OpenAI, the renowned AI research organization behind ChatGPT, has decided to stay true to its roots, opting to maintain its nonprofit status and abandon a proposed shift to a for-profit model. In a noteworthy move announced on May 5, OpenAI revealed plans to transform its for-profit business segment into a Public Benefit Corporation (PBC), keeping it under the nonprofit’s control. This decision marks a significant pivot from OpenAI’s earlier consideration to fully embrace a for-profit structure.
OpenAI’s Strategic Reorientation
The shift to a PBC model underscores OpenAI’s commitment to social responsibility while still allowing it to pursue financial goals. Public Benefit Corporations are unique entities that blend profit-making with a dedication to public good, legally requiring them to prioritize societal missions alongside shareholder interests. Sam Altman, OpenAI’s CEO, reassured employees that this approach won’t hinder the organization’s ability to secure the colossal funds necessary for advancing AI technology. “Raising hundreds of billions—possibly trillions—of dollars for AI development is essential,” Altman stated in a letter to staff, emphasizing the financial intensity of AI innovation.
This decision reverses OpenAI’s stance from 2024, when the organization argued that a for-profit model was essential for procuring the vast computing resources required for AI progression. The nonprofit’s leadership, however, appears confident that the PBC structure will not compromise their fundraising capabilities. This strategic reorientation echoes broader trends in the industry, such as the integration of AI into decentralized finance, as discussed in AI Crypto Agents Are Ushering in a New Era of ‘DeFAI’.
Historical Context and the Musk Factor
OpenAI’s journey has been anything but linear. Founded as a nonprofit in 2015, it made waves in 2019 by establishing a for-profit arm, ostensibly to facilitate necessary fundraising. This for-profit entity has always remained under the nonprofit’s control, but the mere suggestion of a full conversion sparked controversy. In 2024, tensions escalated when Tesla CEO Elon Musk, a co-founder of OpenAI, filed a lawsuit against Altman. Musk accused him of manipulating the foundational principles of OpenAI to covertly steer it toward profit-making objectives.
The lawsuit added fuel to the fire, with Musk launching his own AI venture, xAI, claiming it suffered due to OpenAI’s allegedly monopolistic practices. Despite these challenges, OpenAI’s leadership remains focused on its strategic goals, projecting substantial revenue growth in the coming years. Bloomberg reported in March that OpenAI anticipates its revenue to reach $12.7 billion in 2025 and $29.4 billion by 2026, supported by significant investments like the $40 billion raised from SoftBank.
Implications for the AI and Crypto Sectors
OpenAI’s decision to remain nonprofit could have ripple effects across both the AI and cryptocurrency sectors. For cryptocurrency enthusiasts and investors, the organization’s commitment to ethical AI development aligns with the decentralized and community-driven ethos of blockchain technology. The move also raises questions about the sustainability of large-scale AI projects without traditional profit motives. This is particularly relevant as the AI-Powered Court System Is Coming to Crypto With GenLayer, highlighting the intersection of AI and blockchain in innovative ways.
While some industry watchers might question the feasibility of maintaining nonprofit status amidst fierce competition from Chinese AI firms, others see it as a bold statement of intent. “OpenAI is doubling down on its mission,” said Jane Mercado, a tech industry analyst. “This could set a precedent for balancing profit with purpose in tech.”
As OpenAI charts its course through uncharted waters, its journey will be closely watched by stakeholders across various domains. The organization’s ability to innovate and raise funds without compromising its core values will be a testament to the viability of mission-driven tech enterprises. Can OpenAI sustain its ambitious growth projections while staying true to its nonprofit roots? Only time will tell. But one thing’s for sure—this narrative is far from over.
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This article is based on: OpenAI to stay nonprofit, scrap proposed overhaul
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
