06T14:11:41","slug":"openai-to-stay-nonprofit-scrap-proposed-overhaul","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/05\/06\/openai-to-stay-nonprofit-scrap-proposed-overhaul\/","title":{"rendered":"OpenAI to stay nonprofit, scrap proposed overhaul"},"content":{"rendered":"
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The change won’t comprise the ChatGPT-maker’s ability to raise funds for development, CEO Sam Altman said. <\/p>\n

\"OpenAI<\/picture><\/div>\n
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ChatGPT-maker OpenAI has abandoned plans to become a for-profit company and reaffirmed commitment to its nonprofit status.\u00a0<\/p>\n

In a May 5 blog post, OpenAI confirmed<\/a> plans to convert its for-profit business unit into a so-called Public Benefit Corporation (PBC), which would remain under the nonprofit\u2019s control. PBCs are for-profit companies that are legally obligated to prioritize a social mission alongside the interests of shareholders. <\/p>\n

The plans mark a reversal for OpenAI, which had previously floated a for-profit conversion involving spinning out the nonprofit entity. <\/p>\n

\u201cOpenAI was founded as a nonprofit, and is today overseen and controlled by that nonprofit. Going forward, it will continue to be overseen and controlled by that nonprofit,\u201d the ChatGPT-maker said.\u00a0<\/p>\n

This can be done without compromising OpenAI\u2019s ability to raise funds for AI development, which \u201ccurrently requires hundreds of billions of dollars and may eventually require trillions of dollars,\u201d OpenAI\u2019s CEO, Sam Altman, said<\/a> in a letter to employees announcing the decision. <\/p>\n

In 2024, OpenAI took a starkly different view, asserting <\/a>that the for-profit entity was \u201cnecessary\u201d for raising capital to amass the \u201cvast quantities of compute\u201d needed to run AI models.\u00a0<\/p>\n

\"Law,
OpenAI\u2019s May 5 governance announcement. Source: <\/em>OpenAI<\/em><\/a><\/figcaption><\/figure>\n

Related: <\/strong><\/em>OpenAI expects to 3X revenue in 2025 but Chinese AI firms are heating up<\/strong><\/em><\/a><\/p>\n

Controversial Plans\u00a0<\/strong><\/h2>\n

OpenAI was originally founded as a nonprofit in 2015, and in 2019 it created a for-profit entity purportedly to help AI developers raise funds. The for-profit unit has remained under the nonprofit\u2019s control since then.\u00a0<\/p>\n

In 2024, Tesla CEO Elon Musk \u2014 one of OpenAI\u2019s cofounders \u2014 sued <\/a>Altman for allegedly \u201cviolating terms of Musk\u2019s foundational contributions to the charity,\u201d according<\/a> to a November court filing.\u00a0<\/p>\n

In the lawsuit, Musk alleges Altman \u201cassiduously manipulated Musk into co-founding their spurious nonprofit venture, OpenAI,\u201d while secretly planning to convert OpenAI<\/a> to a for-profit entity.\u00a0<\/p>\n

Musk has since launched xAI, the developer of AI chatbot Grok, which he said has fallen victim to OpenAI\u2019s allegedly anti-competitive practices.<\/p>\n

OpenAI\u2019s leadership expects its revenue to hit $29.4 billion by 2026, Bloomberg\u00a0reported<\/a>\u00a0in March. It forecasts earning revenues<\/a> of $12.7 billion in 2025. <\/p>\n

In March, OpenAI raised $40 billion from Softbank at a $300 billion valuation. <\/p>\n

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