OpenAI's New Structure: Impact on Future & IPO?

Cansın Cengiz

06 May 2025 — 3 min read

Navigating Change: OpenAI's New Corporate Structure and Its Future

OpenAI, a leading name in artificial intelligence, recently announced a significant shift in its restructuring plans. This move comes after discussions with attorneys general in Delaware and California and aims to address concerns about its unique corporate framework.

The Shift: From Non-Profit Oversight to a PBC Model

Previously, OpenAI operated with a non-profit board directly governing its for-profit activities. The new strategy involves transitioning its for-profit arm into a Public Benefit Corporation (PBC). However, this new PBC will remain under the control of OpenAI's existing non-profit entity. This change reverses an earlier course that might have seen the for-profit arm gain more independence.

The goal of this restructuring appears to be to satisfy regulators and the company's significant investors, who have poured billions into OpenAI expecting future returns. While a PBC structure allows for profit generation, it also legally requires the company to consider public benefit in its decision-making, aligning with OpenAI's mission to ensure artificial general intelligence (AGI) benefits all of humanity.

The IPO Question: A More Complex Path?

A simpler corporate structure could theoretically pave the way for an Initial Public Offering (IPO), especially given OpenAI's massive operational scale and the substantial capital it requires. While OpenAI states it has no current plans to go public, an IPO is "theoretically" possible under the new PBC model, according to company spokesperson Steve Sharpe, as reported by TechCrunch.

However, experts highlight potential challenges. Stephen Diamond, a corporate governance professor at Santa Clara University, told TechCrunch, “My sense is there’s enormous intellectual property value at the OpenAI nonprofit level. But if the PBC doesn’t own and control the core IP, but are just licensed to use it, then what’s the IPO? That’s the challenge.”

Rose Chan Loui from UCLA’s Law Program on Philanthropy and Nonprofits added that if the non-profit retains control over critical technology, shareholder influence in the PBC would be limited. "I think an IPO is much harder in this scenario," Loui stated in an interview with TechCrunch.

Pressure Points: Investors, Regulators, and Legal Battles

OpenAI's restructuring journey has been marked by pressure from multiple directions:

Regulatory Scrutiny: Attorneys general in Delaware and California are reviewing the new plan. This comes after a group of former OpenAI employees urged them to block any conversion they felt was at odds with OpenAI's charitable mission.
Investor Expectations: Major investors like Microsoft and Softbank, whose multi-billion-dollar commitments reportedly depend on a successful restructuring, need to be satisfied. As of early May 2025, Microsoft had not yet given its full approval, seeking assurances for its investment. OpenAI's high valuation has also been linked to changes in its corporate structure.
Elon Musk's Influence: Co-founder Elon Musk, now a competitor via xAI, has actively challenged OpenAI. He submitted a $97 billion takeover bid for its non-profit assets and filed a lawsuit alleging OpenAI abandoned its original mission. A recent court decision denied several of OpenAI's motions to dismiss claims in Musk's suit. While OpenAI CEO Sam Altman reportedly denied the lawsuit influenced the new plan, Musk's legal counsel stated the restructuring "changes nothing" for their case, according to TechCrunch.

What's Next for OpenAI?

OpenAI's new plan aims to provide a more conventional capital structure, allowing employees, investors, and the non-profit to hold equity directly. However, with ongoing legal challenges, regulatory oversight, and the need to secure full investor confidence, the path ahead for OpenAI remains complex. This restructuring is a critical step, but its ultimate success and implications for the future of AI development under OpenAI's stewardship are still unfolding.