OpenAI has scaled back a major restructuring initiative, keeping its nonprofit parent in control—a move that will likely limit CEO Sam Altman’s authority over the company behind ChatGPT.
The reversal comes in response to mounting criticism and legal pressure, including a high-profile lawsuit from co-founder and rival Elon Musk, who alleges the organization has deviated from its original mission to develop artificial intelligence for the public good.
“OpenAI was founded as a non-profit, is today a non-profit that oversees and controls the for-profit, and going forward will remain a non-profit that oversees and controls the for-profit. That will not change,” Altman said in a blog post on Monday.
Back in December, OpenAI proposed turning its for-profit arm into a public benefit corporation (PBC), designed to strike a balance between social goals and investor returns. The new structure would have made the nonprofit a significant shareholder while handing off control of the company.
However, Monday’s announcement clarified that the nonprofit will retain control over the PBC while still becoming a major shareholder. The change allows the for-profit division to raise more capital without relinquishing oversight.
The decision follows conversations with civic leaders and discussions with attorneys general from California and Delaware, according to OpenAI board chair Bret Taylor.
“We made the decision 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,” Taylor said in a blog post. He added that the updated plan keeps OpenAI’s governance “extremely close” to its current model.
Altman characterized the move as a workable middle ground:
“That (works) well enough for investors that they’re happy to continue to fund us to a degree we think we will need.”
He said OpenAI will collaborate with Microsoft, regulators, and newly appointed nonprofit commissioners to finalize the changes, including determining equity distribution in the for-profit entity.
“We believe this is well over the bar of what we need to be able to fundraise,” Altman added, noting there would be “no changes to any existing investor relationships” and confirming plans to lift profit caps for investors remain unchanged.
Still, the announcement left some uncertainties unresolved. While OpenAI’s nonprofit currently owns the for-profit arm outright and is tasked with ensuring artificial general intelligence (AGI) benefits humanity, the revised structure lacks full transparency.
“We’re glad that OpenAI is listening to concerns from civil society leaders … but crucial questions remain,” said Page Hedley, OpenAI’s former policy and ethics adviser and lead organizer of the watchdog group Not For Private Gain.
“Will OpenAI’s commercial goals continue to be legally subordinate to its charitable mission? Who will own the technology that OpenAI develops? The 2019 restructuring announcement made the primacy of the mission very clear, but so far, these statements have not.”
Hedley also voiced concern that in a PBC structure, board members may be legally obligated to prioritize shareholder returns.
Musk Lawsuit Continues
Meanwhile, OpenAI is still facing a legal challenge from Elon Musk. The lawsuit aims to prevent the company’s move away from nonprofit control and raises questions over transparency and ownership. A jury trial is scheduled for March 2026.
“The announcement obscures critical details about the supposed ‘non-profit control’ arrangement, and particularly the sharply reduced ownership stake the non-profit will receive in Altman’s for-profit enterprise—where the non-profit currently holds majority equity,” said Musk’s attorney Marc Toberoff.
Earlier this year, a Musk-led group submitted an unsolicited $97.4 billion bid for OpenAI, which Altman dismissed with a curt “no thank you.”
“Elon continuing with his baseless lawsuit only proves that it was always a bad-faith attempt to slow us down,” an OpenAI spokesperson said.
Despite the ongoing legal drama, Altman confirmed that the company remains eligible for funding from SoftBank Group, which in March expressed interest in leading a $40 billion investment round—conditional on OpenAI becoming a for-profit entity by year’s end.
SoftBank has not yet commented, while Microsoft declined to make a statement.
