OpenAI has officially dropped efforts to change the company to a for-profit business, but at the same time has reduced limits on its for-profit subsidiary.

When the company launched in late 2015, it was purely a non-profit that aimed to release open research into AI.

However, as the investment needed to train generative models grew, the company launched a "capped" for-profit subsidiary, with the profit being capped at 100 times any investment. Any value above that would go back to the non-profit.

Under these terms, Microsoft invested billions of of dollars (both in cash and cloud credits) into this subsidiary, which grew to significantly outnumber the non-profit division. Those working on alignment and other non-profit research reportedly struggled to gain access to compute.

When the startup announced the move to cap profits, it said that the cap would be tighter on future investment rounds, and that the move was "to ensure that most of the value (monetary or otherwise) we create if successful benefits everyone."

Following the ChatGPT boom, however, OpenAI began to try to unpick this arrangement. The company instead wanted to restructure into a for-profit entity with a non-profit arm, essentially switching the two divisions.

The non-profit board was also behind the firing of CEO Sam Altman, before he returned and replaced most of the board members.

Elon Musk, who donated to OpenAI's founding and has his own rival generative AI company xAI, has sued to stop the move. Meta and others have also protested any effort to reincorporate the company.

In response, OpenAI chairman Bret Taylor said that it was no longer looking to switch to a for-profit business and that the non-profit company would continue to oversee its commercial subsidiary.

However, the for-profit subsidiary will become a public benefit corporation (PBC) like Anthropic and xAI, and the profit cap will be dropped - essentially what OpenAI had planned to achieve with the initial reorganization.

The non-profit will own a significant, but undecided, stake in the PBC and appoint a board to the commercial business.

"We want to be able to operate and get resources in such a way that we can make our services broadly available to all of humanity, which currently requires hundreds of billions of dollars and may eventually require trillions of dollars," CEO Sam Altman said.

"We believe this is the best way for us to fulfil our mission and to get people to create massive benefits for each other with these new tools."

It is unclear what the move means for OpenAI's current investment efforts. In April, the company announced that it had raised $40 billion in a round that valued it at $300bn; however, backer SoftBank said that it reserved the right to withhold $10bn if the for-profit restructuring did not happen.

DCD has contacted SoftBank for clarity on whether the $10bn is still set to be invested.