OpenAI
OpenAI is an American artificial intelligence research organization comprising both a non-profit foundation and a controlled for-profit public benefit corporation, headquartered in San Francisco, California. It aims to develop "safe and beneficial" artificial general intelligence, which it defines as "highly autonomous systems that outperform humans at most economically valuable work". OpenAI is widely recognized for its development of the GPT family of large language models, the DALL-E series of text-to-image models, and a text-to-video model named Sora, which have influenced industry research and commercial applications. Its release of ChatGPT in November 2022 has been credited with catalyzing widespread interest in generative AI.
The organization was founded in 2015 in Delaware but evolved a complex corporate structure. As of October 2025, following restructuring approved by California and Delaware regulators, the non-profit OpenAI Foundation holds 26% of the for-profit OpenAI Group PBC, with Microsoft holding 27% and employees/other investors holding 47%. Under its governance arrangements, the OpenAI Foundation holds the authority to appoint the board of the for-profit OpenAI Group PBC, a mechanism designed to align the entity’s strategic direction with the Foundation’s charter. Microsoft previously invested over $13 billion into OpenAI, and provides Azure cloud computing resources. In October 2025, OpenAI conducted a $6.6 billion share sale that valued the company at $500 billion.
In 2023 and 2024, OpenAI faced multiple lawsuits for alleged copyright infringement against authors and media companies whose work was used to train some of OpenAI's products. In November 2023, OpenAI's board removed Sam Altman as CEO, citing a lack of confidence in him, but reinstated him five days later following a reconstruction of the board. Throughout 2024, roughly half of then-employed AI safety researchers left OpenAI, citing the company's prominent role in an industry-wide problem.
Founding
In December 2015, OpenAI was founded as a not for profit organization by Sam Altman, Elon Musk, Ilya Sutskever, Greg Brockman, Trevor Blackwell, Vicki Cheung, Andrej Karpathy, Durk Kingma, John Schulman, Pamela Vagata, and Wojciech Zaremba, with Sam Altman and Elon Musk as the co-chairs. A total of $1 billion in capital was pledged by Sam Altman, Greg Brockman, Elon Musk, Reid Hoffman, Jessica Livingston, Peter Thiel, Amazon Web Services, and Infosys. However, the actual capital collected significantly lagged pledges. According to company disclosures, only $130 million had been received by 2019.In its founding charter, OpenAI stated an intention to collaborate openly with other institutions by making certain patents and research publicly available, but later restricted access to its most capable models, citing competitive and safety concerns. OpenAI was initially run from Brockman's living room. It was later headquartered at the Pioneer Building in the Mission District, San Francisco.
According to OpenAI's charter, its founding mission is "to ensure that artificial general intelligence —by which we mean highly autonomous systems that outperform humans at most economically valuable work—benefits all of humanity."
Musk and Altman stated in 2015 that they were partly motivated by concerns about AI safety and existential risk from artificial general intelligence. OpenAI stated that "it's hard to fathom how much human-level AI could benefit society", and that it is equally difficult to comprehend "how much it could damage society if built or used incorrectly". The startup also wrote that AI "should be an extension of individual human wills and, in the spirit of liberty, as broadly and evenly distributed as possible", and that "because of AI's surprising history, it's hard to predict when human-level AI might come within reach. When it does, it'll be important to have a leading research institution which can prioritize a good outcome for all over its own self-interest." Co-chair Sam Altman expected a decades-long project that eventually surpasses human intelligence.
Brockman met with Yoshua Bengio, one of the "founding fathers" of deep learning, and drew up a list of great AI researchers. Brockman was able to hire nine of them as the first employees in December 2015. OpenAI did not pay AI researchers salaries comparable to those of Facebook or Google. It also did not pay stock options which AI researchers typically get. Nevertheless, OpenAI spent $7 million on its first 52 employees in 2016. OpenAI's potential and mission drew these researchers to the firm; a Google employee said he was willing to leave Google for OpenAI "partly because of the very strong group of people and, to a very large extent, because of its mission." OpenAI co-founder Wojciech Zaremba stated that he turned down "borderline crazy" offers of two to three times his market value to join OpenAI instead.
