OpenAI is backing away from a major restructuring plan that would have shifted more power to CEO Sam Altman, opting instead to keep its nonprofit parent in control.
The decision comes after widespread criticism and mounting legal pressure, including a lawsuit from co-founder Elon Musk. Musk has accused the company of abandoning its original mission to ensure artificial intelligence is developed for the benefit of humanity.
OpenAI had proposed in December to convert its for-profit entity into a public benefit corporation (PBC), a structure that balances profit-making with broader social goals. Under that plan, the nonprofit would have become a major shareholder in the PBC but would have given up its control.
On Monday, the company said the nonprofit will remain in charge and still become a major shareholder in the PBC. OpenAI will continue with plans to restructure its for-profit business to raise more capital as it seeks to stay competitive in the rapidly evolving AI industry.
Board chairman Bret Taylor said the decision to keep the nonprofit in control came after input from civic leaders and discussions with the Attorneys General of California and Delaware. He said the new structure would remain “extremely close” to the existing model.
The announcement follows Musk’s ongoing legal fight, which aims to stop OpenAI from moving away from nonprofit governance. A jury trial is scheduled for March 2026. Musk’s attorney, Marc Toberoff, said the changes do not resolve the core issues, and there are no plans to drop the lawsuit.
“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,” Toberoff said.
