OpenAI Ditches For-Profit Ambitions After Elon Musk Rips Sam Altman Over Plan

OpenAI, the parent company of ChatGPT, has ditched its push to become a for-profit company — a plan that had pitted CEO Sam Altman against Elon Musk, who has criticized and even sued OpenAI over the attempted move.

On Monday, OpenAI announced its nonprofit board will oversee a public benefit corporation that “has to consider the interests of both shareholders and the mission,” according to a blog post from the company. Altman, in a memo to employees, said the decision was made after hearing from “civic leaders and engaging in constructive dialogue” with the attorney general of Delaware and the attorney general of California.

“We believe this sets us up to continue to make rapid, safe progress and to put great AI in the hands of everyone,” Altman said. “Creating [artificial general intelligence] is our brick in the path of human progress; we can’t wait to see what bricks you will add next.”

The decision comes after Musk heavily criticized Altman and OpenAI for the push to becoming a for-profit company. Musk co-founded OpenAI in 2015 alongside Altman and a handful of other executives, before stepping down from its board in 2018.

Musk joked OpenAI should change its name to “ClosedAI” in March 2024 due to its move away from its initial mission: providing open source AI technology that benefits everyone. And last September, the X owner shared his displeasure with OpenAI’s planned business restructuring.

“You can’t just convert a non-profit into a for-profit,” Musk posted. “That is illegal.”

More importantly, Musk has sued OpenAI over the plan to become a for-profit business, and on Monday, his attorney said that lawsuit is still moving forward.

“Nothing in today’s announcement changes the fact that OpenAI will still be developing closed-source AI for the benefit of Altman, his investors and Microsoft,” lawyer Marc Toberoff told Reuters. “The announcement obscures critical details about the supposed ‘non-profit control’ arrangement, and particularly the sharply reduced ownership stake the non-profit will receive in Altman’s for-profit enterprise.”

The Tesla and SpaceX boss also led a $97.4 billion bid for OpenAI if Altman agreed to ditch his plan to convert the company into a for-profit business earlier this year — a bid that was ultimately denied by OpenAI’s board.

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