In April 2016, OpenAI released a public beta of "OpenAI Gym", its platform for reinforcement learning research. Nvidia gifted its first DGX-1 supercomputer to OpenAI in August 2016 to help it train larger and more complex AI models with the capability of reducing processing time from six days to two hours. In December 2016, OpenAI released "Universe", a software platform for measuring and training an AI's general intelligence across the world's supply of games, websites, and other applications.
Corporate structure
Transition from non-profit
In 2019, OpenAI transitioned from non-profit to "capped" for-profit, with the profit being capped at 100 times any investment. According to OpenAI, the capped-profit model allows OpenAI Global, LLC to legally attract investment from venture funds and, in addition, to grant employees stakes in the company. Many top researchers work for Google Brain, DeepMind, or Facebook, which offer equity that a nonprofit would be unable to match. Before the transition, OpenAI was legally required to publicly disclose the compensation of its top employees.The company then distributed equity to its employees and partnered with Microsoft, announcing an investment package of $1 billion into the company. Since then, OpenAI systems have run on an Azure-based supercomputing platform from Microsoft.
OpenAI Global, LLC then announced its intention to commercially license its technologies. It planned to spend $1 billion "within five years, and possibly much faster". Altman stated that even a billion dollars may turn out to be insufficient, and that the lab may ultimately need "more capital than any non-profit has ever raised" to achieve artificial general intelligence.
The nonprofit, OpenAI, Inc., is the sole controlling shareholder of OpenAI Global, LLC, which, despite being a for-profit company, retains a formal fiduciary responsibility to OpenAI, Inc.'s nonprofit charter. A majority of OpenAI, Inc.'s board is barred from having financial stakes in OpenAI Global, LLC. In addition, minority members with a stake in OpenAI Global, LLC are barred from certain votes due to conflict of interest. Some researchers have argued that OpenAI Global, LLC's switch to for-profit status is inconsistent with OpenAI's claims to be "democratizing" AI.
On February 29, 2024, Elon Musk filed a lawsuit against OpenAI and CEO Sam Altman, accusing them of shifting focus from public benefit to profit maximization—a case OpenAI dismissed as "incoherent" and "frivolous," though Musk later revived legal action against Altman and others in August.
On April 9, 2024, OpenAI countersued Musk in federal court, alleging that he had engaged in "bad-faith tactics" to slow the company's progress and seize its innovations for his personal benefit. OpenAI also argued that Musk had previously supported the creation of a for-profit structure and had expressed interest in controlling OpenAI himself. The countersuit seeks damages and legal measures to prevent further alleged interference.
On February 10, 2025, a consortium of investors led by Elon Musk submitted a $97.4 billion unsolicited bid to buy the nonprofit that controls OpenAI, declaring willingness to match or exceed any better offer. The offer was rejected on 14 February 2025, with OpenAI stating that it was not for sale, but the offer complicated Altman's restructuring plan by suggesting a lower bar for how much the nonprofit should be valued.
OpenAI, Inc. was originally designed as a nonprofit in order to ensure that AGI "benefits all of humanity" rather than "the private gain of any person". In 2019, it created OpenAI Global, LLC, a capped-profit subsidiary controlled by the nonprofit. In December 2024, OpenAI proposed a restructuring plan to convert the capped-profit into a Delaware-based public benefit corporation, and to release it from the control of the nonprofit. The nonprofit would sell its control and other assets, getting equity in return, and would use it to fund and pursue separate charitable projects, including in science and education. OpenAI's leadership described the change as necessary to secure additional investments, and claimed that the nonprofit's founding mission to ensure AGI "benefits all of humanity" would be better fulfilled.
The plan has been criticized by former employees. A legal letter named "Not For Private Gain" asked the attorneys general of California and Delaware to intervene, stating that the restructuring is illegal and would remove governance safeguards from the nonprofit and the attorneys general. The letter argues that OpenAI's complex structure was deliberately designed to remain accountable to its mission, without the conflicting pressure of maximizing profits. It contends that the nonprofit is best positioned to advance its mission of ensuring AGI benefits all of humanity by continuing to control OpenAI Global, LLC, whatever the amount of equity that it could get in exchange. PBCs can choose how they balance their mission with profit-making. Controlling shareholders have a large influence on how closely a PBC sticks to its mission.