OpenAI constructed a $180 billion charity. Will it do any good?

When Sam Altman first instructed her that he’d by no means let OpenAI go company, that what he and his colleagues had been constructing was too highly effective to be pushed by buyers, Catherine Bracy roughly believed him.

The dialog passed off in 2022, when Bracy, CEO and founding father of the social mobility-focused nonprofit TechEquity, was interviewing Altman for a e-book she was writing concerning the risks of enterprise capital. It was earlier than Altman’s mysterious firing and unfiring a yr later, after which he principally stopped responding to Bracy’s texts.

And ever since then, OpenAI — which was initially based as a nonprofit in 2015 to “advance digital intelligence in the best way that’s almost certainly to profit humanity as a complete, unconstrained by a must generate monetary return” — has been publicly attempting to flee the confines of its charitable roots. In the present day, OpenAI comprises each a company arm targeted on constructing and promoting AI and a nonprofit arm with a said mission of making certain that AI advantages individuals.

Through the controversial technique of attempting to completely sever the 2 in 2024, OpenAI misplaced about half of its AI security staffers and far of its senior management. That was adopted by an intensified scrutiny from state attorneys common, nonprofit authorized specialists, competitor corporations, efficient altruists, Nobel Prize winners, huge swaths of California’s philanthropic group, and certainly one of its authentic funders, Elon Musk. Completely different sides had completely different pursuits, however the general argument was that shifting to a for-profit mannequin would create a fiduciary obligation to buyers that may inherently conflict with its authentic mission of security and public profit.

Nonetheless, OpenAI did lastly strike a contortive restructuring deal final October. Primarily, the for-profit arm turned what is called a public profit company (PBC), referred to as the OpenAI Group. The unique nonprofit turned the OpenAI Basis, which has a 26 % stake at present price $180 billion within the PBC, plus a sliver of unique authorized management over sure main choices.

One impact of the transition was that it basically required OpenAI to place a quantity on what it owed the general public for changing what had been a challenge for all humanity into one thing that the majority immediately advantages the corporate’s buyers. The ensuing stake of the OpenAI Basis is large enough to immediately make it one of many wealthiest charities within the nation, or in OpenAI’s phrases, the “best-equipped nonprofit the world has ever seen.” On paper, at the very least, the inspiration is now considerably richer than the complete nation of Luxembourg. Even the Gates Basis has solely $77.6 billion in belongings, lower than half of what the OpenAI Basis can draw from, although it’s essential to notice that many of the wealth of the OpenAI Basis is locked in pretty illiquid shares inside the nonetheless personal firm, which limits how rapidly any cash may be given away.

Nonetheless, its sheer dimension signifies that the OpenAI Basis stands to ultimately be a transformative presence on the philanthropic stage, a technique or one other. However whereas OpenAI says the inspiration will ultimately give out many billions of {dollars} in philanthropy to make sure that “synthetic common intelligence advantages all of humanity,” it’s unsure {that a} socially useful philanthropy can exist aspect by aspect with an organization that’s preventing an existential battle over who will dominate the AI trade.

“The unstated fact right here is that they’re by no means going to decide that’s unhealthy for the corporate,” Bracy mentioned. “These two entities can not stay beneath the identical roof” the place “the mission is in management.” (Disclosure: Vox Media is certainly one of a number of publishers which have signed partnership agreements with OpenAI. Our reporting stays editorially unbiased.)

The muse’s first presents got here within the type of $40.5 million in no-strings-attached grants to over 200 group nonprofits, like church buildings, meals banks, and afterschool applications. Notably, most grantees had little to no connection to AI or know-how — and simply as notably, a number of of those early grantees simply so occur to be members of EyesOnOpenAI, a coalition of California nonprofits vital of OpenAI’s privatization that shaped in 2025.

However there are indicators the inspiration will quickly pivot into grantmaking that’s extra clearly related to the corporate’s authentic constitution, which aimed to make sure that the advantages of AI are broadly distributed whereas additionally prioritizing long-term security within the know-how’s improvement. On Feb. 19, OpenAI — the corporate, not the inspiration — introduced a $7.5 million grant along with Microsoft, Anthropic, Amazon, and different main tech corporations for a brand new, worldwide challenge geared toward researching how you can make AI methods safer.

The actual questions across the OpenAI Basis have much less to do with how a lot it’s giving and to whom than whether or not it’s truly in a position to perform its contractual oversight function. In principle, the inspiration ought to be making certain that OpenAI is the standard-bearer for moral decision-making on the frontier of AI improvement. That may be a novel contribution to the sphere — and an embodiment of OpenAI’s authentic mission — that no quantity of grantmaking may change. But, a sequence of troubling latest choices by the corporate hardly appears to bear out that imaginative and prescient.

