Plans for major structural change announced by OpenAI

OpenAI has unveiled plans to transition its for-profit arm into a Delaware-based public benefit corporation (PBC). The move aims to attract substantial investment as the competition to develop advanced AI intensifies, and the proposed structure intends to prioritise societal interests alongside shareholder value, setting the company apart from traditional corporate models.

The shift marks a significant step for OpenAI, which started as a nonprofit in 2015 before establishing a for-profit division to fund high-cost AI development. Its latest funding round, valued at $157 billion, necessitated the structural change to eliminate a profit cap for investors, enabling greater financial backing. The nonprofit will retain a substantial stake in the restructured company, ensuring alignment with its original mission.

OpenAI faces criticism and legal challenges over the move. Elon Musk, a co-founder and vocal critic, has filed a lawsuit claiming the changes prioritise profit over public interest. Meta Platforms has also urged regulatory intervention. Legal experts suggest the PBC status offers limited enforcement of its mission-focused commitments, relying on shareholder influence to maintain the balance between profit and purpose.

By adopting this structure, OpenAI aims to align with competitors like Anthropic and xAI, which have similarly raised billions in funding. Analysts view the move as essential for securing the resources needed to remain a leader in the AI sector, though significant hurdles remain.