OpenAI executives are considering a relocation from California due to growing political resistance that threatens the company’s planned conversion from nonprofit to for-profit status. According to reports, the company states it has no current plans to leave.
California’s attorney general has opened an investigation into whether OpenAI’s restructuring violates state charitable trust laws. A coalition of nonprofits, labor groups, philanthropies, and rival company Meta are also opposing the conversion.
This restructuring is critical for OpenAI, as it has approximately $19 billion in funding contingent on the change. If the conversion does not proceed, investors could withdraw their support, which would be catastrophic for the maker of ChatGPT.
A move out of California would be surprising given CEO Sam Altman’s deep connections to the Bay Area. Altman served on San Francisco Mayor Daniel Lurie’s transition team and reportedly owns multiple homes in San Francisco and Napa Valley. Relocating would also present significant logistical hurdles, as OpenAI’s AI researchers are heavily concentrated in San Francisco.
The company continues to work with state and Delaware attorneys general on the restructuring process. This regulatory pressure compounds OpenAI’s existing challenges, which include competing in an increasingly intense war for AI talent.