OpenAI on Tuesday said it has finished converting its primary business into a for-profit public benefit corporation, capping more than a year of negotiations with state regulators. According to OpenAI, the nonprofit parent—now the OpenAI Foundation—retains control and holds equity currently valued at about $130 billion, with potential to increase as milestones are met.
Delaware Attorney General Kathy Jennings said she had no objection to the recapitalization plan following commitments that the nonprofit would continue to control the for-profit entity’s board appointments and oversight. The decision follows a parallel review by California authorities and concludes prolonged talks over governance and mission safeguards.
Microsoft, an early backer, will hold a 27% stake under the new structure, while the two companies extend their partnership on cloud and product access, according to OpenAI and contemporaneous deal reporting. The arrangement is expected to give OpenAI greater flexibility to raise capital, recruit talent, and potentially pursue a future public listing while maintaining public-interest obligations typical of a PBC.
“OpenAI has completed its recapitalization, simplifying its corporate structure,” board chair Bret Taylor said in a company blog post. OpenAI said the reorganization aims to align long-term safety research with commercial growth, amid scrutiny from regulators, investors, and the philanthropic community over how to protect the nonprofit mission.
What’s next: OpenAI signaled continued engagement with state authorities as it operates under the PBC framework; the foundation’s equity position and control provisions are designed to persist as the for-profit arm scales.
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