OpenAI's Bold Move: Keeping Non-Profit Control Amid Growth Pressure

In a pivotal announcement, OpenAI, the parent entity behind the AI service ChatGPT, has set forth a revised governance structure following intense scrutiny and a significant power struggle within the organization. Sam Altman, the CEO, declared that OpenAI would maintain the control of its non-profit board while shifting to operate as a public benefit corporation (PBC). This move was necessitated by widespread criticism, notably from co-founder Elon Musk, concerning the growth trajectory potentially compromising OpenAI’s original mission of fostering technology for the betterment of humanity.

Last month, a collective of former OpenAI employees and industry leaders, including AI pioneer Geoffrey Hinton, urged regulators in California and Delaware to address concerns regarding the company’s proposed conversion to a PBC. Eventually, OpenAI’s leadership, having engaged in constructive dialogues with civic leaders and respective Attorney General offices, has opted for a governance plan that continues to empower the non-profit while adding a significant stake in OpenAI’s business arm. This structure aims to secure funding for its foundational goals while alleviating the constraints of a complex governance model that had previously capped potential profits.

Altman emphasized that the transition to a normal capital structure is not a sale but rather a simplification intended to facilitate investment — particularly from high-profile backers like Microsoft. Notably, unlike traditional corporations beholden primarily to shareholders, a public benefit corporation also commits to broader societal purposes. Altman reiterated that this new governance approach aligns growth with the company’s mission to enhance access to AI, enabling collaborative advancements that would ultimately uplift societal quality of life.

Despite these changes, the effectiveness of the new plan in addressing investor and public concerns remains uncertain. Page Hedley, former policy and ethics adviser at OpenAI, highlighted lingering questions, such as ownership of technology and the prioritization of the organization’s goals. He acknowledged OpenAI’s responsiveness but pointed out that crucial issues still need resolution. This evolving narrative illustrates the tension between profit motives and ethical considerations within the rapidly advancing field of artificial intelligence.