OpenAI, the tech company renowned for developing ChatGPT, has officially abandoned its controversial plan to transition into a for-profit entity, opting instead to uphold its original nonprofit model.
The decision comes after months of internal discussions, external criticism, and growing pressure from investors and AI safety advocates.
On Monday, OpenAI’s CEO Sam Altman confirmed the company’s commitment to its nonprofit status in an email to staff, which was also shared on OpenAI’s website. The announcement marks a significant pivot from the company’s 2019 introduction of a “capped-profit” model, which allowed for some return on investment while still maintaining mission-driven oversight.
Altman explained that the decision was made following feedback from civic leaders and consultations with the Attorneys General of California and Delaware, where OpenAI is registered.
This shift comes in response to growing concerns, particularly from high-profile figures such as co-founder Elon Musk, about the ethical implications of OpenAI’s direction and the potential dangers of prioritizing profit over safety and societal benefit.
“We decided for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware,” Altman stated in his email.
Founded in 2015, OpenAI initially positioned itself as a nonprofit organization focused on the safe development of artificial intelligence. However, the company introduced a “capped-profit” model in 2019 to raise much-needed funds while attempting to maintain oversight over its mission.
Last year, OpenAI proposed a full transition into a public benefit corporation (PBC), a move that sparked intense backlash from critics who feared it would compromise the company’s commitment to AI safety in favor of financial returns. That proposal would have required regulatory approval from both California and Delaware, and the process was further complicated by legal challenges, including a lawsuit from Musk, who expressed concerns about the future direction of the company.
Under the revised strategy, OpenAI will maintain control over its profit-generating division while offering greater flexibility in fundraising and growth. Altman emphasized that the new structure would allow the company to continue making “rapid, safe progress” and ensure that its cutting-edge AI technologies, such as ChatGPT, are accessible to the public.
“We believe this sets us up to continue to make rapid, safe progress and to put great AI in the hands of everyone,” Altman said.
OpenAI’s commitment to a nonprofit model comes at a time when the company’s prominence in the AI field has reached unprecedented levels, particularly following the success of ChatGPT, which has become a household name since its launch in 2022. The company has also faced challenges, including a leadership crisis in late 2023 when Altman was briefly removed by the board, only to be reinstated after significant internal and external pressure.
