OpenAI has unconventional roots. Founded in 2015 as a nonprofit, rather than a for-profit company, it promised to develop AI “in the way that is most likely to benefit humanity.”
With billions of dollars in investments from Microsoft, Japanese bank SoftBank, and chipmaker Nvidia, however, OpenAI has proposed changing its corporate structure to give investors more control over its technology.
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Critics of the change include cofounder-turned-competitor, Elon Musk, and nonprofits concerned about OpenAI’s adherence to its mission. According to reports on Wednesday, October 15, OpenAI served subpoenas to at least seven advocacy groups that opposed the restructure. While OpenAI claims it was looking for ties to Elon Musk. The affected nonprofits see a different motive: “It sure looks like it’s an attempt to intimidate folks,” says Judith Bell, chief impact officer of the San Francisco Foundation, one of the advocacy groups that received a subpoena.
Here’s how the battle for OpenAI’s restructure has unfolded so far—and where it might be headed next.
(OpenAI did not respond to a request to comment for this article.)
December 2015: OpenAI founded as a nonprofit
OpenAI, Inc., is incorporated as a nonprofit in Delaware, with an initial funding commitment of $1 billion from Sam Altman and Elon Musk, among others. The company’s stated goal: “to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.”
March 2019: OpenAI announces a for-profit subsidiary
The OpenAI nonprofit launches OpenAI LP, a “capped-profit” company, under the control of the nonprofit, with its obligation to “humanity as a whole” rather than to shareholders. Initial investors’ returns are capped at 100 times their investment.
The newly-formed subsidiary’s operating agreement includes warnings that “the Company might never turn a profit” and encourages potential investors to “think of investments in the spirit of donations,” Jill Horwitz, a professor of law at Northwestern University, writes to TIME.
Investors are undeterred. A few months later, Microsoft invests $1 billion in OpenAI.
November 17-20, 2023: Sam Altman briefly ousted
In the most dramatic episode in OpenAI’s history, the nonprofit board fires Sam Altman after concluding that he was “not consistently candid in his communications with the board.”
Three days later, Microsoft hires Altman to lead a new AI initiative. Nearly all of OpenAI’s remaining staff threaten to join him.
The following day, Altman is reinstated and the board replaced, prompting questions about the nonprofit’s control over its for-profit subsidiary. Microsoft, already OpenAI’s largest external shareholder, is given a non-voting, observer position on the board.
February-August 2024: Musk sues OpenAI
Elon Musk—one of OpenAI’s co-founders who has since fallen out with Altman and founded xAI, a competitor—sues OpenAI in February, alleging that the company has “abandoned its non-profit mission of developing AGI for the benefit of humanity.”
OpenAI shares emails that claim to show Musk himself pushing for OpenAI to go for-profit while still at the company: OpenAI “needs billions per year immediately,” to compete with Google, “or forget it,” says an email from Musk in 2018.
Musk withdraws the California suit in June, then files a federal suit in August. “The perfidy and deceit are of Shakespearean proportions,” his lawyers write.
December 2024: OpenAI announces plans to restructure
OpenAI says that its complicated legal structure is scaring away investors who want to have a traditional stake in the company, rather than one that could disappear at the nonprofit’s behest: “Investors want to back us but, at this scale of capital, need conventional equity and less structural bespokeness.”
OpenAI proposes to become a public benefit corporation (PBC), transferring the nonprofit’s ownership of OpenAI’s technology to the for-profit arm, lifting the profit caps for investors, and doing away with the nonprofit’s oversight.
The California Attorney General requests information about the proposed restructure. “OpenAI, Inc.’s assets are irrevocably dedicated to its charitable purpose,” the AG’s letter states.
April 1, 2025: OpenAI raises $20 billion conditional on restructuring
SoftBank invests $40 billion in OpenAI, half of which is conditional on OpenAI lifting its profit cap and allowing shareholders to hold traditional equity by early 2026.
The clause may be designed to “artificially put pressure” on the AGs to rush their decision, Tyler Johnston, executive director of the Midas Project, a watchdog nonprofit, writes to TIME.
April 9-17, 2025: Advocacy groups criticize the restructure
On April 9, a coalition of nonprofits including the San Francisco Foundation calls on the California AG to protect OpenAI’s charitable assets from a for-profit takeover. “We’re not opposed to the conversion of OpenAI,” says Bell. “Our interest here is strictly in the context of preserving those charitable assets.”
This is followed by an April 17 letter “in opposition to OpenAI’s proposed restructuring,” with signatories including former OpenAI employees and Nobel laureates. The letter argues that the restructure would undermine the AGs’ ability to protect the public’s interests as OpenAI develops its technology.
May 5, 2025: OpenAI backtracks
In response to criticism, OpenAI backtracks: “The nonprofit will control and also be a large shareholder of the PBC,” it writes, but doesn’t share details of how the nonprofit will control the for-profit PBC.
August 4, 2025: Calls for transparency around restructure
Nonprofit groups, former OpenAI employees, and public intellectuals sign a public letter asking OpenAI seven questions about the proposed restructure, including “Will OpenAI continue to have a legal duty to prioritize its charitable mission over profits?” OpenAI doesn’t respond.
August 5-October 2, 2025: OpenAI serves subpoenas to critics
According to reports that surface later, OpenAI serves subpoenas to at least seven advocacy groups, including Eko, the San Francisco Foundation, and Encode AI, all of which were signatories on the letter calling for transparency around OpenAI’s restructure, or had previously criticized the restructure.
“When you’re running a nonprofit on a very lean budget, the last call you want to make is to a lawyer, because you’re being charged to make that call,” says Emma Ruby-Sachs, executive director of Eko.
October 10, 2025: OpenAI employees address subpoenas on X
As details of OpenAI’s subpoenas emerge, two current OpenAI employees take to X to comment on the drama.
“At what is possibly a risk to my whole career I will say: this doesn’t seem great,” writes Joshua Achiam, OpenAI’s head of mission alignment. “We can’t be doing things that make us into a frightening power instead of a virtuous one.”
OpenAI chief strategy officer Jason Kwon writes that “subpoenas are to be expected,” and that the criticism “makes this sound like something it wasn’t.”
The future
If the SoftBank deal is anything to go by, OpenAI appears determined for the restructure to go through by early 2026 at the latest.
The company needs to convince the California and Delaware attorneys general that the restructure is consistent with the charitable purposes of OpenAI, says Brian Galle, an expert in nonprofit law at UC Berkeley. “That seems like a tough ask to me, because it’s contrary to what I understand to be the whole point of OpenAI existing as a charity—but stranger things have happened.”
Even if the AGs permit the restructure, Elon Musk could try to stop it from going through. “There are some circumstances where donors to a charity are allowed to sue when the charity’s managers are breaking the rules,” says Galle.