OpenAI Completes Restructuring to For-Profit Entity With $130B Nonprofit Stake

OpenAI has completed its restructuring from a nonprofit to a hybrid model consisting of a nonprofit foundation and a for-profit company, after receiving approval from California Attorney General Rob Bonta. The new OpenAI Foundation holds about 26% of the company's valuation, giving it significant philanthropic endowment power, while Microsoft and other investors own the remainder. Despite the restructuring allowing OpenAI to attract more investment capital and paving the way for an eventual IPO, critics including Elon Musk and nonprofit advocates have raised concerns about potential misuse of charitable tax exemptions and whether the for-profit entity could dominate decision-making despite nominal nonprofit control. OpenAI's CEO Sam Altman has emphasized the company's aggressive plans to invest heavily in AI infrastructure, with projections to reach $29.4 billion in revenue by 2026 and profitability by 2029, although the company currently operates at a significant cash burn. The restructuring was marked by intense negotiations and regulatory scrutiny, reflecting broader tensions around AI industry consolidation and governance. Overall, OpenAI's transition reflects both strategic maneuvering to scale AI development and ongoing debates about the balance between profit motives and public benefit in AI advancement.