SAN FRANCISCO: OpenAI CEO Sam Altman announced Monday that the company behind ChatGPT will continue to be run as a nonprofit, abandoning a contested plan to convert into a for-profit organization.
The structural issue had become a significant point of contention for the artificial intelligence (AI) pioneer, with major investors pushing for the change to better secure their returns.
AI safety advocates had expressed concerns about pursuing substantial profits from such powerful technology without the oversight of a nonprofit board of directors acting in society’s interest rather than for shareholder profits.
“OpenAI is not a normal company and never will be,” Altman wrote in an email to staff posted on the company’s website.
“We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware,” he added.
OpenAI was founded as a nonprofit in 2015 and later created a “capped” for-profit entity allowing limited profit-making to attract investors, with cloud computing giant Microsoft becoming the largest early backer.
This arrangement nearly collapsed in 2023 when the board unexpectedly fired Altman. Staff revolted, leading to Altman’s reinstatement while those responsible for his dismissal departed.
Alarmed by the instability, investors demanded OpenAI transition to a more traditional for-profit structure within two years.
Under its initial reform plan revealed last year, OpenAI would have become an outright for-profit public benefit corporation (PBC), reassuring investors considering the tens of billions of dollars necessary to fulfill the company’s ambitions.
Any status change, however, requires approval from state governments in California and Delaware, where the company is headquartered and registered, respectively.
The plan faced strong criticism from AI safety activists and co-founder Elon Musk, who sued the company he left in 2018, claiming the proposal violated its founding philosophy.
In the revised plan, OpenAI’s money-making arm will now be fully open to generate profits but, crucially, will remain under the nonprofit board’s supervision.
“We believe this sets us up to continue to make rapid, safe progress and to put great AI in the hands of everyone,” Altman said.
OpenAI’s major investors will likely have a say in this proposal, with Japanese investment giant SoftBank having made the change to being a for-profit a condition for their massive $30 billion investment announced on March 31.
In an official document, SoftBank stated its total investment could be reduced to $20 billion if OpenAI does not restructure into a for-profit entity by year-end.
The substantial cash injections are needed to cover OpenAI’s colossal computing requirements to build increasingly energy-intensive and complex AI models.
The company’s original vision did not contemplate “the needs for hundreds of billions of dollars of compute to train models and serve users,” Altman said.
SoftBank’s contribution in March represented the majority of the $40 billion raised in a funding round that valued the ChatGPT maker at $300 billion, marking the largest capital-raising event ever for a startup.
The company, led by Altman, has become one of Silicon Valley’s most successful startups, propelled to prominence in 2022 with the release of ChatGPT, its generative AI chatbot.

SAN FRANCISCO: US President Donald Trump’s plan to turn Alcatraz back into a federal prison was summarily rejected on Monday by some visitors to the tourist site in San Francisco Bay.
Trump revealed a plan over the weekend to rebuild and expand the notorious island prison, a historic landmark known as “The Rock” and operated by the US government’s National Park Service. It’s “just an idea I’ve had,” he said.
“We need law and order in this country. So we’re going to look at it,” he added on Monday.
Once nearly impossible to leave, the island can be difficult to get to because of competition for tickets. Alcatraz prison held fewer than 300 inmates at a time before it was closed in 1963 and draws roughly 1.2 million tourists a year.
US Bureau of Prisons Director William Marshall said on Monday he would vigorously pursue the president’s agenda and was looking at next steps.
“It’s a waste of money,” said visitor Ben Stripe from Santa Ana, California. “After walking around and seeing this place and the condition it’s in, it is just way too expensive to refurbish.” he said.
“It’s not feasible to have somebody still live here,” agreed Cindy Lacomb from Phoenix, Arizona, who imagined replacing all the metal in the cells and rebuilding the crumbling concrete.
The sprawling site is in disrepair, with peeling paint and rusting locks and cell bars. Signs reading “Area closed for your safety” block off access to many parts of the grounds. Chemical toilets sit next to permanent restrooms closed off for repair.
The former home of Al Capone and other notable inmates was known for tough treatment, including pitch-black isolation cells. It was billed as America’s most secure prison given the island location, frigid waters and strong currents.
It was closed because of high operating costs. The island also was claimed by Native American activists in 1969, an act of civil disobedience acknowledged by the National Park Service.
Mike Forbes, visiting from Pittsburgh, said it should remain a part of history. “I’m a former prison guard and rehabilitation is real. Punishment is best left in the past,” Forbes said.
No successful escapes were ever officially recorded from Alcatraz, though five prisoners were listed as “missing and presumed drowned.”
Today a “Supermax” facility located in Florence, Colorado, about 115 miles (185 km) south of Denver, is nicknamed the “Alcatraz of the Rockies.” No one has ever escaped from that 375-inmate facility since it opened in 1994.
Congress in fiscal year 2024 cut the Bureau of Prisons infrastructure budget by 38 percent and prison officials have previously reported a $3 billion maintenance backlog. The Bureau of Prisons last year said it would close aging prisons, as it struggled with funding cuts.