OpenAI remains a non-profit organization and creates a "public benefit corporation"

Author: NaKmo Flow | 5/6/2025

OpenAI remains a non-profit organization and creates a "public benefit corporation"

Prerequisites

  1. Initial structure (2015-2019):

* OpenAI was founded as a non-profit organization with a focus on the ethical development of artificial intelligence.

* In 2019, OpenAI Global, LLC was created as a limited-profit (capped-profit) subsidiary controlled by a non-profit parent entity.

  1. Commercialization Plan (end of 2024):

* Intended to separate commercial operations and issue PBC shares to raise up to \$40 billion in investment.

* The goal is to accelerate AGI development while retaining the mission, but without direct non-profit control.

  1. Public and legal pressure (early 2025):

* Delaware and California prosecutors' offices initiated probes into the legality of reform.

* Community leadership groups and former employees expressed concern about the risk of "mission drift."

The OpenAI decision

"We have decided that the nonprofit organization will retain control of OpenAI....

> We thank the Delaware and California prosecutors' offices for their constructive dialog

and look forward to continued cooperation in the name of AI safety."

- Bret Taylor, OpenAI spokesperson

Key Points of the updated plan:

Conversion of subsidiary*

A limited profit LLC transforms into a public benefit corporation (PBC) with both investors' interests and the company's long-term mission in mind.

* Ownership and control structure

The nonprofit organization remains the majority shareholder of the PBC and retains the right to appoint a majority of its board of directors.

* Mission unchanged

PBC will continue to operate with the goal of "benefiting all mankind" rather than maximizing profits.

Expert opinion

Harry Booth (Scientific American*):

"The move to PBC opens access to large investments, but without rigorous mechanics to protect the mission, the risk remains that business interests will trump ethical concerns."

Kelsey Piper (MIT Technology Review*):

"Retaining direct control of a nonprofit is a major factor in public trust. It demonstrates that OpenAI is willing to put safety and ethics above commercial gain."

Juridical review from the Not For Private Gain letter:

"Assets intended for charitable purposes cannot be reallocated for commercial purposes without good reason. This provision undermined the legitimacy of the original plan."

Industry significance

  1. Balance of development and security.

The new model allows for the significant investment required to compete with large technology players while maintaining oversight of key decisions.

  1. Precedent for other organizations

This hybrid approach can serve as a model for startups and NPOs working in the high-tech field, where it is important to combine mission and funding.

  1. Long-term control of AGI

OpenAI's decision emphasizes that AI safety and ethical issues come to the forefront, even when it comes to multi-billion dollar investments.

Conclusion

Relinquishing full commercial status and moving to a Public Benefit Corporation model under the control of a non-profit parent entity demonstrates the seriousness of OpenAI's intentions. The company retains the flexibility to scale and invest in the development of cutting-edge technologies, and ensures that its core mission of benefiting all of humanity is not jeopardized.