BBC: OpenAI's Nonprofit Control and Restructuring (Updated)

We joined BBC News to discuss OpenAI's potential intent to minimize nonprofit board control. It follows reports that the company was working to restructure its core business into a for-profit benefit corporation no longer controlled by its nonprofit board, a move that would also give CEO Sam Altman equity in the company for the first time.

Updated: Following the backlash, OpenAI announced in May 2025 that its nonprofit would remain in control after all, with the company converting instead to a public benefit corporation in which the nonprofit retains a large, yet-to-be-determined stake.

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OpenAI Control and Structure

OpenAI was founded in 2015 as a nonprofit AI research organization, with a mission enshrined in its Charter to ensure artificial general intelligence benefits all of humanity. In 2019, it created a for-profit subsidiary to raise the capital needed to train increasingly expensive models, but structured the arrangement so the nonprofit board retained ultimate control, giving it, at least formally, a fiduciary duty to humanity rather than to shareholders or investors. That control became global news in November 2023, when the board briefly ousted Altman before he was reinstated days later with the backing of Microsoft and OpenAI's employees.

By September 2024, reports emerged that OpenAI was working to remove nonprofit control entirely, converting into a for-profit benefit corporation in a restructuring that could value the company at $150 billion and remove the cap on investor returns. The plan drew significant pushback: Elon Musk pursued litigation arguing the conversion would violate OpenAI's founding charitable purpose, a coalition of California nonprofits and former employees, including Geoffrey Hinton, petitioned state regulators to intervene, and the California and Delaware Attorneys General opened scrutiny of the process. Facing this backlash, OpenAI announced in May 2025 that the nonprofit would remain in control, with chairman Bret Taylor citing dialogue with both state Attorneys General as a factor in the decision, while still moving away from the capped-profit structure that had reportedly discouraged some investors.

References

¹ Hu, Krystal, and Kenrick Cai. "OpenAI to Remove Non-Profit Control and Give Sam Altman Equity, Sources Say." Reuters. September 26, 2024.

² Sherman, Natalie. "OpenAI Says Non-Profit Will Remain in Control After Backlash." BBC News. May 6, 2025.

³ Horwitz, Jill, Ellen P. Aprill, and Rose Chan Loui. "Legal Complications Await If OpenAI Tries to Shake Off Control by the Nonprofit That Owns the Rapidly Growing Tech Company." The Conversation. November 20, 2024.