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

When Sam Altman first informed 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 kind of believed him.

The dialog came about in 2022, when Bracy, CEO and founding father of the social mobility-focused nonprofit TechEquity, was interviewing Altman for a guide 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 largely 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 definitely to profit humanity as a complete, unconstrained by a have to generate monetary return” — has been publicly attempting to flee the confines of its charitable roots. At this time, OpenAI incorporates each a company arm targeted on constructing and promoting AI and a nonprofit arm with a acknowledged mission of making certain that AI advantages folks.

Throughout the controversial strategy of attempting to absolutely 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 firms, efficient altruists, Nobel Prize winners, huge swaths of California’s philanthropic neighborhood, and one among its authentic funders, Elon Musk. Totally 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 might inherently conflict with its authentic mission of security and public profit.

Nonetheless, OpenAI did lastly strike a contortive restructuring deal final October. Basically, the for-profit arm grew to become what is called a public profit company (PBC), known as the OpenAI Group. The unique nonprofit grew to become the OpenAI Basis, which has a 26 % stake presently value $180 billion within the PBC, plus a sliver of unique authorized management over sure main selections.

One impact of the transition was that it primarily required OpenAI to place a quantity on what it owed the general public for changing what had been a venture for all humanity into one thing that the majority instantly 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, no less than, 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 vital to notice that many of the wealth of the OpenAI Basis is locked in pretty illiquid shares inside the nonetheless non-public firm, which limits how shortly any cash may be given away.

Nonetheless, its sheer measurement signifies that the OpenAI Basis stands to ultimately be a transformative presence on the philanthropic stage, a method 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 facet by facet with an organization that’s combating 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 dangerous for the corporate,” Bracy mentioned. “These two entities can’t dwell underneath the identical roof” the place “the mission is in management.” (Disclosure: Vox Media is one among a number of publishers which have signed partnership agreements with OpenAI. Our reporting stays editorially impartial.)

The muse’s first items got here within the type of $40.5 million in no-strings-attached grants to over 200 neighborhood nonprofits, like church buildings, meals banks, and afterschool applications. Notably, most grantees had little to no connection to AI or expertise — and simply as notably, a number of of those early grantees simply so occur to be members of EyesOnOpenAI, a coalition of California nonprofits important 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 expertise’s improvement. On Feb. 19, OpenAI — the corporate, not the inspiration — introduced a $7.5 million grant at the side of Microsoft, Anthropic, Amazon, and different main tech firms for a new, worldwide venture aimed toward researching find out how to make AI methods safer. And on March 24, the OpenAI Basis debuted a brand new web site, asserting a brand new pledge to offer no less than $1 billion this yr to scientific analysis and different causes, and some new hires, together with Jacob Trefethen, who was beforehand managing director at Coefficient Giving.

Besides, 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 really in a position to perform its contractual oversight function. In concept, the inspiration must be making certain that OpenAI is the standard-bearer for moral decision-making on the frontier of AI improvement. That may be a singular contribution to the sphere — and an embodiment of OpenAI’s authentic mission — that no quantity of grantmaking might exchange. But, a collection of troubling current selections 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 govt who raised security considerations a few soon-to-come NSFW mode for ChatGPT on prices of sexual discrimination in opposition to a male colleague, and burning money whereas its president funnels thousands and thousands of {dollars} into Donald Trump’s tremendous PAC. OpenAI President Greg Brockman has additionally teamed up with the non-public fairness agency Andreessen Horowitz and Palantir’s co-founders to fund a $125 million tremendous PAC aimed toward selling AI-friendly insurance policies. Together with Google, xAI, and Anthropic, OpenAI has additionally come underneath scrutiny in current weeks for its protection contracts with the Pentagon.

When OpenAI succeeded in its marketing campaign to cede its foundational new expertise from nonprofit management, it opened the door for a lot of of those selections. 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 expertise to varsities and nonprofits by 2030. Google provides away some $100 million yearly, usually to organizations targeted on synthetic intelligence and expertise.

However from the start, OpenAI was completely different. Somewhat than earning money 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, largely from tech titans like Altman, Brockman, and Elon Musk.

There are some structural benefits to being a charity. You possibly can’t settle for investments, however you possibly can settle for donations and also you don’t need to pay most taxes. What’s extra, in these early days, OpenAI’s acknowledged mission — to construct protected AI with out the pressures of economic incentive — gave it a significant increase when it got here to recruitment for rarified expertise. Machine studying prodigy Ilya Sutskever informed Wired in 2016 that he selected to go away Google to change 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 failed to 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 did not oust Altman amid accusations of dishonesty — the group introduced its intention to go absolutely company and splinter off the nonprofit into its personal absolutely impartial 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 temporary aimed toward stopping the conversion as a result of it will “basically violate its mission.” And greater than 60 nonprofit, philanthropy, and labor leaders, lots of them primarily based in OpenAI’s dwelling state of California, agreed that the try and 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 may no less than get some significant profit from the transition. Again within the Nineteen Nineties, California’s department of the well being insurer Blue Cross Blue Defend — then a nonprofit known as Blue Cross of California — determined to denationalise. After some haggling with state regulators, the corporate agreed to forfeit all of its belongings, value $3.2 billion, to a pair of impartial nonprofits in alternate for going non-public. The consequence 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 identical deal, ceding a majority of its belongings to a completely impartial nonprofit. And people belongings had been and are monumental.

