section_path: Controversies/Proposed shift from nonprofit control
section_name: Proposed shift from nonprofit control
paragraph_text: Proposed shift from nonprofit control
  
  OpenAI, Inc. was originally designed as a nonprofit in order to ensure that AGI "benefits all of humanity" rather than "the private gain of any person". In 2019, it created OpenAI Global, LLC, a capped-profit subsidiary controlled by the nonprofit. In December 2024, OpenAI proposed a restructuring plan to convert the capped-profit into a Delaware-based public benefit corporation (PBC), and to release it from the control of the nonprofit. The nonprofit would sell its control and other assets, getting equity in return, and would use it to fund and pursue separate charitable projects, including in science and education. OpenAI's leadership described the change as necessary to secure additional investments, and claimed that the nonprofit's founding mission to ensure AGI "benefits all of humanity" would be better fulfilled.
  
  The plan has been criticized by experts and former employees. A legal letter named " Not For Private Gain " asked the attorneys general of California and Delaware to intervene, stating that the restructuring is illegal and would remove governance safeguards from the nonprofit and the attorneys general. The letter argues that OpenAI's complex structure was deliberately designed to remain accountable to its mission, without the conflicting pressure of maximizing profits. It contends that the nonprofit is best positioned to advance its mission of ensuring AGI benefits all of humanity by continuing to control OpenAI Global, LLC, whatever the amount of equity that it could get in exchange. PBCs can choose how they balance their mission with profit-making. Controlling shareholders have a large influence on how closely a PBC sticks to its mission.
  
  Legally, under nonprofit law, assets dedicated to a charitable purpose must continue to serve that purpose. To change its purpose, OpenAI would have to prove that its current purposes have become unlawful, impossible, impracticable, or wasteful. Elon Musk, who had initiated a lawsuit against OpenAI and Altman in August 2024 alleging the company violated contract provisions by prioritizing profit over its mission, reportedly leveraged this lawsuit to stop the restructuring plan. On February 10, 2025, a consortium of investors led by Elon Musk submitted a $97.4 billion unsolicited bid to buy the nonprofit that controls OpenAI, declaring willingness to match or exceed any better offer. The offer was rejected on 14 February 2025, with OpenAI stating that it was not for sale, but the offer complicated Altman's restructuring plan by suggesting a lower bar for how much the nonprofit should be valued.
  
  In May 2025, the nonprofit's board chairman Bret Taylor announced that the nonprofit would renounce plans to cede control after outside pressure. The capped-profit still plans to transition to a PBC, which critics said would diminish the nonprofit's control.