OpenAI stays nonprofit; Google faces AI threat

Homepage > News > Business > Last Week in AI: OpenAI stays nonprofit; Google faces AI threat OpenAI abandons for-profit shift OpenAI suddenly announced it would abandon its plans to convert into a traditional for-profit company. Instead, it will remain a nonprofit organization governed by its board, with the only structural change to the company being that the for-profit LLC it currently owns will now become a public benefit corporation (PBC), with the nonprofit retaining significant control as a major shareholder. According to the company, the decision came after discussions with civic leaders and conversations with the California and Delaware Attorneys General. OpenAI‘s official line is that remaining a nonprofit, while shifting its for-profit subsidiary into a PBC, will better position it to fulfill its mission and raise the capital needed to build artificial intelligence (AI) systems that serve humanity. “We believe this is the best way for us to fulfill our mission and to get people to create massive benefits for each other with these new tools,” the company stated. However, I think that the message from the company does not tell the whole story. OpenAI has spent years laying the groundwork for a conversion to a for-profit model. It structured itself as a capped-profit entity, introduced a profit-sharing model for investors, and there were rumors it wanted to go public; so, suddenly slashing the plan to become a for-profit company seems strange. If I had to guess, I think the real answer lies with the California Attorney General. Because OpenAI is a nonprofit registered in California, the AG’s office must approve any conversion to a for-profit structure. OpenAI likely got the sense that approval wasn’t coming, which killed their conversion plan. On top of that, the Elon Musk lawsuit may play a small role in the company’s decision to move away from a conversion. Musk is suing OpenAI for allegedly violating its original nonprofit mission, and even though it likely isn’t the main factor in their decision to revert, the lawsuit may have complicated things just enough to ultimately stall out or make the entire transition to a for-profit entity much more difficult. Yes, OpenAI is putting a positive spin on the restructuring, but this doesn’t seem like a move that came from within. However, I wouldn’t doubt OpenAI’s ability to financially engineer and structure a company, and I doubt there will be any material impact from an observer’s point of view on the company’s ability to raise money and operate. OpenAI’s $3 billion WindSurf acquisition The battle over AI-powered coding tools is ramping up. Last week, it was confirmed that OpenAI is acquiring WindSurf, an AI-assisted coding platform, in a $3 billion deal. But OpenAI isn’t alone in wanting to add a Gen AI coding tool to its portfolio. The biggest names in AI and legacy tech giants are all trying to secure generative code tools. Some are building in-house (like Apple (NASDAQ: AAPL), which recently revealed it’s developing its own AI coding assistant). Others are buying their way in, like OpenAI just did—but why? For starters, these tools have a clear commercial upside. While most AI startups still burn more cash than they generate, AI code tools are proving to be real productivity drivers, and their use cases have been validated by tech giants like Microsoft (NASDAQ: MSFT), which recently revealed that AI now writes between 20% and 30% of its total codebase. If companies at Microsoft’s scale are seeing those efficiency gains, imagine the impact these tools could have on mid-sized firms or startups. These tools aren’t just about developing faster—they are just as much about talent optimization, faster iteration, and leaner development as well. There’s also a data advantage. Owning an AI code tool gives companies real-time insight into which programming languages are being used, what types of apps are being built, and where developers are facing problems. This kind of data is gold when training future AI models, especially if you’re trying to outpace competitors. In other words, the AI code war isn’t just about productivity or coding faster. Under the hood, it’s about having better access and control over a crucial data point in the global AI race. Google’s Search threatened by AI search Artificial intelligence is posing a threat to Google’s (NASDAQ: GOOGL) dominance in search. On May 7, Alphabet’s stock dropped nearly 7% when Apple executive Eddy Cue testified that, for the first time, Safari searches, which direct its users to Google Search by default, declined in April because more users are opting for AI-powered search tools instead of relying on Google. He went even further, revealing that Apple is actively exploring AI search alternatives to integrate directly into Safari. This could spell trouble for Google, which made an estimated $175 billion from its search business in 2024 alone. One month of data doesn’t mean it’s time to hit the panic button, but it is a signal that should not be ignored. Most people already use AI models like ChatGPT and Claude as replacement search engines. They’re asking the same questions they’d typically type into Google, but instead of sifting through pages full of backlinks to find the answer to their queries, they’re getting direct, tailored answers from these AI models. Apple’s testimony confirms that AI use is at a point where AI-powered search is eating into Google’s moat. While Google has its own AI tools (like Gemini), its core business is still searching, and any threat to that crucial component of the business could significantly impact the company’s operations as a whole. In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI . Watch: Demonstrating the potential of blockchain’s fusion with AI title=”YouTube video player” frameborder=”0′′ allow=”accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share” referrerpolicy=”strict-origin-when-cross-origin” allowfullscreen=””> Source: https://coingeek.com/last-week-in-ai-openai-stays-nonprofit-google-faces-ai-threat/