OpenAI has confirmed that it will no longer proceed with a previously considered restructuring that would have transitioned the company into a for-profit entity. Instead, the AI research group will remain under the control of its nonprofit board, following several months of internal discussions and external challenges to its proposed governance model.
The decision follows mounting pressure from legal stakeholders and former affiliates. Among them was co-founder Elon Musk, who filed a lawsuit alleging that OpenAI’s restructuring violated its original nonprofit charter. His claims were supported by concerns raised by former employees, ethics commentators, and attorneys general from California and Delaware.
Initially, OpenAI had proposed shifting its governance structure to a Public Benefit Corporation (PBC), a move intended to enable the company to secure larger capital investments while maintaining a formal commitment to its stated public mission. That proposal prompted regulatory interest and public criticism over its implications for the firm’s original goals.
In response, OpenAI’s leadership held a series of consultations with civic and legal authorities. These included meetings with the attorneys general of California and Delaware, according to the Financial Times and The Verge. OpenAI’s chief executive Sam Altman and board chair Bret Taylor led those conversations to evaluate governance alternatives that could address investment needs without compromising oversight principles.
As a result, OpenAI’s nonprofit entity will continue to retain control over strategic decisions, while becoming a significant stakeholder in the restructured for-profit operations. Although the for-profit subsidiary model will still exist to support capital generation, the primary authority will remain with the nonprofit board.
“We’re all obsessed with our mission. You’re all obsessed with Elon,” Altman stated in a staff communication, as reported by The Verge. This comment was made during a broader employee address following the public release of internal governance decisions.
The company’s revised structure still aims to accommodate a planned $40bn funding round, expected to be led by Japanese investment firm SoftBank. OpenAI intends to raise new capital while assuring regulators and stakeholders that the organisation’s strategic direction remains in alignment with its founding purpose of safe and accessible AI.
The Times reported that the outcome of these governance discussions was partly shaped by legal reviews from state attorneys general, who expressed concerns over whether the shift to a for-profit model could alter the company’s original nonprofit commitments.
OpenAI reportedly acquiring Windsurf in $3bn deal
Meanwhile, OpenAI is also preparing to expand its product portfolio through a potential acquisition. According to a report by Bloomberg News, the company has reached a deal to acquire Windsurf, an AI-assisted coding platform, in a deal valued at approximately $3bn. The transaction, which has not yet been finalised, would mark OpenAI’s largest acquisition to date.
The report stated that Windsurf, previously known as Codeium, had recently engaged in funding discussions with venture capital firms including General Catalyst and Kleiner Perkins. Those talks were based on a $3bn valuation, aligning with the terms of OpenAI’s acquisition offer. If completed, the acquisition is expected to enhance OpenAI’s existing capabilities in AI-powered software development. Windsurf’s integration would complement ChatGPT’s coding functions, potentially broadening its use cases among developers and enterprise users.
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