Newscasts - OpenAI says nonprofit to retain control, as it dials back restructuring

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06/05/2025 09:58

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Source: 'Reuters - Business videos'

Description: OpenAI has dialed back a significant restructuring plan, with its nonprofit parent retaining control in a move that is likely to limit CEO Sam Altman's power over the pioneering maker of ChatGPT. Ryan Chang has more.

Short Link: https://refini.tv/4m7ooy8

Video Transcript:

OpenAI has dialed back its plan to turn into a for-profit company, announcing its non-profit parent will stay in control, according to its CEO Sam Altman Monday. It's the latest after years of legal challenges and boardroom drama for the AI maker of ChatGPT that, at one point, two years ago, saw members of the non-profit board ousting Altman over a breakdown in trust. In a blog post, Altman said OpenAI will remain a non-profit, that would still control its for-profit arm. Back in December, Altman first proposed a set of restructuring plans that turns OpenAI's for-profit arm into a public-benefit corporation, a structure that gives shareholders returns while the firm still focuses on social goals. But those plans would see the non-profit parent ceding control. OpenAI said Monday that, instead, the non-profit part will keep a grip on the company while it pushes ahead with restructuring its for-profit arm to help raise more capital. Monday's announcement is a major win for OpenAI's critics. The firm's earlier plans to move to an outright for-profit drew backlash on whether it had strayed too far from its original aim to develop AI for the public good. Meanwhile, despite Monday's announcement, Elon Musk, a co-founder of OpenAI, says he'll proceed with his lawsuit against Altman and his firm. The suit seeks to block OpenAI's transition to a for-profit business. Musk earlier this year made an unsolicited $97 billion bid for OpenAI, that was rejected by Altman. OpenAI in March said it would raise up to $40 billion in a new funding round by SoftBank, which valued the startup at $300 billion. After Monday's move, Altman said OpenAI would still be able to receive funding from the Japanese tech investor.