OpenAI has begun its new company journey by debuting adverts on its free tier service, firing an government who raised security considerations a few soon-to-come NSFW mode for ChatGPT on fees of sexual discrimination in opposition to a male colleague, and burning money whereas its president funnels tens of millions of {dollars} into Donald Trump’s tremendous PAC. OpenAI President Greg Brockman has additionally teamed up with the personal fairness agency Andreessen Horowitz and Palantir’s co-founders to fund a $125 million tremendous PAC geared toward selling AI-friendly insurance policies. Together with Google, xAI, and Anthropic, OpenAI has additionally come beneath scrutiny in latest weeks for its protection contracts with the Pentagon.

When OpenAI succeeded in its marketing campaign to cede its foundational new know-how from nonprofit management, it opened the door for a lot of of those choices. Even $180 billion in charity won’t be sufficient to make up for the distinction.

How OpenAI shed its nonprofit pores and skin

Company charity is ubiquitous within the tech world, particularly among the many largest gamers. Microsoft plans to donate $4 billion in money and AI cloud know-how to varsities and nonprofits by 2030. Google offers away some $100 million yearly, usually to organizations targeted on synthetic intelligence and know-how.

However from the start, OpenAI was completely different. Slightly than being profitable and giving a few of it to charity, OpenAI was the charity. It was based as a nonprofit analysis lab with about $1 billion in start-up donations, principally from tech titans like Altman, Brockman, and Elon Musk.

There are some structural benefits to being a charity. You may’t settle for investments, however you’ll be able to settle for donations and also you don’t should pay most taxes. What’s extra, in these early days, OpenAI’s said mission — to construct protected AI with out the pressures of economic incentive — gave it a serious enhance when it got here to recruitment for rarified expertise. Machine studying prodigy Ilya Sutskever instructed Wired in 2016 that he selected to go away Google to develop into OpenAI’s chief scientist “to a really massive extent, due to its mission.”

However there have been limits to being a completely nonprofit entity. In pursuit of financing amid the rising computing prices of cutting-edge AI, OpenAI created its capped-profit subsidiary in 2019 to handle a brand new $1 billion funding from Microsoft. Three years later, ChatGPT took the world by storm. Sutskever, and different members of OpenAI’s board, tried and finally didn’t oust Altman amid accusations of dishonesty in 2023. (Altman denied these accusations.) In 2024 — one yr after Sutskever and different members of OpenAI’s board tried and finally didn’t oust Altman amid accusations of dishonesty — the group introduced its intention to go totally company and splinter off the nonprofit into its personal totally unbiased entity.

The transition to for-profit “simply didn’t odor proper,” mentioned Orson Aguilar, head of LatinoProsperity, an financial justice nonprofit and Bracy’s co-leader at EyesOnOpenAI. He wasn’t alone: By early 2025, a dozen former OpenAI workers filed an amicus transient geared toward stopping the conversion as a result of it could “essentially violate its mission.” And greater than 60 nonprofit, philanthropy, and labor leaders, lots of them primarily based in OpenAI’s house state of California, agreed that the try to privatize felt unfair given the extent to which the corporate benefited from its tax-free standing throughout its early improvement.

However California historical past did present some hope that the general public would possibly at the very least get some significant profit from the transition. Again within the Nineteen Nineties, California’s department of the well being insurer Blue Cross Blue Protect — then a nonprofit referred to as Blue Cross of California — determined to denationalise. After some haggling with state regulators, the corporate agreed to forfeit all of its belongings, price $3.2 billion, to a pair of unbiased nonprofits in change for going personal. The end result was the California Endowment, which is now the state’s largest well being basis.

Many nonprofit leaders in California hoped that OpenAI, which is headquartered within the state, would strike an analogous deal, ceding a majority of its belongings to a completely unbiased nonprofit. And people belongings had been and are huge.

Gary Mendoza, a former state official who oversaw the Blue Cross deal, estimated the OpenAI nonprofit’s rightful belongings at over $250 billion, or half the corporate’s $500 billion price. “Something in need of 50 %,” he instructed the San Francisco Examiner final yr, “is a missed alternative.” And past cash for the general public, assuming the nonprofit saved its shares, it could add as much as sufficient affect to actually form OpenAI’s company decision-making at a key second for the way forward for synthetic intelligence.

Provided that the OpenAI Basis ended up with little greater than 1 / 4 of the ultimate firm, that is clearly not what occurred. However EyesOnOpenAI’s years-long lobbying effort was not a complete bust. The criticism proved highly effective sufficient that final Might, OpenAI was pressured to surrender on an preliminary plan to restructure away its nonprofit belongings into a brand new group wholly disconnected from OpenAI, which might have left the nonprofit with no authorized management over the for-profit arm.

