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OpenAI Abandons For-Profit Transition, Prioritizes Nonprofit Mission

Coin WorldMonday, May 5, 2025 5:42 pm ET

1min read

OpenAI, the creator of ChatGPT, has decided to maintain its nonprofit status and has abandoned plans to transition into a for-profit entity. This decision was announced in a May 5 blog post, where the company confirmed its commitment to its original nonprofit mission. The plans to convert its for-profit business unit into a Public Benefit Corporation (PBC) have been scrapped. pbcs are for-profit companies that are legally required to prioritize a social mission alongside the interests of shareholders.

This reversal marks a significant shift for OpenAI, which had previously considered converting to a for-profit structure. The company had floated the idea of spinning out the nonprofit entity to facilitate fundraising for AI development. However, OpenAI has now reaffirmed its commitment to being overseen and controlled by its nonprofit entity.

According to OpenAI’s CEO, Sam Altman, this decision does not compromise the company’s ability to raise funds for AI development. Altman noted in a letter to employees that AI development currently requires hundreds of billions of dollars and may eventually require trillions of dollars. This funding is crucial for running AI models, which demand vast quantities of computational resources.

OpenAI was originally founded as a nonprofit in 2015. In 2019, it created a for-profit entity to help AI developers raise funds, which has remained under the nonprofit’s control. However, in 2024, the company took a different stance, asserting that the for-profit entity was necessary for raising capital to amass the computational power needed to run AI models.

The decision to maintain its nonprofit status comes amidst controversy. tesla CEO Elon Musk, one of OpenAI’s cofounders, sued Altman in November, alleging that Altman had manipulated him into co-founding OpenAI while secretly planning to convert it to a for-profit entity. Musk has since launched xAI, the developer of AI chatbot Grok, which he claims has been affected by OpenAI’s allegedly anti-competitive practices.

OpenAI’s leadership had previously forecasted significant revenue growth, with expectations to hit $29.4 billion by 2026 and $12.7 billion in 2025. In March, the company raised $40 billion from Softbank at a $300 billion valuation. Despite these financial projections, OpenAI has chosen to prioritize its nonprofit mission, ensuring that its AI development efforts remain aligned with its original social and ethical goals.

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