After months of controversy and legal battles, including a high-profile lawsuit from Elon Musk, OpenAI has decided not to move forward with its full transition to a for-profit structure. Instead, the company will retain its non-profit foundation, while the commercial operations will continue under a Public Benefit Corporation (PBC) model.
According to The Verge, OpenAI has reversed its earlier considerations and reaffirmed its commitment to its non-profit arm. “OpenAI was founded and is run as a non-profit today,” said OpenAI Chairman Bret Taylor. “That will continue to be the case.” This decision reportedly followed consultations with the attorneys general of California and Delaware.
OpenAI’s original mission focused on the safe and transparent development of artificial intelligence for the benefit of all. While the company was initially set up as a non-profit, it explored going fully for-profit in recent years to attract more investment. In 2019, it introduced a capped-profit structure, where the commercial efforts remained under the governance of the non-profit entity. The latest attempt to shift completely toward commercialization sparked widespread concern.
Pushback from Musk and Public Advocates
One of the most vocal critics of this potential shift was Elon Musk, an early investor in OpenAI. He filed a lawsuit, claiming the company had deviated from its founding principles. Musk argued that OpenAI’s original purpose was to make AI tools accessible to humanity as a whole. Although the court rejected Musk’s request to halt the structural changes, the case remains ongoing and is expected to be heard in 2026.
Musk’s concerns were echoed by former OpenAI employees, human rights organizations, and several Nobel Prize winners, all of whom urged the attorneys general to stop the company’s transition. Labor unions also joined the opposition, adding their voices to the growing public debate.
Despite OpenAI’s decision to abandon full commercialization, questions remain about how this will affect its funding, notes NIXSolutions. Reports have suggested that without the switch to a fully for-profit model, the company might risk losing some of its previously secured investments. Yet we’ll keep you updated as more information becomes available regarding how the decision may impact OpenAI’s long-term financial strategy and partnerships.