May 5 (UPI) -- OpenAI said Monday its nonprofit wing will retain control over for-profit operations after initial plans to convert the company to a for-profit organization sparked pushback.
"OpenAI was founded as a nonprofit, and is today overseen and controlled by that nonprofit," OpenAI Board Chairman Bret Taylor wrote in a company blog post, discussing the outside pressure for the company to stay not-for-profit.
"Going forward, it will continue to be overseen and controlled by that nonprofit," he added.
OpenAI's business side since 2019 has been under "capped-profit" control and the company, backed by Microsoft and founded in 2015 as a nonprofit, was valued recently to the tune of $300 billion in funding by SoftBank.
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Company officials say a decision was made after going over the issue with California Attorney General Rob Bonta and Delaware's AG Kathy Jennings.
"With the structure we're contemplating, the not-for-profit will remain in control of OpenAI," Taylor told reporters in a video call.
Taylor says OpenAI will be converting its status as a limited liability company, which is a subsidiary of the nonprofit entity, to a public benefit corporation. It followed backlash by civic and AI leaders in OpenAI's quest to seek greater profits.
"By doing so, it will change the equity structure of that company so that employees, investors and the not-for-profit can own equity in that PBC," he added.
He said outside financial advisers were consulted on its recapitalization.
Taylor said the nonprofit will have a majority stake in the company but did not specify.
OpenAI CEO Sam Altman said on a call that the board and shareholders agreed and that he was "very happy that the nonprofit and the PBC will have the same mission."
Altman touched on OpenAI's ongoing legal battle with Elon Musk, who co-founded the nonprofit research lab group in 2015, in Musk's bid to stop OpenAI from converting to a for-profit that would be in direct competition with his own AI startup.
He said that, while others are "obsessed" with Musk, U.S. President Donald Trump's DOGE adviser, "we are obsessed with our mission and what it takes to fulfill that."
In March, a California judge denied a motion by Musk to stop OpenAI's artificial intelligence research group from becoming a for-profit company but permitted it to go to a spring 2026 jury trial.
"But we are here to think about our mission and figure out how to enable that," said Altman. "And that mission has not changed."
On Monday, Altman wrote that OpenAI's nonprofit will become a "big" shareholder in its new PBC "in an amount supported by independent financial advisors."
He added the company will move to a "normal capital structure" in which "everyone has stock" and that officials are eager to unveil details with Microsoft and the newly-appointed "nonprofit commissioners."
