OpenAI said Tuesday it has completed a major restructuring of its business to become a public benefit corporation, after attorneys general in Delaware and California confirmed they would not oppose the plan.
The move allows the developer of ChatGPT to more easily generate profits while its nonprofit arm retains overall control. The announcement follows more than a year of negotiations centered on the company’s governance and investor influence.
Chief Executive Sam Altman told reporters that the most likely path for the company now includes a future public listing to meet growing capital demands, although no timeline was announced.
OpenAI also finalized a new partnership agreement with longtime backer Microsoft, which will now hold roughly a 27% stake in the for-profit entity — just ahead of the nonprofit’s stake. Microsoft’s investment, valued at $135 billion, remains a crucial part of OpenAI’s funding and infrastructure strategy.
Delaware Attorney General Kathy Jennings said her office would continue to monitor whether OpenAI maintains its charitable mission and AI safety standards. California Attorney General Rob Bonta delivered a similar assurance, saying officials will “keep a close eye” on the tech firm.
Bret Taylor, chair of OpenAI’s board, said the restructure simplifies the corporate framework and ensures the nonprofit remains in control “with a direct path to major resources before AGI arrives.” AGI — or artificial general intelligence — refers to highly autonomous systems that outperform humans in most economically valuable tasks.
The revised Microsoft agreement keeps the tech giant as a key commercial partner. It grants Microsoft access to OpenAI’s advanced technology until at least 2030, or until AGI is independently verified by an expert panel. Microsoft will also retain product rights through 2032. Analysts at JP Morgan called the deal a “positive development,” noting Microsoft can now count on seven years of guaranteed cooperation.
The restructuring follows OpenAI’s recent expansion plans, including a massive data center project in Texas in partnership with Oracle and SoftBank, and additional facilities across several continents. Altman said these investments bring the company’s long-term financial commitments to roughly $1.4 trillion.
OpenAI’s nonprofit arm — now named the OpenAI Foundation — plans to allocate up to $25 billion to initiatives in healthcare, disease prevention and cybersecurity. Details on the funding timeline were not disclosed.
Despite safeguards ensuring nonprofit oversight, some critics remain unconvinced. Robert Weissman of Public Citizen said the arrangement risks prioritizing commercial interests over public benefit, arguing that nonprofit control “is illusory.”
The restructuring comes nearly a year after Altman’s brief ousting by the nonprofit’s board sparked internal turmoil and a push for governance reforms.
OpenAI continues to face a legal challenge from Tesla and xAI CEO Elon Musk, who claims the organization abandoned its original mission. A federal judge earlier declined to block the restructuring but signaled Musk’s lawsuit could proceed quickly.
Source: AP