🤯OpenAI Scraps Profit Pivot

Today we will discuss:

• OpenAI reverses course on profit shift—Under scrutiny from critics and regulators, OpenAI abandons its for-profit model to restructure as a PBC

• Don’t miss this week’s Workflow Wednesday—AI-powered decision making with Consensus, INK, and OpenAI + Trello + Zapier for smarter choices; now available at only $20/month! 

• Nvidia’s global sales at risk—New restrictions on AI chips limit access to major markets

• In other AI news today—Pinterest upgrades visual search with new AI tools, Microsoft launches lower-cost Surface PCs with built-in AI capabilities, and Google rolls out a preview of its upgraded Gemini 2.5 Pro model ahead of I/O

• Saved the best for last—9 must-try AI tools

OpenAI ditches for-profit plan, will become a public benefit corporation instead

Key Points 

• OpenAI abandons its for-profit shift after regulatory pressure and backlash from Elon Musk and other critics.

• The company will restructure its commercial arm as a public benefit corporation, removing caps on investor returns.

• Despite major changes, Musk’s lawsuit against OpenAI continues.

♨️News - OpenAI has officially backed off from its controversial plan to convert fully into a for-profit entity. 

The decision follows discussions with civic leaders and consultations with the attorneys general of Delaware and California, both of whom oversee the nonprofit’s legal status and had the power to block the restructuring.

🧐What’s the new plan - Rather than going fully for-profit, OpenAI will now reformat its commercial arm into a public benefit corporation (PBC), similar to Anthropic and Musk’s xAI. 

The original structure capped investor returns at 100x, with excess profits flowing back to the nonprofit. Under the new PBC model, that cap is gone; employees and investors will own regular stock with unlimited appreciation potential, making it easier to raise large-scale funding.

The nonprofit board will retain ultimate control, appointing the PBC board and holding a growing equity stake. However, the exact terms of that stake remain undecided.  In a memo to employees, Altman said the old model made sense when there was only one leading AGI effort. Now, with more competition, OpenAI needs “hundreds of billions, maybe trillions of dollars” to serve all of humanity.

🕵️‍♂️What’s more? Despite the restructuring, CEO Sam Altman still has no direct ownership in OpenAI and, according to sources, there is no plan to change that.

Elon Musk, meanwhile, plans to continue with his lawsuit. His lawyer said Monday’s announcement does not change the core issue that OpenAI is still building closed-source AI systems for the benefit of Altman, Microsoft, and investors. He also argued that the nonprofit’s ownership in the new structure is too limited to count as real oversight. Read more here.

Read the full story here. 

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Trump’s policies could limit Nvidia’s global reach and growth potential

Key Points 

• New "AI-diffusion" rules limit Nvidia's sales to key US ally countries, creating openings for competitors.

• Nvidia could lose up to 10% of its revenue from these restrictions, adding to existing losses from China.

👨‍💻Context of the news - Nvidia’s concerns about the Trump administration’s policies stretch well beyond its ongoing issues with China. While the ban on selling AI chips to the Chinese market has already impacted the company’s growth, the introduction of new "AI-diffusion" rules is about to make things even more complicated.

☕News - These new restrictions, set to take effect soon, will limit Nvidia’s ability to sell AI chips to a range of US ally countries, including Israel, India, and Saudi Arabia. This opens up opportunities for competitors, particularly Chinese tech firms like Huawei.

🤔Why it matters - The AI-diffusion rules are designed to stop China from bypassing US export controls by acquiring AI chips through other countries. However, these rules don’t just target China, they affect markets that have historically been key to Nvidia’s sales. 

These changes could cost Nvidia as much as 10% of its revenue, adding to the losses from the China ban. For a company expecting $201 billion in revenue this fiscal year, that’s a potential $28 billion hit.

🫠What it means for Nvidia’s future - While Nvidia remains financially strong and demand for AI chips continues to rise, these restrictions could have a lasting impact on the company’s global reach. Limiting access to important markets could affect Nvidia’s growth and create opportunities for foreign competitors.

There is still hope, though. Nvidia’s CEO has met with President Trump, suggesting that a deal or policy adjustments may be on the table to keep the company’s global market access intact.

Read the full story here.