Openai Will Continue To Be Controlled By Nonprofit Amid Restructuring Scrutiny

OpenAI announced Monday it has updated its restructuring plan to allow its nonprofit to retain control of the for-profit arm of the unorthodox technology organization, amid escalating scrutiny and a legal challenge by former business partner Elon Musk.

“We’re very grateful to all the people that have constructively engaged with us, talking about different ways we could do this, and I’m very happy that we’ve made the decision for the nonprofit to stay in control,” CEO Sam Altman said at a virtual press briefing.

OpenAI, which developed the artificial intelligence chatbot ChatGPT and claims its mission is “to ensure that artificial general intelligence benefits all of humanity,” has been facing scrutiny on multiple fronts regarding its prior restructuring plan to make its current nonprofit parent company a shareholder in a new for-profit enterprise. Musk, an initial co-founder who ultimately left and formed his own rival firm xAI, has challenged OpenAI’s plan in court, arguing it deviates from the original mission to provide a public good, which OpenAI disputes.

OpenAI and Altman in turn countersued Musk, accusing him of intentionally trying to hamstring the company as he builds his own competitor, xAI.

Top California officials also faced pressure to intervene because the company is based in San Francisco, though it is incorporated in Delaware.

OpenAI said its board made the decision after hearing from civic leaders and engaging with the attorneys general of both California and Delaware.

“In some sense, this is maybe less eventful than people were expecting, given all of the speculation about this over the last year and a half," Altman said, “but I think it’s a great decision by the board and sort of all the stakeholders we were able to get to weigh in on it.”