OpenAI Walks Back Business Restructuring Plans

OpenAI has scrapped its controversial plan to restructure into a conventional corporate entity, opting instead to remain under nonprofit control, Fortune Tech reported.

Rather than convert into a standard corporate form, OpenAI said it will reorganize its for-profit unit as a public benefit corporation.

The abrupt reversal follows growing pressure from critics—including cofounder Elon Musk, who sued to stop the change—arguing the move betrayed OpenAI’s founding mission to benefit humanity.

The decision also reflects internal tensions that have roiled the organization, including the high-profile firing and rehiring of CEO Sam Altman last year.

Rather than convert into a standard corporate form, OpenAI said it will reorganize its for-profit unit as a public benefit corporation.

This status allows it to pursue profits while still prioritizing public good. “I think it just sets us up to be a more understandable structure,” Altman said at a press conference, according to The Wall Street Journal.