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OpenAI’s restructuring: the 2024 proposal, the 2025 reversal, and the final PBC

November 7, 2024 Curtis Pyke AI News
A 2024 restructuring proposal develops into the final Foundation-controlled OpenAI organization

Correction and update — July 30, 2026: This article originally described a September 2024 Reuters report as though OpenAI had announced and completed the proposed structure. It had not. Reuters described a plan under discussion, citing unnamed sources. OpenAI changed that plan in May 2025 and completed a different recapitalization in October 2025. The nonprofit, now called the OpenAI Foundation, continues to control the for-profit OpenAI Group PBC.

OpenAI’s final structure differs from the plan reported in 2024. The useful story is how the proposal changed.

September 2024: Reuters reports a plan under discussion

Reuters reported on September 25, 2024 that OpenAI was considering converting its core business into a public benefit corporation that would no longer be controlled by the nonprofit board. The report, based on people familiar with the discussions, also described a minority stake for the nonprofit and possible equity for CEO Sam Altman.

Those details were reported proposals. They were not an OpenAI announcement, and the lawyers and shareholders had not finished the structure.

December 2024: OpenAI outlines a PBC proposal

OpenAI’s December 27, 2024 structure post proposed converting the existing for-profit into a Delaware public benefit corporation with ordinary shares. That version said the PBC would run and control OpenAI’s operations and business, while the nonprofit would hold shares and expand its charitable work.

May 2025: the nonprofit-control plan changes

On May 5, 2025, OpenAI said the nonprofit would remain in control. The for-profit would still become a PBC, but the nonprofit would control it and hold a large equity stake. OpenAI said it changed course after discussions with civic leaders and the attorneys general of California and Delaware.

This update directly superseded the central control claim in the original Kingy article.

October 2025: OpenAI completes the recapitalization

OpenAI announced the completed structure on October 28, 2025:

  • The nonprofit became the OpenAI Foundation.
  • The for-profit became OpenAI Group PBC.
  • The OpenAI Foundation retained control through governance and voting rights.
  • At closing, OpenAI said the Foundation held 26% of OpenAI Group, Microsoft held roughly 27%, and current and former employees and other investors held the remaining 47%.

OpenAI also said the Foundation can appoint and replace OpenAI Group directors. The Foundation and Group retain the same stated mission.

What changed from the 2024 report?

The final structure kept the PBC conversion and conventional equity, but it did not remove nonprofit control. The Foundation’s 26% economic stake should not be confused with its governance rights: OpenAI says the Foundation controls the Group despite holding less than a majority of the equity.

The September 2024 report remains relevant as a record of the proposal being discussed at the time. It should not be used as a description of OpenAI’s current structure.

Sources