On paper, the brand new deal consists of some significant concessions. It contractually requires the nonprofit mission to come back first on security and safety points, with no regard to shareholder pursuits. The memorandum additionally calls on OpenAI to “mitigate dangers to teenagers” particularly. It made the inspiration the controlling shareholder of the company, affording it the correct to nominate company administrators and oversee vital choices like a sale.

If OpenAI abided by all of its phrases and ultimately began giving freely billions of {dollars} of philanthropy every year, then the world — or at the very least California, the place lots of OpenAI’s grants have been concentrated — may stand to vastly profit from it.

Random acts of company kindness

And this brings us to the $40.5 million that OpenAI gave to over 200 nonprofits towards the tip of final yr.

Many of those charities utilized to the grant with subtle concepts round how you can assist their communities combine or adapt to AI, although they’ll finally use the grants nonetheless they see match. Amongst them had been public libraries, Boys and Ladies Golf equipment, church buildings, meals banks, and authorized help nonprofits. Coming at a second when nearly all of the nation’s nonprofits face existential funding cuts, “it was simply the right timing,” mentioned Thomas Howard Jr, head of Kidznotes, a North Carolina nonprofit targeted on music schooling that acquired $45,000 in OpenAI’s first spherical of grants.

So civil society’s battle over the OpenAI transition gained at the very least sufficient concessions to assist these worthy organizations and retain some semblance of nonprofit management over among the for-profit’s actions. So why accomplish that many individuals within the philanthropic group stay so unfavourable concerning the basis?

“I’m all for nonprofits getting cash,” mentioned Bracy, the top of TechEquity. “I don’t begrudge any organizations that took the cash, however I don’t assume it’s some indication that OpenAI resides as much as the mission of the nonprofit.”

$40.5 million, in fact, is just 0.02 % of the OpenAI Basis’s on-paper $180 billion windfall. How the inspiration will ultimately spend the opposite 99.98 % stays to be seen, although the inspiration has mentioned that at the very least $25 billion will finally go to scientific analysis and what it’s calling “technical options for AI resilience.” The corporate plans to announce a second wave of grants directed at organizations utilizing AI to work throughout points like well being within the coming months.

“We’re doing the essential work of participating with specialists, studying from communities, and shaping a viewpoint of the place Basis investments could make the best distinction,” the OpenAI Basis’s board of administrators mentioned in response to a request for readability on the place future funding will go. “We sit up for sharing extra quickly.”

However to this point, critics stay skeptical. OpenAI has executed little to show that its newfound philanthropy is extra than simply “a smoke and mirrors present,” argued one member of the Coalition for AI Nonprofit Integrity (CANI) — a coalition composed largely of AI insiders, together with former OpenAI workers, furiously against the restructuring. He spoke on the situation of anonymity as a result of he feared retaliation from OpenAI, which has accused CANI of being a entrance funded by Musk. (CANI has denied receiving any such funds — although not for lack of attempting. In the event you scroll to the underside of OpenTheft, a web site created by CANI, you’ll discover a direct plea to Musk for donations.)

Whereas a spokesperson for OpenAI mentioned that the inspiration is within the technique of constructing a devoted staff, and has sought the enter of each nonprofit leaders and specialists in how society can adapt to AI, the corporate has but to make any main staffing bulletins for its grantmaking arm. For now, apart from Zico Kolter, the top of the nonprofit’s security committee, the inspiration board nonetheless shares the identical members as the company board, together with CEO Sam Altman. The concept is that these board members can placed on completely different hats when assembly about nonprofit versus company priorities, asserting the inspiration’s oversight when wanted. However it has created the looks of a battle of curiosity.

When requested for mechanisms and examples for the way the inspiration has responded to conditions the place its mission conflicts with shareholder pursuits, given the overlapping board membership, the spokesperson mentioned that OpenAI has conflict-of-interest insurance policies and governance procedures in place to make sure its administrators solely think about the mission once they meet, as they repeatedly do, about nonprofit points.

The corporate additionally mentioned the inspiration board always workouts its oversight function, together with for all new main product releases, like the discharge of GPT‑5.3‑Codex, a sophisticated agentic coding mannequin, final month. The AI watchdog group the Midas Mission, a frequent thorn in OpenAI’s aspect, accused the corporate of violating security requirements, an allegation that OpenAI fervently denied.

