OpenAI has unconventional roots. Founded in 2015 as a nonprofit rather than a for-profit company, it promised to develop AI “in ways that are most likely to benefit humanity.”
However, after receiving billions of dollars in investment from Microsoft, Japanese bank SoftBank and chipmaker Nvidia, OpenAI has proposed changing its corporate structure to give investors more control over its technology.
Critics of the changes include rival-turned-Elon Musk and nonprofits concerned about OpenAI's commitment to its mission. According to reports on Wednesday, October 15, OpenAI served subpoenas on at least seven advocacy groups that opposed the restructuring. OpenAI claims it was looking to connect with Elon Musk. Affected nonprofits see a different motive: “It seems like an attempt to intimidate people,” said Judith Bell, chief outreach officer for the San Francisco Foundation, one of the advocacy groups that received the subpoena.
Here's how the battle over OpenAI's restructuring is playing out so far, and where it might be headed next.
(OpenAI did not respond to requests for comment for this article.)
December 2015: OpenAI is founded as a non-profit organization.
OpenAI, Inc. included as a nonprofit organization in Delaware, with $1 billion in initial funding from Sam Altman and Elon Musk, among others. companies stated purpose: “advance digital intelligence in a way that is most likely to benefit humanity as a whole, beyond the need for financial return.”
March 2019: OpenAI announces the creation of a commercial subsidiary.
Non-profit organization OpenAI launches OpenAI LP, a “limited profit” company controlled by a non-profit organization and with obligations to “humanity as a whole” rather than to shareholders. Investors' initial return is capped at 100 times their investment.
The newly created subsidiary's operating agreement includes warnings that “the Company may never turn a profit” and encourages potential investors to “think about investing in the spirit of giving,” Jill Horwitz, a law professor at Northwestern University, wrote in an interview with TIME.
Investors are not afraid. A few months later, Microsoft invests $1 billion in OpenAI.
November 17–20, 2023: Sam Altman briefly suspended
In the most dramatic episode in OpenAI's history, the nonprofit's board fires Sam Altman concluded that he “wasn't always forthcoming with the board of directors.”
Three days later, Microsoft hires Altman to lead a new artificial intelligence initiative. Almost all of OpenAI's remaining employees are threatening to join him.
The next day, Altman is reinstated and the board of directors is replaced, prompting questions on the non-profit organization's control over its for-profit subsidiary. Microsoft, already OpenAI's largest outside shareholder, was given a non-voting observer position on the board.
February-August 2024: Musk sues OpenAI
Elon Musk is one of the co-founders of OpenAI, who has since fallen out with Altman and founded a competitor, xAI.sues OpenAI said in February that the company had “abandoned its non-profit mission to advance AGI for the benefit of humanity.”
OpenAI releases emails claiming Musk himself is pushing for OpenAI to become profitable while still at company: OpenAI 'needs billions a year immediately' to compete with Google 'or forget it,' says e-mail from Musk in 2018.
Musk withdraws the California lawsuit in June and then files the federal lawsuit in August. “The treachery and deceit are of Shakespearean proportions,” his lawyers wrote.
December 2024: OpenAI announces restructuring plans.
OpenAI says its complex legal structure discourages investors who want a traditional stake in the company, rather than one that can disappear at the behest of a nonprofit: “Investors want to support us, but at this scale of capital, they want regular equity and less structural personality.”
OpenAI offers become a public benefit corporation (PBC), transferring nonprofit ownership of OpenAI's technology to a for-profit arm, removing profit limits for investors, and ending nonprofit oversight.
The California Attorney General is seeking information about the proposed restructuring. “Assets of OpenAI, Inc. are irrevocably intended for charitable purposes,” the CEO’s letter states. states.
April 1, 2025: OpenAI raises $20 billion subject to restructuring
SoftBank is investing $40 billion in OpenAI, half of which conditional that OpenAI will remove the profit cap and allow shareholders to own traditional shares by early 2026.
The clause could be designed to “artificially pressure” attorneys general to rush into action, wrote Tyler Johnston, executive director of the Midas Project Project, a nonprofit watchdog group.
April 9–17, 2025: Human rights groups criticize restructuring
On April 9, a coalition of nonprofits, including the San Francisco Foundation calls to California AG to protect OpenAI's charitable assets from a commercial takeover. “We're not opposed to OpenAI transforming,” Bell says. “Our interest here is purely in the context of preserving these charitable assets.”
Next comes April 17th. letter “In opposition to the proposed restructuring of OpenAI,” signatories included former OpenAI employees and Nobel laureates. The letter argues that the restructuring will undermine the AG's ability to protect public interests as OpenAI develops its technology.
May 5, 2025: OpenAI retreats
In response to criticism of OpenAI retreats: “The nonprofit will control, as well as be a major shareholder of, the PBC,” he writes, but does not provide details on how the nonprofit will control the for-profit PBC.
4 August 2025: Calls for transparency in restructuring
Nonprofit groups, former OpenAI employees and public intellectuals sign public letter asking OpenAI seven questions about the proposed restructuring, including: “Will OpenAI continue to have a legal obligation to prioritize its charitable mission over profits?” OpenAI is not responding.
August 5–October 2, 2025: OpenAI issues subpoenas to critics
According to reports this surface LaterOpenAI is serving subpoenas on at least seven advocacy groups, including Eko, the San Francisco Foundation and Encode AI, all of which signed a letter calling for transparency in OpenAI's restructuring or have previously criticized the restructuring.
“When you're running a nonprofit on a shoestring budget, the last thing you want to do is call a lawyer because you're being charged for that call,” says Emma Ruby-Sachs, chief executive of Eko.
October 10, 2025: OpenAI employees subpoena X
As details of the subpoenas emerged, two current OpenAI employees reached out to X to comment on the drama.
“It may be a risk for my entire career, but I will say: it doesn’t look great.” writes Joshua Achiam, Head of Mission Alignment at OpenAI. “We cannot do things that make us a fearsome force rather than a virtuous one.”
OpenAI Chief Strategy Officer Jason Kwon writes that “subpoenas should be expected” and that the criticism “makes it sound like it isn't.”
Future
If the SoftBank deal is correct, then OpenAI appears determined to complete the restructuring by early 2026 at the latest.
The company needs to convince California and Delaware attorneys general that the restructuring is consistent with OpenAI's charitable goals, said Brian Galle, a nonprofit law expert at the University of California, Berkeley. “I find this a difficult question because it goes against what I understand as the whole point of OpenAI as a charity, but stranger things have happened.”
Even if the CEOs allow the restructuring, Elon Musk may try to prevent it from happening. “In some cases, charity donors are allowed to sue when the charity's managers violate the rules,” Galle says.
