OpenAI abandons plan to convert to full for-profit control, nonprofit to keep control

OpenAI’s board announced that its nonprofit parent would continue to oversee and control the company, reversing a plan set out in December 2024 under which the nonprofit’s stake in a restructured for-profit arm would have been diluted to an ordinary, non-controlling shareholding. The for-profit subsidiary will still convert into a Delaware public benefit corporation, but the nonprofit will hold a controlling interest in it rather than merely a stake compensated in cash and equity.

The company said the change followed “constructive dialogue” with the offices of the attorneys general of California and Delaware, both of which have oversight of OpenAI’s nonprofit status and had raised concerns about the earlier plan diverting charitable assets to private shareholders. Board chair Bret Taylor said OpenAI would remain “overseen and controlled” by the nonprofit that founded it in 2015.

The reversal came after more than a year of pressure. Elon Musk, an early OpenAI donor and co-founder who left the organisation in 2018, sued in February 2024 arguing the for-profit pivot betrayed its founding charitable mission; a judge denied his bid for a preliminary injunction in March 2025 but let the underlying case proceed toward trial. Separately, a coalition of Nobel laureates, law professors, nonprofit groups including Encode, and former OpenAI employees had petitioned the two state attorneys general to block the conversion, arguing that assets built with nonprofit funding and mission commitments should not simply transfer to a conventional for-profit company.

The nonprofit’s control was not the end of the restructuring: in September 2025 OpenAI said the nonprofit’s equity stake in the new public benefit corporation would be worth more than $100 billion, and the conversion was completed the following month.