OpenAI abandons the transition to a for-profit company
ChatGPT developer OpenAI announced in its latest press release that it will officially abandon plans to fully transform the company into a for-profit entity and will instead convert its for-profit business division into a Public Benefit Corporation (PBC), which will continue to be controlled by its nonprofit organization. This decision reflects a significant strategic shift for OpenAI, which stated in its blog announcement:
OpenAI was initially established as a nonprofit organization and is still supervised and controlled by that nonprofit, a structure that will be maintained in the future.
Although a PBC is a for-profit company, it is legally required not only to be accountable to shareholders but also to prioritize its social mission. OpenAI emphasizes that the new company structure will not affect its ability to raise funds. Currently, the company's funding needs for artificial intelligence (AI) development have reached hundreds of billions of dollars, and in the future, they may even reach trillions of dollars.
CEO Sam Altman told employees:
We can continue to advance AI development without affecting fundraising while adhering to our founding mission.
Previously advocated for the for-profit transition, faced controversy
OpenAI was founded in 2015 with a clear mission as a nonprofit organization. In 2019, to expand funding for AI research and development, the company established a for-profit division, but that division has always been controlled by the nonprofit parent organization. In 2024, OpenAI claimed that transforming into a for-profit company was a 'necessary move' to raise substantial computational resources and capital to meet the demands of large AI models. However, this move sparked controversy within the industry and among co-founders.
Tesla CEO Elon Musk, one of the co-founders of OpenAI, filed a lawsuit in November of last year, accusing Sam Altman of violating the original contribution agreement to the charity and accusing him of 'manipulating' OpenAI's organizational structure in an attempt to privatize and profitize it.
Financial situation and future outlook
According to a March report by Bloomberg, OpenAI expects its revenue to reach $12.7 billion in 2025 and grow to $29.4 billion in 2026. In March of this year, the company completed a $40 billion funding round led by SoftBank, valuing the company at $300 billion.
Despite differing opinions from the public regarding OpenAI's financial strategy and future direction, Sam Altman emphasized that returning to nonprofit core values is 'the choice that best aligns with long-term interests' for the company and the global AI ecosystem.
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