OpenAI in its recapitalization of its for-profit enterprise

On October 28, 2025, OpenAI announced it has closed its recapitalization, enhancing its corporate structure and providing for robust mission-aligned governance.  OpenAI’s nonprofit, now called the OpenAI Foundation, remains in control of the existing for-profit entity, OpenAI Group PBC, and owns equity in the PBC valued at more than $130 billion, making it one of the best resourced philanthropic organizations ever.  The Foundation also holds a warrant with respect to PBC common stock which, subject to the PBC achieving a valuation milestone in fifteen years, allows the Foundation to realize significant additional value.

OpenAI Group PBC will operate as a Delaware public benefit corporation with the same mission as the OpenAI Foundation.  In addition to the nonprofit’s interest in the PBC, Microsoft holds an investment valued at approximately $135 billion, and the remainder of OpenAI Group is owned by employees and investors.

As part of the recapitalization, OpenAI Foundation holds special voting and governance rights which enable it to appoint all members of the board of directors of OpenAI Group and to replace directors at any time.

The transaction represents the largest recapitalization in corporate history and creates the largest public benefit corporation in corporate history.  The recapitalization was completed after nearly a year of engaging in constructive dialogue with the offices of the Attorneys General of California and Delaware, both of whom announced their support of the transaction after close negotiations with OpenAI.

Wachtell, Lipton, Rosen & Katz served as legal advisor to the Board of Directors of OpenAI Foundation, the controlling stockholder of OpenAI Group PBC.