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 value. “Something wanting 50 %,” he informed the San Francisco Examiner final yr, “is a missed alternative.” And past cash for the general public, assuming the nonprofit stored its shares, it will 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.

On condition 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 new deal contains 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 proper to nominate company administrators and oversee important selections like a sale.

If OpenAI abided by all of its phrases and ultimately began freely giving billions of {dollars} of philanthropy annually, then the world — or no less than California, the place lots of OpenAI’s grants have been concentrated — might stand to tremendously 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 find out how to 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 Women Golf equipment, church buildings, meals banks, and authorized assist nonprofits. Coming at a second when nearly all of the nation’s nonprofits face existential funding cuts, “it was simply the proper timing,” mentioned Thomas Howard Jr, head of Kidznotes, a North Carolina nonprofit targeted on music training that obtained $45,000 in OpenAI’s first spherical of grants.

So civil society’s battle over the OpenAI transition received no less than 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 neighborhood stay so damaging 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 suppose it’s some indication that OpenAI resides as much as the mission of the nonprofit.”

$40.5 million, in fact, is simply 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 no less than $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, and says it’s going to give no less than $1 billion to numerous causes by yr’s finish.

“We’re doing the vital work of participating with specialists, studying from communities, and shaping a perspective 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 stay up for sharing extra quickly.”

However to date, critics stay skeptical. OpenAI has completed 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 case you scroll to the underside of OpenTheft, a web site created by CANI, you’ll discover a direct plea to Musk for donations.)

The corporate has but to announce an govt director for its grantmaking arm, although it did reveal a number of senior appointments to the inspiration in March, together with Trefethen and OpenAI co-founder Wojciech Zaremba. For now, aside 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 a 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 contemplate the mission after they meet, as they recurrently 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 complicated agentic coding mannequin, final month. The AI watchdog group the Midas Mission, a frequent thorn in OpenAI’s facet, accused the corporate of violating security requirements, an allegation that OpenAI fervently denied.

In any case, for the reason that OpenAI Basis isn’t a separate entity with its personal impartial 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 actually do actual good. However Bracy believes that primarily based on the OpenAI Basis’s structuring and the way they’ve performed their grantmaking to date, it’s going to most likely by no means fund something “they see as a risk to the expansion of the corporate,” mentioned Bracy, even supposing the necessity for guardrails on unrestricted AI improvement featured prominently within the firm’s authentic mission. “They’re going to do what’s finest for the underside line of the for-profit.”

Critics like Bracy additionally doubt the OpenAI Basis’s different most important 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 — significantly in relation to issues of safety — that will add as much as little, on condition that the OpenAI Basis doesn’t appear to be an independently ruled basis. It isn’t, the truth is, even technically a basis, however a public charity, which implies it isn’t required to pay out a sure proportion of its belongings annually underneath IRS necessities.

And whereas the nonprofit retains vital 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 will 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 regulation requiring transparency studies from main AI firms, OpenAI lobbied in opposition to it. And the corporate has come underneath intense scrutiny in current weeks for its contract with the Pentagon, which has blacklisted its rival firm Anthropic for elevating moral considerations about using its expertise.

Why the battle isn’t over

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

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

However to date, “there’s nothing I’ve seen that offers me reassurance that they’ll catch the vital issues of safety after they come up,” he mentioned. “Or that they’ll be doing an intensive 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 and roll again a harmful new device — then California’s legal professional common does have the ability to demand solutions from the corporate, and in concept, 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 thousands and thousands of {dollars} to a nonprofit analysis lab that became 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 informed its buyers that it believes it will 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 continues to be holding out hope that it could actually persuade the folks of California to vote for a hyperspecific poll measure, the California Charitable Belongings Safety Act, which might reverse the choice to permit OpenAI — or another “organizations creating transformative applied sciences” — to go company.

“They’re chopping corners on security due to the race to synthetic common intelligence that they only wish to win,” mentioned the member of CANI. “As an alternative of a car to serve humanity, it’s change into a car to serve one particular person and some of his buddies and buyers.”

So possibly the battle over OpenAI’s restructuring isn’t utterly over — however it’s most likely 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 may fall far quick.

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

Replace, March 24, 2026, 4 pm ET: This story, first revealed March 18, has been up to date to incorporate new bulletins from OpenAI on giving and new hires.