OpenAI is shaking up its governance, deciding to keep its nonprofit parent firmly in the driver's seat even as it morphs into a public benefit corporation—a choice made after some pointed feedback from Delaware and California's attorneys general and a chorus of industry critics.

The nonprofit entity that Sam Altman, Elon Musk and a handful of others set up in 2015 will stay in control of the new for-profit LLC, making sure OpenAI's original mission stays front and center.

Microsoft (MSFT, Financial) already dropped a “multi-billion” investment on the table in early 2023, but high-profile figures like Musk and Meta Platforms (META, Financial) had raised alarms about mission drift. By turning the nonprofit into a major shareholder of the public benefit corp, OpenAI locks in that oversight—and with it, the promise to “ensure artificial intelligence benefits all of humanity,” as chair Bret Taylor put it.

Altman himself wrote to stakeholders to underscore that OpenAI “is not a normal company and never will be.” He talked up plans to open-source powerful models and give users plenty of freedom—within broad ethical guardrails—even if they don't all agree on every moral question.

He pointed out that the public benefit structure legally forces them to juggle shareholder returns and that big, altruistic mission. It's a setup he sees as vital to keep innovation humming and public trust intact.

OpenAI didn't spill exact numbers this go-round, but the timing dovetails with its past fundraising rounds and strategic tie-ups. Over the past year, it's fielded about two dozen filings and inquiries, and this “hybrid” model is meant to smooth out future capital raises and partnerships. Some observers even think it could become a playbook for other mission-driven tech outfits wrestling with governance in a fast-changing landscape.

Why it matters: This move gives investors and partners a clearer picture of who's really steering the ship—and helps calm worries about mission creep as OpenAI gears up for bigger funding rounds or a potential public listing. Investors will now be watching for California AG sign-off, likely later this quarter, and seeing how this dual-structure experiment plays out in future deals.