Altman’s OpenAI faces scrutiny over for-profit restructuring plan

OpenAI is facing mounting political and legal scrutiny in California over its plan to restructure into a for-profit company, raising concerns about its future, reports the Wall Street Journal.

The state’s attorney general, alongside Delaware’s, is investigating whether the plan violates nonprofit law.

Nonprofits, philanthropies, and labor unions argue the company risks diverting charitable resources for private gain. Regulators could block the plan, sue, or force a settlement.

Investors have tied nearly $19 billion in funding to the restructuring, making the outcome critical for the ChatGPT maker’s survival.

Without it, fundraising and CEO Sam Altman’s expansion plans, including building data centers and custom AI chips, could collapse.

The company has discussed moving out of California if opposition persists, though its workforce is concentrated in San Francisco.

OpenAI insists it will cooperate with regulators and continue working toward balancing its mission of public benefit with investor demands.