In a significant shift, OpenAI has decided to abandon its plans to convert into a for-profit entity, opting instead to maintain its nonprofit governance structure. This decision follows strong opposition from co-founder Elon Musk, who had filed a lawsuit alleging that the company’s move towards profit undermined its founding mission to develop artificial general intelligence (AGI) for the benefit of humanity.

 OpenAI’s Structural Change

OpenAI announced on May 6, 2025, that it would not proceed with plans to become a for-profit organization. Instead, the company will retain control under its nonprofit board, transitioning its for-profit arm into a public benefit corporation (PBC). This restructuring ensures that while the PBC will have shareholders, it will still prioritize broader mission goals and remain under the control of OpenAI’s nonprofit board.

 Legal Battle with Elon Musk

Elon Musk had previously filed a lawsuit accusing OpenAI and its CEO, Sam Altman, of betraying its foundational mission by putting the pursuit of profit ahead of the benefit of humanity. The lawsuit claimed that OpenAI had transformed into a closed-source, de facto subsidiary of Microsoft, focusing on developing AGI for profit rather than for the benefit of humankind.

In response, OpenAI denied the allegations, stating that Musk had supported the idea of making the company a for-profit entity and had even suggested merging OpenAI with Tesla.

 Court’s Response

A federal judge had previously denied Musk’s request to block OpenAI’s conversion to a for-profit company but indicated willingness to expedite a trial to consider Musk’s claims against the company.

 Implications of the Decision

OpenAI’s decision to maintain its nonprofit structure may have significant implications for its relationships with major investors like Microsoft and SoftBank. While Microsoft has invested $13 billion in OpenAI since 2019, the company’s new structure might allow investors to hold actual stock, moving away from the previous capped-profit model.

This development also impacts ongoing legal disputes with Musk, who alleged that OpenAI had strayed from its nonprofit mission. While Musk has indicated he will continue his lawsuit, calling the changes cosmetic, the company’s shift may influence the legal proceedings.

In conclusion, OpenAI’s reversal of its for-profit plans represents a significant victory for Elon Musk and others who advocated for the company’s adherence to its original mission of ensuring AGI benefits all of humanity.