Categories
May 6, 2025
San Francisco, CA— OpenAI has officially canceled its controversial plan to alter its governance structure to a fully for-profit entity. Instead, the organization has decided to maintain oversight by nonprofit entities amid growing criticism and legal scrutiny.
The organization, best known for developing advanced artificial intelligence systems like ChatGPT, had previously proposed transitioning to an independent public benefit corporation (PBC) to attract significant investment—reportedly up to $30 billion. OpenAI announced it will keep its nonprofit structure after facing opposition from its stakeholders, AI experts, and legal government officials.
“The board has decided that preserving the nonprofit’s control is the most effective way to achieve our vision of ensuring artificial general intelligence is beneficial to humanity in general,” said OpenAI CEO Sam Altman in a statement.
The new governance structure will allow OpenAI’s nonprofit board members to be appointed to the board of the for-profit subsidiary with oversight and give the company a limited amount of flexibility in raising capital. This hybrid structure seeks to ensure that financial goals and ethical requirements.
Many critics expressed concerns about the plan for conversion that could compromise the goal of OpenAI in that it focuses on shareholder profits over equity and security in the global economy. The change also attracted the attention of the attorneys general of California and Delaware, further escalating the public pressure.
While some members of the AI community remain skeptical of the governance reforms, many see the change as an improvement in openness and transparency for AI development and accountability.
The decision is a crucial moment for OpenAI and the larger artificial intelligence sector as debates continue on how to regulate and finance the incredibly powerful AI technology in a responsible way.
Stay up to date with the latest news from AtoZ Tech World.
