The $100 Billion Gamble

Source: Dev.to

Introduction

In a glass‑walled conference room overlooking San Francisco’s Mission Bay, Bret Taylor sits at the epicentre of what might be the most consequential corporate restructuring in technology history. As OpenAI’s board chairman, the former Salesforce co‑CEO is orchestrating a delicate ballet between idealism and capitalism, between the organisation’s founding mission to benefit humanity and its insatiable hunger for the billions needed to build artificial general intelligence. The numbers are staggering: a $500 billion valuation, a $100 billion stake for the nonprofit parent, and a projected reduction in partner revenue‑sharing from 20 % to 8 % by 2030. But behind these figures lies a more fundamental question that will shape the trajectory of AI development for years to come—who really controls the future of AI?

Overview

As autumn 2025 unfolds, OpenAI’s restructuring has become a litmus test for how humanity will govern its most powerful technologies. The company that unleashed ChatGPT upon the world is transforming from a peculiar nonprofit‑controlled entity into a public‑benefit corporation (PBC) still governed by its nonprofit parent, armed with one of the largest philanthropic war chests in history. This structure attempts to thread an impossible needle: maintaining ethical governance whilst competing in an arms race that demands hundreds of billions in capital.

The stakes couldn’t be higher. As AI systems approach human‑level capabilities across multiple domains, decisions made in OpenAI’s boardroom ripple outward, affecting everything from model access to safety standards and the concentration of power in Silicon Valley’s tech giants.

OpenAI’s Evolution and the Capped‑Profit Model

Founded in 2015 with a billion‑dollar pledge and promises to democratise artificial intelligence, OpenAI quickly discovered that noble intentions collided with economic reality. Training state‑of‑the‑art models requires not only brilliant minds but also computational resources that would make even tech giants blanch.

• 2019 – “Capped‑profit” subsidiary – The first compromise introduced a Frankenstein structure that married nonprofit governance with for‑profit incentives. Investors could earn returns, but those returns were capped at 100 × their investment. Microsoft’s initial investment that year, followed by billions more, fundamentally altered OpenAI’s trajectory.
• 2024 – Straitjacketed model – By 2024, the capped‑profit model had become restrictive. Sam Altman, OpenAI’s CEO, told employees in September that the company had “effectively outgrown” its convoluted structure. The nonprofit board retained ultimate control, but the for‑profit subsidiary needed to raise hundreds of billions—eventually trillions, according to Altman—to achieve its ambitious goals.

The 2025 Restructuring Plan

Early Proposals (Late 2024 – Early 2025)

The initial plan would have severed the nonprofit’s control entirely, converting OpenAI into a traditional for‑profit entity with the nonprofit receiving a minority stake. The proposal triggered a firestorm:

• Elon Musk filed multiple lawsuits alleging betrayal of the founding mission.
• Meta petitioned California’s attorney general to block the move.
• Former employees warned of power concentration and abandonment of safety commitments.

Reversal and Final Structure (May 2025 – September 2025)

After “hearing from civic leaders” and discussions with the attorneys general of California and Delaware, OpenAI announced a dramatically different plan:

1. Nonprofit retains control – The nonprofit board remains the overall governing body for all OpenAI activities.
2. For‑profit arm becomes a public‑benefit corporation – A PBC legally requires balancing shareholder returns with public benefit.
3. Equity stake – The nonprofit receives a $100 billion equity stake, roughly 20 % of the current $500 billion valuation, described as a “floor that could increase.”
4. Board composition – Both the nonprofit and the PBC will initially share identical membership; the nonprofit will appoint directors to the PBC board.
5. Microsoft relationship – A non‑binding memorandum of understanding shifts Microsoft’s exclusive access to a “right of first refusal” model and reduces its revenue share from 20 % to a projected 8 % by 2030.

Governance and the Nonprofit Board: Philosophical Guardians

The nonprofit board emerges with remarkable staying power. With a $100 billion stake providing financial independence, the nonprofit can pursue its mission without being beholden to donors or commercial pressures. However, questions remain:

• Composition – The board includes Bret Taylor (chair), Sam Altman (CEO), and a mix of technologists, academics, and business leaders. Critics argue it lacks sufficient AI‑safety expertise and diverse perspectives.
• Track record – The chaotic November 2023 attempt to fire Altman, which nearly destroyed the company, raises concerns about the board’s ability to navigate complex governance challenges.

Sam Altman: The Architect

Altman’s position appears strengthened by the restructuring. He successfully navigated pressure from multiple directions—investors demanding returns, employees seeking liquidity, regulators scrutinising the nonprofit structure, and critics alleging mission drift. The PBC framework gives him more flexibility to raise capital while maintaining a veneer of mission‑driven governance.

Relationship with Microsoft

Microsoft, the largest investor and cloud‑computing partner, sees its exclusive access to OpenAI’s models shift to a “right of first refusal” arrangement. The revenue‑sharing reduction—from 20 % to an estimated 8 % by 2030—represents tens of billions in additional revenue that OpenAI will retain. For Microsoft, which has invested over $13 billion, this concession reflects a shifting power dynamic: Open