OpenAI has reversed its previous plans to transition into a standard for-profit entity, announcing on May 5 that it will instead reinforce its nonprofit status. The organization’s for-profit arm will become a Public Benefit Corporation (PBC), which continues to generate revenue while the nonprofit parent exerts primary control. CEO Sam Altman stated this change follows consultations with civic leaders and regulatory officials, aiming to scale responsibly and ensure Artificial General Intelligence (AGI) benefits all.
This pivot comes in the wake of legal disputes with co-founder Elon Musk, who accused OpenAI of straying from its mission and sought to stop its commercial transition via lawsuit. Musk reportedly offered $97 billion to buy OpenAI’s nonprofit arm—an offer that was declined. Musk’s legal team criticized the PBC move as cosmetic, claiming it still allows private parties like Sam Altman and Microsoft to profit from assets meant for the public good. OpenAI, in turn, has filed a countersuit accusing Musk of attempting to undermine the organization through a false acquisition and negative publicity campaign.