OpenAI has revealed more detailed plans to transform its corporate structure in 2025, converting from its current hybrid nonprofit/for-profit model into a Delaware Public Benefit Corporation (PBC). According to a company announcement, the restructuring aims to enable OpenAI to raise the substantial capital needed to continue its artificial intelligence development while maintaining its mission to benefit humanity. The existing nonprofit will receive shares in the new PBC at a valuation determined by independent financial advisors.
The company, currently valued at $157 billion, states it requires more funding than initially anticipated, with recent reports indicating expected losses of $5 billion on $3.7 billion in revenue this year. The restructuring faces opposition from co-founder Elon Musk, who has filed a lawsuit challenging the conversion from nonprofit to for-profit status, claiming it violates the company’s founding principles. OpenAI has denied these claims.
The planned restructuring follows internal turbulence, including the brief dismissal and reinstatement of CEO Sam Altman in late 2023, which concerned major investors like Microsoft. The company has also experienced several high-profile departures, with some former employees expressing concerns about prioritizing commercial interests over safety considerations. Under the new structure, the PBC will manage commercial operations while the nonprofit arm will focus on charitable initiatives in healthcare, education, and science.
Sources: CNBC, The New York Times