In any case, for the reason that OpenAI Basis shouldn’t be a separate entity with its personal unbiased board, some critics have in contrast it to different feel-good company social duty ventures, just like the McDonald’s Ronald McDonald Home, Walmart’s wholesome meals program, and House Depot’s work with veterans.

Company social duty has its place, and it could do actual good. However Bracy believes that primarily based on the OpenAI Basis’s structuring and the way they’ve carried out their grantmaking to this point, it should in all probability by no means fund something “they see as a risk to the expansion of the corporate,” mentioned Bracy, although the necessity for guardrails on unrestricted AI improvement featured prominently within the firm’s authentic mission. “They’re going to do what’s greatest for the underside line of the for-profit.”

Critics like Bracy additionally doubt the OpenAI Basis’s different major prerogative, which is to control all security and ethics-related points for the broader group, together with the duty to overview new merchandise.

Whereas the nonprofit and its mission do legally retain management over the OpenAI company — notably with regards to issues of safety — which will add as much as little, on condition that the OpenAI Basis doesn’t appear to be an independently ruled basis. It’s not, in truth, even technically a basis, however a public charity, which implies it isn’t required to pay out a sure proportion of its belongings every year beneath IRS necessities.

And whereas the nonprofit retains important oversight powers on paper — together with the authority to halt AI releases it deems unsafe — in follow, critics say, it’s unclear whether or not it could ever use them.

More and more, OpenAI has additionally been wading into political lobbying efforts that appear at odds with its mission to advertise long-term security in AI improvement. When California lawmakers had been debating SB 53, a legislation requiring transparency experiences from main AI corporations, OpenAI lobbied in opposition to it. And the corporate has come beneath intense scrutiny in latest weeks for its contract with the Pentagon, which has blacklisted its rival firm Anthropic for elevating moral considerations about the usage of its know-how.

Why the battle shouldn’t be over

OpenAI’s new company association could be very, very new. It’s nonetheless potential that OpenAI’s grantmaking arm actually does employees up, and the nonprofit builds an unbiased board that has the ability to implement onerous moral choices for the corporate, even when it hurts buyers’ returns.

“They’ve loads of freedom to proceed to do good,” mentioned Tyler Johnston, government director of the Midas Mission, however that may require them to “truly shake issues up” and “present that they’ve created the scaffolding that can allow them to actualize their mission.”

However to this point, “there’s nothing I’ve seen that provides me reassurance that they’ll catch the essential issues of safety once they come up,” he mentioned. “Or that they’ll be doing a radical investigation of the grantmaking alternatives.”

If OpenAI doesn’t abide by the phrases of its new contract — if the corporate, for instance, tries to thwart an try to roll again a harmful new instrument — then California’s legal professional common does have the ability to demand solutions from the corporate, and in principle, revisit the settlement’s phrases.

Past the settlement, there are just a few fairly public means by which OpenAI’s former lovers, skeptics, and nemeses are nonetheless attempting to press rewind on the restructuring.

Chief amongst them is Elon Musk, OpenAI’s most distinguished authentic donor and co-founder. In between buying and selling embarrassing jabs with Altman on X, Musk took OpenAI to courtroom final yr over claims that he was “assiduously manipulated” into donating tens of tens of millions of {dollars} to a nonprofit analysis lab that become an “opaque internet of for-profit OpenAI associates.”

A choose has discovered sufficient trigger for the case to proceed to trial this April. Musk is suing for as much as $134 billion in damages, although OpenAI has instructed its buyers that it believes it could solely be on the hook for Musk’s $38 billion in authentic donations. OpenAI, for its half, has accused Musk of an “illegal marketing campaign of harassment.”

In the meantime, CANI remains to be holding out hope that it could persuade the individuals of California to vote for a hyperspecific poll measure, the California Charitable Property Safety Act, which may reverse the choice to permit OpenAI — or every other “organizations creating transformative applied sciences” — to go company.

“They’re chopping corners on security due to the race to synthetic common intelligence that they simply need to win,” mentioned the member of CANI. “As a substitute of a automobile to serve humanity, it’s develop into a automobile to serve one particular person and some of his pals and buyers.”

So perhaps the battle over OpenAI’s restructuring isn’t fully over — however it’s in all probability on its final legs. And in the event that they proceed on the identical path, it’s unlikely that the general public will ever actually profit in the best way they should, given the charitable advantages OpenAI loved in its early days. On the very least, $40.5 million is simply not going to chop it. Even $180 billion would possibly fall far quick.

“I feel it’s them saying, ‘Hear, I dare you to implement this,’” mentioned Bracy, who believes OpenAI is “banking on the truth that they’re price virtually a trillion {dollars}, and so they have limitless assets — and the state of California doesn’t.”