OpenAI began in December 2015 as a nonprofit research lab and since October 28, 2025 has run as OpenAI Group PBC, a public benefit corporation controlled by a nonprofit called the OpenAI Foundation. The Foundation holds equity that OpenAI valued at about USD 130 billion at that date, and Microsoft holds roughly 27 percent on an as-converted diluted basis. Ownership figures move with each funding round, so the dates matter.
Key takeaways
- OpenAI was announced on December 11, 2015 as a nonprofit, with funders committing USD 1 billion in total.
- A capped-profit arm was created in 2019, and the recapitalization completed on October 28, 2025 replaced it with a public benefit corporation.
- The Delaware Attorney General did not object to the plan, on conditions that keep a nonprofit safety committee able to halt model releases.
- A jury ruled against Elon Musk's challenge to the conversion on May 18, 2026, finding it was filed too late, and Musk said he would appeal.
From nonprofit lab to capped-profit company
OpenAI's first announcement, dated December 11, 2015 and signed by Greg Brockman and Ilya Sutskever, described it as a nonprofit artificial intelligence research company with a goal of benefiting humanity as a whole, unconstrained by a need to generate financial return. Sam Altman and Elon Musk were named co-chairs, and a group of funders and companies committed USD 1 billion in total, although the post said only a tiny fraction was expected to be spent in the first years.
On March 11, 2019, OpenAI announced OpenAI LP, a hybrid in which investor and employee returns were capped, with the first round of investors capped at 100 times their investment. The nonprofit's board controlled the new entity, and the company said the mission came first even at the expense of investors' financial stakes. The reason given was the cost of compute: the most capable systems use the most computational power, and the lab decided to scale faster than it had planned.
The product most people associate with the company arrived later. OpenAI introduced ChatGPT on November 30, 2022, describing it as a model trained to interact in a conversational way. That launch brought a consumer product to an organization that had previously been known mainly for research.
The October 2025 recapitalization
On October 28, 2025, OpenAI announced that its recapitalization was complete after nearly a year of discussions with the attorneys general of California and Delaware. The original nonprofit became the OpenAI Foundation and controls the for-profit business, now called OpenAI Group PBC. A public benefit corporation is a for-profit form that must weigh a stated public mission alongside shareholder returns.
OpenAI said the Foundation holds equity in the for-profit valued at approximately USD 130 billion, with additional ownership if the company reaches a valuation milestone. It named an initial USD 25 billion commitment in two areas: health and curing diseases, and technical work on what it calls AI resilience. The joint Microsoft and OpenAI announcement of the same day put Microsoft's stake at approximately USD 135 billion, roughly 27 percent on an as-converted diluted basis, counting all owners including employees, investors, and the Foundation. Before OpenAI's recent funding rounds, Microsoft's stake had been 32.5 percent.
Who controls what
| Date | Structure | Control and return rules |
|---|---|---|
| December 11, 2015 | Nonprofit research lab | No financial-return objective; USD 1 billion committed by funders |
| March 11, 2019 | OpenAI LP under the nonprofit | Nonprofit board in control; first-round investor returns capped at 100 times |
| October 28, 2025 | OpenAI Group PBC under the OpenAI Foundation | Foundation controls the PBC; Foundation holds equity valued at about USD 130 billion |
The Delaware Attorney General, Kathy Jennings, issued a Statement of No Objection on October 28, 2025. Her office said the nonprofit keeps sole power to appoint and remove the PBC's directors, that on safety and security matters those directors must consider only the mission and not shareholders' financial interests, and that the Safety and Security Committee stays at the nonprofit level. That committee can require mitigation measures up to and including halting the release of models. The committee chair, initially Zico Kolter, sits on the nonprofit board with observation rights at PBC meetings, and within one year at least two nonprofit directors, including that chair, must not serve on the PBC board.
The Microsoft agreement
The same day, Microsoft and OpenAI published revised partnership terms. Microsoft's intellectual property rights to OpenAI models and products run through 2032 and now include models after AGI is reached, with safety guardrails. Once OpenAI declares AGI, an independent expert panel must verify the declaration. OpenAI contracted to buy an additional USD 250 billion of Azure services, and Microsoft no longer holds a right of first refusal to be OpenAI's compute provider. These terms are company statements from 2025 and may have been amended since.
Challenges and open questions
Musk, a co-chair at the founding, sued over the conversion. On May 18, 2026, a unanimous jury in federal court in Oakland, California, found that he brought the case too late, and the judge, Yvonne Gonzalez Rogers, agreed with that determination. The verdict turned on timing, not on whether the structure change was proper. Musk said he would appeal, and no outcome of an appeal was confirmed in the sources reviewed.
Several matters were not verified for this profile: any public stock offering, current valuation, and revenue. Reports on those topics rest on unnamed sources and change often, so they are left out. Readers who need current ownership or financial data should consult company announcements or regulatory filings. Nothing here is investment advice.
The primary sources are linked here: the Delaware Attorney General's announcement and OpenAI's own post, Built to benefit everyone.
FAQ
Is OpenAI a nonprofit or a for-profit company?
Both, in layers. The OpenAI Foundation is a nonprofit that controls OpenAI Group PBC, a public benefit corporation. Since October 28, 2025, the operating business is the PBC.
How much of OpenAI does Microsoft own?
Microsoft stated roughly 27 percent on an as-converted diluted basis on October 28, 2025. The figure changes with later funding rounds.
Who can stop an OpenAI model release?
Under the Delaware conditions, the Safety and Security Committee, which sits at the nonprofit level, can require mitigation measures up to and including halting a release.
What happened to the Musk lawsuit?
A jury found on May 18, 2026 that the claims were filed too late. Musk said he would appeal, and the status of any appeal was not confirmed.
Related reading
- OpenAI products used in education
- Alternatives to OpenAI for language tasks
- Research at the OpenAI lab
- Open-source AI and its uses
More in AI Tools and Industry.
Last verified: October 2026
Sources
- Introducing OpenAI, OpenAI, December 11, 2015
- OpenAI LP, OpenAI, March 11, 2019
- Introducing ChatGPT, OpenAI, November 30, 2022
- Built to benefit everyone, OpenAI, October 28, 2025
- The next chapter of the Microsoft-OpenAI partnership, Microsoft and OpenAI, October 28, 2025
- AG Jennings completes review of OpenAI recapitalization, Delaware Department of Justice, October 28, 2025
- Elon Musk loses lawsuit against OpenAI, Al Jazeera, May 18, 2026