OpenAI has officially scrapped its plans to become a traditional for-profit company, announcing instead that it will transition to a Public Benefit Corporation (PBC) model.
The move comes after extensive consultations with civic leaders and legal authorities in California and Delaware, and amid growing scrutiny from public figures and competitors in the tech industry.
The company’s current for-profit limited liability company (LLC), established in 2019 to draw investment, will now be restructured into a PBC - a legal model designed to pursue both profit and social good. Meanwhile, the non-profit entity that originally founded OpenAI will continue to act as the company's primary governing body and largest shareholder.
In a blog post outlining the transition, OpenAI Chairman Bret Taylor and CEO Sam Altman reaffirmed the company's commitment to its founding mission of ensuring AI benefits all of humanity. Altman noted that demand for OpenAI’s technology currently exceeds capacity, with usage limits still in place to manage strain on systems.
“This shift isn’t a sale,” Altman clarified in a letter to stakeholders, “but a structural change that allows us to better raise the resources needed to achieve our goals, including the pursuit of artificial general intelligence.”
One of the most significant changes under the new framework is the removal of OpenAI’s previous “capped-profit” model. Under the old system, investor returns were limited to 100 times their original investment, after which any additional profits were redirected to the non-profit. Now, investors in the PBC will hold standard equity that can appreciate alongside company growth.
This hybrid model mirrors recent structures adopted by other AI companies like Anthropic and xAI, which aim to balance commercial viability with ethical responsibilities.
The size of the non-profit’s stake in the new PBC will be determined by independent financial advisors, and any proceeds it receives will be reinvested in programs that serve broad public interests in line with OpenAI’s mission.