After months of chatter and pushback, the AI darling said its business wing will morph into a public benefit corporation (PBC), still firmly under the thumb of the nonprofit that birthed it.

The “oversight” move was justified in a blog post by OpenAI board chairman Bret Taylor, who said: “OpenAI was founded as a nonprofit, and is today overseen and controlled by that nonprofit. Going forward, it will continue to be overseen and controlled by that nonprofit.”

The decision comes after “constructive dialogue” with the attorneys general of California and Delaware, who were asked to keep an eye on whether the restructuring would see OpenAI abandoning its lofty charitable goals. Apparently the “dialogue” was persuasive enough to kill the planned conversion.

Elon Musk, who co-founded OpenAI and quit because it conflicted with Tesla's own AI work, filed a lawsuit accusing the company of selling out. He wanted the court to stop the shift, claiming the startup had strayed from its mission to benefit humanity. A judge refused to block it for now but is letting the whole circus proceed to a jury trial in 2026.

Other parties piled on. Former staff, nonprofit Encode, and even the California Teamsters union urged Attorney General Rob Bonta to slam the brakes. Meanwhile, professors, Nobel Prize winners, and various civic outfits fired off letters begging regulators to block the restructure.

OpenAI originally pitched the for-profit switch as a necessary evil to raise the mountains of cash it needs to run mega-scale AI projects. It promised that the nonprofit would keep control and rake in billions for its troubles, to be spent on good causes in education, science, and healthcare. Noble spin for what amounted to a corporate land grab.

In a message to staff, CEO Sam Altman said the firm might eventually need “trillions of dollars” to roll out its AI offerings globally. “We are moving to a normal capital structure where everyone has stock,” he wrote, clearly forgetting that normal is the last word most would use to describe OpenAI’s governance gymnastics.

The nonprofit, meanwhile, becomes a big shareholder in the PBC and gets to pretend it's still calling the shots. Microsoft, the startup’s sugar daddy, presumably remains on board, but OpenAI’s clumsy dance around charity and capitalism continues to raise eyebrows.