Few companies have shaped the public’s experience of AI as much as OpenAI. Its release of ChatGPT in November 2022 turned generative AI from a research topic into a mass-market product, and set off a race among technology companies. Its history is also unusual: a nonprofit research lab that became one of the most valuable private companies in the world.

Founding (2015)

OpenAI was announced in December 2015 as a nonprofit artificial intelligence research organization. Its founders and early backers included Sam Altman, Greg Brockman, Ilya Sutskever, Elon Musk and others. The stated mission was to ensure that artificial general intelligence benefits all of humanity. Early work spanned reinforcement learning, robotics and open-source tools such as OpenAI Gym.

Elon Musk left the board in 2018; he later sued OpenAI and its leaders, alleging they had abandoned the original nonprofit mission — claims OpenAI disputes.

The capped-profit shift and Microsoft (2019)

Training frontier models requires enormous computing resources. In 2019, OpenAI created a “capped-profit” company controlled by the nonprofit, allowing it to raise investment with limits on investor returns. Microsoft invested $1 billion that year, followed by much larger investments, and became OpenAI’s main cloud provider — a partnership that has been central to both companies.

The GPT series

  • GPT (2018) showed the value of generative pre-training of Transformers on large text corpora.
  • GPT-2 (2019) was initially released in stages because of concerns about misuse.
  • GPT-3 (2020), with 175 billion parameters, demonstrated few-shot learning from prompts and was offered through an API.
  • Codex (2021) powered GitHub Copilot.
  • GPT-4 (2023) added image input and set new benchmarks.
  • Later models added native multimodality, real-time voice and “reasoning” models trained to think step by step before answering.

ChatGPT (2022)

Released on November 30, 2022, as a “research preview”, ChatGPT reached an estimated 100 million users within about two months, making it one of the fastest-growing consumer applications in history. It led to paid subscriptions, enterprise offerings, a developer platform and a broad ecosystem of products built on OpenAI models.

Other products

OpenAI has also developed DALL·E image models, the Whisper speech recognition model (released as open source), the Sora video model, coding agents and AI agents that browse and operate computers.

The 2023 board crisis

In November 2023, OpenAI’s nonprofit board removed CEO Sam Altman, saying he had not been “consistently candid” with the board. Within days, most employees threatened to resign and Microsoft offered to hire Altman. He was reinstated as CEO after about five days, with a new board. The episode exposed tensions between OpenAI’s safety-focused governance and its commercial growth.

Restructuring

OpenAI subsequently pursued changes to its structure to raise capital more easily. After discussions with state attorneys general and criticism from former employees and others, it announced that the nonprofit would retain control. In 2025, it completed a recapitalization under which its for-profit arm became a public benefit corporation controlled by the nonprofit, now called the OpenAI Foundation.

Criticisms and debates

  • Openness: critics note that OpenAI no longer publishes many technical details of its leading models.
  • Safety: departures of safety researchers have raised questions about priorities.
  • Copyright: news organizations and authors have sued over training data.
  • Concentration of power: the scale of capital and computing involved concentrates AI capabilities in few organizations.

What to watch next

  • The outcome of lawsuits over training data and OpenAI’s founding mission.
  • Evolution of the Microsoft–OpenAI partnership.
  • New model releases and agent products.
  • Investment in computing infrastructure and data centers.

Key takeaways

  • OpenAI was founded in December 2015 as a nonprofit with a mission focused on AGI benefiting humanity.
  • A capped-profit structure in 2019 enabled large investments, including from Microsoft.
  • ChatGPT, launched November 30, 2022, triggered the generative AI boom.
  • In November 2023, Sam Altman was removed as CEO and reinstated within days.
  • OpenAI later restructured, with its for-profit arm becoming a public benefit corporation controlled by the nonprofit.

Frequently asked questions

Is OpenAI a nonprofit?

It is controlled by a nonprofit foundation, while its operating business is a for-profit public benefit corporation that can raise investment.

Does Microsoft own OpenAI?

No. Microsoft is a major investor and partner with a significant stake, but it does not own or control OpenAI.

Who founded OpenAI?

Founders included Sam Altman, Greg Brockman, Ilya Sutskever, Elon Musk and other researchers and investors.