San Francisco. OpenAI said Monday its nonprofit board will continue to control the maker of ChatGPT, reversing plans to shift toward a more traditional for-profit structure.

After months of internal deliberation and mounting public scrutiny, OpenAI CEO Sam Altman said in a letter to employees that the decision came after feedback from civic leaders and discussions with the Attorneys General of California and Delaware.

“We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware,” Altman wrote.

Altman and Bret Taylor, chair of OpenAI’s nonprofit board, said the company is now proposing a “recapitalization” plan that preserves nonprofit oversight while converting the existing for-profit arm into a public benefit corporation, a legal structure that balances shareholder interests with a public mission.

As part of the restructuring, shareholders will receive equity, and profit caps for some investors will be lifted. Taylor said the nonprofit will appoint the board of the new public benefit corporation, and initially, it will likely mirror the nonprofit’s current board.

Public benefit corporations, first established in Delaware in 2013, are required to pursue both profit and a defined social good. Examples include Amalgamated Bank and Coursera, and more recently, AI companies like Anthropic and Elon Musk’s xAI.

Altman said the change would give OpenAI a more recognizable business structure, helping it pursue strategic investments, mergers, and acquisitions. “There’s so much more demand to use AI tools than we thought,” he said. “This just sets us up to be a more understandable structure to do the things that a company of our scope has to do.”

OpenAI, founded as a nonprofit in 2015 by Altman, Musk, and others to safely develop artificial general intelligence (AGI), has since grown into a $300 billion business, with ChatGPT boasting 400 million weekly users. The company has received major backing from Microsoft, its largest investor, though Microsoft declined to comment on Monday.

OpenAI's original plan to overhaul its governance structure drew legal and ethical concerns. A lawsuit filed by Musk alleged that Altman and the board betrayed the nonprofit’s founding mission. A federal judge recently dismissed parts of Musk’s complaint but allowed others to proceed to trial next year.

In addition, the attorneys general of California and Delaware reviewed the proposed restructuring, with California’s office confirming an ongoing investigation. Advocates, including former employees and other charities, had petitioned both states’ top prosecutors to block the governance change, citing concerns over the erosion of OpenAI’s charitable mission.

Among those critics is Geoffrey Hinton, a pioneering AI scientist and Nobel laureate, who warned of the dangers if AI development outpaces public accountability.

Altman said the company still expects a major investment from Japan’s SoftBank, which announced plans earlier this year to establish a joint venture with OpenAI. However, he stressed that full privatization isn’t the goal. “We don’t want to be a fully normal company,” he said. “We believe this is well over the bar of what we need to be able to fundraise.”

Page Hedley, a former OpenAI policy adviser who led a petition to stop the for-profit conversion, said he was cautiously optimistic. “The charitable mission is about ensuring this technology benefits the public, not shareholders,” he said.

Fred Blackwell, CEO of the San Francisco Foundation, renewed calls for California’s attorney general to investigate whether OpenAI’s revised structure would truly serve the public good. “If OpenAI is truly committed to benefiting humanity,” he said, “it should transfer its charitable assets to an independent public trust.”

Nonprofit law expert Rose Chan Loui added that maintaining control would require either a majority shareholding or special voting rights—terms that could prove unpalatable to potential investors.

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