ChatGpt-Maker Openai has abandoned its plans to become a for-profit business and reaffirmed its commitment to its non-profit status.
In a blog post on May 5th, Openai confirmed its plans to convert commercial business units into so-called public benefits corporations (PBCs). PBC is a commercial enterprise that has a legal obligation to prioritize its social mission along with the interests of its shareholders.
The plan marked an inversion for Openai, which previously floated commercial transformations, including spinning nonprofits.
“Openai was founded as a nonprofit organization and today it is overseen and controlled by that nonprofit organization. From now on, it will continue to be overseen and controlled by that nonprofit organization,” ChatGpt-Maker said.
This can be done without compromising Openai’s ability to raise funds for AI development. This “we’re currently in need of hundreds of millions of dollars, and could end up with trillions of dollars,” Openai CEO Sam Altman announced the decision in a letter to employees.
In 2024, Openai took a very different view, claiming that for-profit organizations were “needed” to accumulate “a huge amount of calculations” needed to implement AI models.
Related: Openai expects triple revenue in 2025, but Chinese AI companies are intensifying
Controversial plan
Openai was originally founded as a nonprofit organization in 2015, and in 2019 it created a for-profit organization aimed at helping AI developers raise funds. The for-profit organization has since been under the control of non-profit organizations.
In 2024, Tesla CEO Elon Musk complained that one of Openai’s co-founders, Elon Musk, “allegedly violated the terms of Musk’s basic contribution to the charity,” according to a court application in November.
In the lawsuit, Musk claims that Altman “manipulated Musk to co-found Openai, a fake nonprofit venture,” but secretly plans to convert Openai into a for-profit institution.
Musk then launched Xai, the developer of AI Chatbot Grok.
Bloomberg reported in March that Open leadership expects revenues to reach $29.4 billion by 2026. It is projected to earn $12.7 billion in revenue in 2025.
In March, Openai raised $40 billion from SoftBank at a $300 billion valuation.
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