OpenAI revises restructure plan amid leadership changes

OpenAI’s latest restructuring plan reverses their controversial December 2024 proposal while attempting to balance nonprofit governance with commercial viability. The new approach would transform OpenAI into a public benefit corporation while maintaining nonprofit oversight, though details remain sparse. This restructuring represents a critical moment in AI governance as OpenAI navigates intense scrutiny from co-founders, investors, and regulators while pursuing a potential $30 billion funding round.

The big picture: OpenAI has announced a revised restructuring plan that walks back its December 2024 proposal to sell the nonprofit’s controlling shares to the for-profit side of the company.

Key details: The new plan would convert OpenAI Global LLC into a public benefit corporation (PBC) while claiming to preserve nonprofit control.

• The nonprofit would be a significant (though not necessarily majority) shareholder of the PBC and reportedly able to appoint and remove PBC directors.
• Unlike the original “capped-profit” structure, the new PBC would issue ordinary stock with no ceiling on investor returns.

Why this matters: The restructuring comes amid significant pushback from multiple stakeholders concerned about OpenAI’s original mission.

• The December 2024 proposal triggered criticism from former employees and civil society groups along with a lawsuit from co-founder Elon Musk alleging abandonment of OpenAI’s charitable mission.
• The revised plan attempts to address these concerns while still pursuing substantial commercial funding.

Financial implications: The restructuring is tied to a potential $30 billion funding round led by SoftBank.

• Microsoft, OpenAI’s largest investor, holds veto power over structural changes and is currently negotiating its ownership percentage in the new PBC.
• The transition from a capped-profit model to unlimited investor returns represents a fundamental shift in OpenAI’s business approach.

Behind the numbers: Questions remain about whether nonprofit ownership and board appointment powers would provide sufficient control over the PBC’s operations and decision-making.